The world s largest uranium miner, Kazatomprom, is backing a new uranium fund that aims to invest in the radioactive metal used to power nuclear reactors.
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ANU Energy OEIC Ltd. was established as a fund to hold physical uranium as a long-term investment, with initial purchases financed from the $50 million investment by Kazatomprom, the National Investment Corporation of the National Bank of Kazakhstan and United Arab Emirates-based fund manager Genchi Global Ltd. Kazakhstan s national nuclear company stated in a Monday statement.
The creation of ANU Energy is a project that has been in development since nearly four years as part of Kazatomprom s broader value-focused strategy, chief executive Mazhit Sharipov said in the statement. The fund will operate in an environment of tightening supply, driving positive benefits for its stakeholders. The fund comes just a few months after the Sprott Physical Uranium Trust helped fuel a rally in prices that renewed debate on whether nuclear power can be part of a global push to replace fossil fuels with less polluting energy sources. Kazatomprom s support signals market optimism from a firm that accounted for about 23% of the world's uranium production last year. The fund is launched at Astana International Financial Centre in Kazakhstan.
The fund removes more uranium from the spot market, which could again provide further upward momentum, according to Jonathan Hinze, president of UxC LLC, a leading nuclear fuel market research and analysis firm.
Shares of uranium companies rose Tuesday, led by Cameco Corp. and Energy Fuels Inc. Cameco, based in Saskatoon, Saskatchewan, gained as much as 8.5% in Toronto business trading while Lakewood, Colorado-based Energy Fuels gained 9.1% in New York City.
ANU Energy OEIC expects to raise up to $500 million from private investors in its second stage of development, with proceeds to be used for additional uranium purchases, according to the statement.
The new fund is meant to focus on investors from Central Asia, South Asia and the Middle East, which is a different market than those targeted by Sprott and Yellow Cake Plc.
It remains to be seen how much capital will be beyond the initial $50 million this ANU Fund will be able to raise, but I will be watching further developments very closely as it could add more to already high levels of spot uranium demand from financial community, he said.
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