Cameco Corporation (USA) (CCJ), Denison Mines Corp (USA) (DNN): What Is “Resource Nationalism” and Why Should You Care?

Understand Which Countries Dominate Supply

The second part of the analysis, geographic diversity and security of supply, can be measured by monitoring acts of RN and by understanding which countries supply is coming from. For uranium, 65% of production in 2012 came from Kazakhstan, Namibia, Niger, Malawi, Uzbekistan, Russia and Ukraine. What does that say about security of supply? Nothing good.

Therefore, uranium companies like Cameco Corporation (USA) (NYSE:CCJ), Denison Mines Corp (USA) (NYSEMKT:DNN) and Energy Fuels could be especially strong performers in the next 1-2 years.

Cameco Corporation (USA) (NYSE:CCJ) is a world leader in low-cost uranium production. Its operations provide about 14% of world production. Cameco Corporation (USA) (NYSE:CCJ) is the largest U.S. producer with in-situ recovery operations in Wyoming and Nebraska. The company also has significant operations In Kazakhstan.

Denison Mines Corp (USA) (NYSEMKT:DNN) is an emerging Canadian star. Having sold its U.S. assets to Energy Fuels, Denison Mines Corp (USA) (NYSEMKT:DNN) is the top exploration play in the Athabasca region. The company is frequently mentioned as a takeout target by Rio Tinto plc (ADR) (NYSE:RIO) and Cameco Corporation (USA) (NYSE:CCJ). Denison Mines Corp (USA) (NYSEMKT:DNN) has a range of early and later-stage exploration and development projects.

Energy Fuels is acquiring Strathmore Minerals, making it the single largest U.S.-focused uranium company with 127 million pounds of uranium resources and 3-4 world class development projects. Energy Fuels is already operating, producing a quarter of the roughly 4 million pounds produced in the U.S. The company is 100% owner of the White Mesa Mill, the only conventional operating mill in the country.

Conclusion

Resource Nationalism will never go away, in fact it’s only getting worse. Some natural resource sectors can withstand the detrimental impact of RN. Iron ore is a prime example. However in sectors like uranium, where 65% of global supply is coming from countries most people would never want to visit, keeping up with demand will be difficult. Uranium companies like Cameco Corporation (USA) (NYSE:CCJ), Denison Mines Corp (USA) (NYSEMKT:DNN) and Energy Fuels could be good ways to benefit from rising commodity prices.

The article What Is “Resource Nationalism” and Why Should You Care? originally appeared on Fool.com and is written by Peter Epstein.

Peter Epstein is long Energy Fuels, PPI.TO and PPRTF.PK. The Motley Fool owns shares of Companhia Vale Ads. Peter is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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