Invest Alpha

Nuclear Fuel

What fuel do nuclear reactors actually need?

🟢 Large conventional reactors (today’s fleet)

Fuel:

  • Uranium dioxide (UO₂) pellets
  • Enriched to ~3–5% U-235

Fuel cycle:

  1. Uranium mining (U₃O₈, “yellowcake”)
  2. Conversion (UF₆)
  3. Enrichment (3–5%)
  4. Fuel fabrication
  5. Reactor use (18–24 month cycles)

👉 This is well-established, commercial, and already supported by markets.

🔵 SMRs & advanced reactors (what’s changing)

Many SMRs (not all) need HALEU:

HALEU = High-Assay Low-Enriched Uranium

  • 5–19.75% U-235
  • Above today’s reactor fuel
  • Below weapons-grade

Why SMRs want HALEU

  • Smaller cores
  • Longer refueling cycles
  • Higher power density
  • Better economics at small scale

⚠️ Critical fact:
The U.S. currently has almost no commercial HALEU supply.

DOE, NRC, and GAO have all flagged this as the #1 bottleneck for SMRs.

2️⃣ Who is involved in mining & enrichment?

⛏️ Uranium mining (upstream)

Cameco

  • Canada-based
  • Largest Western supplier
  • Long-term contracts with utilities
  • Direct exposure to fuel demand

Kazatomprom

  • World’s largest producer
  • Kazakhstan (geopolitical risk)
  • Still supplies Western utilities

Energy Fuels

  • U.S.-based
  • Uranium + rare earth processing
  • Beneficiary of domestic policy push

🧪 Conversion (often overlooked bottleneck)

  • Converts U₃O₈ → UF₆
  • Limited Western capacity
  • Historically Russia-dominated

Cameco / Orano are key here.

⚙️ Enrichment (the real choke point)

Centrus Energy

  • Only U.S. company currently licensed to enrich HALEU
  • DOE-backed
  • Operating pilot HALEU centrifuges in Ohio
  • This is not speculative — it’s live

Urenco

  • UK / Netherlands / Germany
  • Major Western enrichment provider
  • HALEU-capable in future, not yet scaled

Orano

  • French state-backed
  • Fuel services across the cycle
  • U.S. presence via Orano USA

⚠️ Russia (TENEX) still supplies a large share of global enrichment — this is exactly what policy is trying to unwind.

🔥 Fuel fabrication

  • Westinghouse
  • Framatome
  • BWX Technologies (for advanced reactors)

These companies turn enriched uranium into usable fuel assemblies.

3️⃣ So where does money flow first?

Here’s the order of economic impact as nuclear scales:

1️⃣ Uranium price rises (already happening)
2️⃣ Enrichment capacity re-rates (scarcity premium)
3️⃣ Conversion margins improve
4️⃣ Fuel fabrication volumes rise
5️⃣ Reactor vendors benefit last

This is why fuel-cycle stocks often move years before reactors exist.

4️⃣ Is it worth buying the commodity itself?

🟡 Physical uranium (via trusts / ETFs)

Pros

  • Pure exposure
  • No execution risk
  • Strong supply/demand imbalance

Cons

  • No cash flow
  • Policy risk
  • Volatility

Examples:

  • Physical uranium trusts
  • Uranium ETFs (miners + physical)

🟢 Equities (my honest view)

For most investors:

  • Fuel-cycle equities > commodity
  • Because:
    • Contracted pricing
    • Policy support
    • Operating leverage

The sweet spot is often:

Miners + enrichment + fuel services
(not reactor designers)