The U.S. Environmental Protection Agency (EPA) recently issued draft regulations setting ambitious greenhouse gas emission limits from power plants. If EPAs proposed rule goes into effect, it will accelerate the need for nuclear energy since it is the only carbon-free source that can fill this void. As the demand for uranium increases in the U.S., it must diversify its global supply chains. We do not want to find ourselves in the position we are currently in with the nickel, copper, lithium, and cobalt needed for electric vehicles.
Ten years ago, electric cars were a small fraction of the automobiles manufactured and driven in the U.S., and accessing the materials needed to build them was not a widely discussed concern. Since then, we have seen the White House announce a commitment to having 50% of all new vehicle sales be electric by 2030 and make historic investments to make it a reality.
It is a lofty, exciting goal, but the U.S. will have to rely on its strained relationship with China to achieve these goals. China refines 68% of nickel worldwide, along with 40% of copper, 59% of lithium, and 73% of cobalt. More than half of the worlds cobalt reserves are located in the Democratic Republic of the Congo, where child labor practices are the norm. China owns the majority of these minesand is the eighth-largest producer of uranium in its own right.
If Western countries want to avoid this dire predicament with nuclear energy, they need to start shoring up the uranium supply chain now. Currently, more than 71% of uranium production comes from state-owned or quasi-controlled companies, and Ukraine is a prime example of how shaky dependence on buying from countries like Russia can be. The countrys nuclear reactors ran on Russian uranium and produced 55% of the countrys electricity before the invasion. Ukraine is now sourcing its supply from Kazakhstan, which has a complicated geo-political situation, so this may only be a temporary fix as opposed to a long-term solution or something allied nations targeting net zero and the energy utilities powering them should emulate.
In the United States, 20% of electricity is nuclear-powered, with most of its imported enriched uranium coming from Russia and a majority of its uranium ore from Kazakhstan. This is not a recipe for energy security and independence and cannot easily be changed. For example, U.S. elected officials banned Russian oil and other energy imports in 2022 in response to the Ukraine invasion but did not include uranium. Canadas sanctions with Russia also do not prohibit importing or exporting uranium from Russia.
The first step to achieving energy independence is to move towards buying fuel from companies that only mine uranium in nations with shared values, beginning with Canada. While companies cannot change where uranium is found, they can commit to keeping the resource in nations that are allied for energy security and targeting net zero when it is discovered there. That means selling only to the U.S., Canada, or other like-minded allied countries.
NexGen Energy is committed to being such a company. Our mineral exploration operations will be based exclusively in Canada, the third largest producer of uranium, and other nations that are allied for energy security and targeting net zero. As importantly, we are committed to selling our uranium only to those same allies leading the energy transition to ensure we do not directly or indirectly fund nations that dont demonstrate peaceful respect for other countries.
The governments and utilities that work with us will benefit from our Saskatchewan-based Rook I project, the largest undeveloped deposit in the world, which will deliver enough uranium to power up to 46 million U.S. homes for years to come and save the equivalent emissions of taking 70 million vehicles off the road. As we prepare to bring our high-grade uranium to market, we will institute a checklist of standards for partners and those involved in our supply chain to ensure high levels of security, safety, and labor standards are met.
Not only is this the right thing to do, its also smart business, as it minimizes the geopolitical risks for our customers, end-users, and investors, making us a supplier of choice.
Nuclear power is the lynchpin of the clean energy transition, but the U.S., Canada, and their allies need stable supply chains. For that to happen, more companies must make this type of commitment to meet the needs of their governments and allies. We look forward to partnering with customers and policymakers to make this the industry standard of the future.
Leigh R. Curyer is the founder and Chief Executive Officer of NexGen Energy Ltd. (NXE).
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
