Mining investors have been floundering in a sea of surplus production, but markets for certain ores, namely copper and uranium, are expected to move towards equilibrium, and then into deficit over the next two to three years. For a pure-play option in anticipation of a sustained price recovery for the latter commodity, look no further than Cameco Corp (CA:CCO), the world's largest publicly traded uranium miner.
IC TIP:
Buy
at
1889¢
Tip style
Growth
Risk rating
Medium
Timescale
Medium Term
Bull points
- Competitors squeezed out of market
- Demand rising as capacity grows
- Positive news on Japan's regulatory hurdles
- Institutional inflows
Bear points
- Tax issues with US and Canadian authorities
- Lingering anxieties over nuclear power
Cameco supplies around 16 per cent of global production from several uranium mines located in North America and Kazakhstan, including McArthur River in Saskatchewan, the world's biggest high-grade uranium mine.