Could ASX uranium shares enjoy vastly expanded exploration grounds?

Aussie uranium miners and their shareholders will be watching the developments at the Cop28 climate summit closely.

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Having enjoyed an exceptionally strong run this year, ASX uranium shares are putting in a mixed performance today.

But Australia's leading uranium stocks could be looking at some much larger hunting grounds and potentially much larger future revenues should the existing ban on uranium mining across multiple states be lifted.

What's been happening with ASX uranium shares?

ASX uranium shares have benefited from rocketing uranium prices in 2023, with yellowcake topping US$80 per pound recently, marking 15-year highs.

This comes as a growing number of nations are returning their attention to nuclear energy to provide reliable baseload energy as the world works to lower carbon emissions. That's seen the demand for uranium outpace new supplies, driving up the price.

And it's helped ASX uranium shares return some market-smashing gains this year.

Here's how these five leading miners have performed so far in 2023, despite a steep slide last week:

  • Paladin Energy Ltd (ASX: PDN) shares are up 43%
  • Bannerman Energy Ltd (ASX: BMN) shares are up 60%
  • Deep Yellow Limited (ASX: DYL) shares are up 42%
  • Boss Energy Ltd (ASX: BOE) shares are up 93%
  • Alligator Energy Ltd (ASX: AGE) shares are up 33%

For some context, the All Ordinaries Index (ASX: XAO) is up 4% over this same period.

Could the miners see existing exploration bans removed?

While Australia's Labor Government isn't ready to embrace nuclear power yet, the International Energy Agency (IEA) says that global nuclear capacity will need to double by 2050 to meet the world's carbon reduction goals.

And ASX uranium shares are, in some ways, uniquely positioned to benefit from that rapid growth. According to Geoscience Australia, Australia has the world's largest Economic Demonstrated Resources (EDR) of uranium.

Despite that massive EDR, the miners are somewhat hamstrung by uranium mining bans in place in New South Wales, Victoria, Tasmania and Queensland.

But some lawmakers are pushing to end that ban.

Speaking at the 28th United Nations climate change conference, or Cop28, in Dubai, Opposition climate change and energy spokesman Ted O'Brien said (quoted by The Australian), "Australia has a moral obligation to provide the world its uranium."

According to O'Brien:

Much has been said about the moratorium on nuclear energy in Australia, but it is also a lesser-known fact that the mining and exploration of uranium too is banned in some jurisdictions.

Atop pushing for Australia to potentially tap into nuclear power to meet some of its own emission-free electricity needs, the Opposition is pressuring the Government to look into lifting the uranium mining prohibitions.

"Not only must Australia consider the removal of the nuclear energy ban, but I would also encourage a rethink on the moratorium on the mining and exploration of uranium," O'Brien said.

While the outcome of that proposal remains to be seen, lifting existing exploration and mining bans would no doubt be welcome news for ASX uranium shares.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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