Commodities are often overlooked in a young investors portfolio. They should not be!

 Investors looking for stability and lucrative returns over the next two years, I would rank these natural resources in the following order, considering supply-demand dynamics, geopolitical risks, energy transition trends, and industrial importance:

Ed Note: 

We are currently invested in companies producing 5 of these commodities.

1. Uranium

• Bullish Case: Nuclear energy is experiencing a renaissance, with increasing global support for clean energy. Supply is constrained, and demand is rising with new reactor projects and small modular reactors (SMRs).
• Key Players: Cameco (CCJ), Kazatomprom, NexGen Energy (NXE).
• Risk: Some policy risks if governments shift focus.

2. Copper

• Bullish Case: Essential for electrification (EVs, power grids, renewables), and long-term supply deficits are expected due to lack of new mines. Prices have remained strong.
• Key Players: Freeport-McMoRan (FCX), Southern Copper (SCCO), BHP.
• Risk: Short-term recession could dampen demand.

3. Oil

• Bullish Case: Despite the energy transition, oil demand remains strong. OPEC+ supply cuts and geopolitical risks (Middle East conflicts, Russia sanctions) keep prices elevated.
• Key Players: ExxonMobil (XOM), Chevron (CVX), Saudi Aramco.
• Risk: Demand destruction if global economic slowdown occurs.

4. Natural Gas

• Bullish Case: Europe's pivot away from Russian gas, LNG export growth (U.S. to Europe/Asia), and continued reliance on gas as a transition fuel.
• Key Players: Cheniere Energy (LNG), EQT Corp (EQT).
• Risk: Overproduction could lower prices, mild winters reduce demand.

5. Lithium

• Bullish Case: EV demand remains strong, but overproduction has led to price volatility. Long-term supply chain constraints could tighten the market again.
• Key Players: Albemarle (ALB), SQM, Lithium Americas (LAC).
• Risk: High volatility, price declines if demand slows.

6. Rare Earths

• Bullish Case: Critical for defense, electronics, and EVs. China dominates supply, but Western nations are ramping up production. Supply chain security remains a priority.
• Key Players: MP Materials (MP), Lynas Rare Earths (LYC).
• Risk: Geopolitical uncertainty; rare earth processing is complex.

7. Nickel

• Bullish Case: Needed for EV batteries and stainless steel. Supply disruptions in Indonesia and Russia could support prices.
• Key Players: Vale (VALE), Norilsk Nickel, BHP.
• Risk: EV battery chemistry shifting away from high-nickel designs.

8. Gold

• Bullish Case: Inflation hedge, central bank demand, and safe-haven asset during global uncertainties.
• Key Players: Barrick Gold (GOLD), Newmont (NEM).
• Risk: Interest rate cuts could impact returns.

9. Water

• Bullish Case: Scarcity makes it an essential resource. Water infrastructure, desalination, and privatization could drive investment.
• Key Players: American Water Works (AWK), Veolia (VEOEY).
• Risk: Regulatory constraints on private water ownership.

10. Potash

• Bullish Case: Fertilizer demand is steady due to global food security concerns.
• Key Players: Nutrien (NTR), Mosaic (MOS).
• Risk: Agricultural cycles can impact demand.
• .
  
  
  

Final Thoughts:

For a balanced, stable, and profitable investment in natural resources over the next two years, Uranium, Copper, and Oil seem the strongest plays due to demand-supply imbalances and global energy trends. Natural Gas and Lithium are also good, but face short-term price volatility. Rare Earths and Nickel are critical, but geopolitical risks and tech advancements could impact pricing. Gold, Water, and Potash are more defensive but lack aggressive upside.

Cameco Corp's Uranium is a crucial component of energy futures

Investment Report: Cameco Corporation and the Global Uranium Market

Executive Summary Cameco Corporation (NYSE: CCJ, TSX: CCO) stands as one of the world’s largest publicly traded uranium producers, playing a vital role in global nuclear energy supply. The company is headquartered in Saskatoon, Saskatchewan, and operates several of the highest-grade uranium mines in the world, primarily in Canada’s Athabasca Basin. While Kazakhstan’s Kazatomprom remains the largest uranium producer globally, Cameco is the dominant player in North America and a key supplier to nuclear utilities worldwide, particularly in the United States.

This report examines Cameco’s business model, financials, production capacity, market position, and strategic outlook, as well as the broader uranium market, including key competitors such as Kazatomprom, Denison Mines, NexGen Energy, and Uranium Energy Corp.

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1. Cameco Corporation: Market Position & Operations

Cameco is the second-largest uranium producer in the world, trailing only Kazatomprom, which accounts for approximately 43% of global uranium production. As of 2024, Cameco is responsible for approximately 15% of total global uranium output, with production expected to increase significantly in the coming years due to growing demand for nuclear energy.

• Key Mines & Production Capacity:

  • McArthur River/Key Lake (Canada): One of the largest and highest-grade uranium mines in the world, restarted in 2022 after being idled in 2018 due to low uranium prices.

  • Cigar Lake (Canada): The highest-grade uranium mine globally, producing over 13 million pounds of uranium in 2023.

  • Inkai (Kazakhstan, JV with Kazatomprom): Cameco has a joint venture stake in this high-producing mine.

  • U.S. & European Partnerships: Cameco has supply agreements with nuclear utilities in North America, Europe, and Asia.

• Production Growth & Outlook:

  • In 2023, Cameco produced 17.6 million pounds of uranium, marking a 69% increase from 2022.

  • Plans to increase production to 23.1 million pounds in 2024.

  • Strategic agreements with the U.S. and European nuclear power sectors to expand exports amid geopolitical tensions affecting uranium supplies.

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2. Financial Performance & Investment Outlook

Cameco has exhibited strong financial performance, benefitting from rising uranium prices driven by increased global demand for clean energy and nuclear power expansion.

• Financial Highlights:

  • Revenue (2023): Approximately $1.93 billion USD.

  • Net Profit (2023): Exceeded $273 million USD.

  • Cash Reserves (2023): Estimated at $1.0 billion USD.

  • Debt-to-Equity Ratio: Relatively low, positioning Cameco for strategic acquisitions or expansions.

• Stock Performance:

  • Cameco’s stock price on the NYSE stood at $47.19 as of February 15, 2025.

  • The company has consistently outperformed broader market indices, reflecting investor confidence in uranium as a key energy commodity.

  • Analysts predict further upside as nuclear power adoption grows globally.

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3. Global Uranium Market Overview

• Canada’s Market Share: Canada remains the second-largest uranium-producing nation, contributing approximately 23% of global uranium supply in 2024.

• U.S. Imports: Canada supplies approximately 27% of the uranium used in U.S. nuclear reactors, with Cameco representing a significant portion of these imports.

• Other Major Producers:

  • Kazatomprom (Kazakhstan): Largest global uranium producer, with a dominant position.

  • Denison Mines (Canada): Focused on exploration and development; key asset is the Wheeler River project.

  • NexGen Energy (Canada): Owns the high-grade Rook I project in the Athabasca Basin.

  • Uranium Energy Corp (U.S.): Expanding production in Texas and Wyoming.

  • Paladin Energy (Australia): Operates the Langer Heinrich mine in Namibia.

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4. Strategic Outlook & Investment Considerations

• Increasing Nuclear Power Demand:

  • Rising interest in nuclear energy as a clean alternative to fossil fuels.

  • Governments worldwide are investing in new nuclear power plants.

• Supply Chain & Geopolitical Risks:

  • Ongoing geopolitical tensions affecting uranium exports from Russia and Kazakhstan.

  • Canada and the U.S. increasing domestic uranium supply chains for energy security.

• Investment Risks & Opportunities:

  • Opportunities: Strong long-term uranium demand, high-grade assets, robust financials.

  • Risks: Price volatility, regulatory changes, mine operational risks.

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Conclusion

Cameco Corporation is a dominant player in the uranium sector, benefitting from rising global demand for nuclear energy. With a strong financial position, high-grade mining assets, and an expanding production capacity, Cameco remains well-positioned for future growth. Investors looking to gain exposure to the uranium market should consider Cameco as a leading option, while keeping an eye on evolving market dynamics, regulatory developments, and geopolitical risks affecting uranium supply chains.

Ed Note: 

today we have no position in Cameco, however we are bullish and of the ten analyst following this stock, all ten say it is a buy. Subsequently, we will be buying the stock on Tuesday!

(Update: Feb 18th 2025, Bought Cameco shares)

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Commodities are often overlooked in a young investors portfolio. They should not be!

In a heated and escalating trade war with Canada, how would an export tax levied by Canada on all it's natural resources entering the USA affect American business and society

 

Below is a high-level assessment of how a hypothetical 25% or 50% Canadian export tax on all Canadian natural resources—oil, gas, metals, minerals, lumber, agricultural commodities, and even fresh water or hydro power—could affect the U.S. economy. This scenario represents a highly escalated trade conflict that would likely be unprecedented given the integrated nature of North American supply chains and the long-standing Canada-U.S. trade relationship.

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1. Immediate Price and Inflation Impacts

1. Spiking Input Costs

   • U.S. companies reliant on Canadian resources (oil, gas, uranium, metals, potash, etc.) would face significantly higher costs.
   • These cost increases would ripple through numerous industries—energy, manufacturing, construction, and agriculture—ultimately raising consumer prices.

2. Widespread Inflationary Pressure

   • The U.S. would see broad-based inflation if major raw materials become more expensive or scarce.
   • Higher costs for fuels (gasoline, diesel, jet fuel), metals (steel, aluminum, copper), and agricultural inputs (wheat, potash fertilizer) would feed into nearly every segment of the economy.

3. Potential “Price Shocks”

   • Resources where Canada is a top supplier (e.g., potash for fertilizer, certain heavy crude oil grades, certain rare earths) could experience short-term shortages in the U.S., causing severe price spikes until alternative sources are found (if feasible).

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2. Sector-by-Sector Effects

1. Energy Sector

   
   
   
   • Oil and Gas:
     • Canada is a leading oil exporter to the U.S., especially heavy crude from Alberta. A 25% or 50% export tax would sharply raise import costs for U.S. refiners.
     • Many refineries, especially along the Gulf Coast and in the Midwest, are optimized for heavier Canadian crude—switching to lighter U.S. shale or other foreign supplies is not straightforward.
     • Natural Gas: Pipeline gas from Canada serves parts of the northern U.S.; higher import costs would raise heating and industrial process costs.
   • Hydroelectric Power:
     
     
     
     • Certain U.S. border states import Canadian hydro power. An export tax would raise electricity costs in those regions.

2. Metals and Minerals

   Canada's natural resources
   1. • 

        Petroleum

        Major energy source
      • 

        Coal

        Significant employment source
      • 

        Iron ore

        Key mining industry
   2. • 

        Potash

        Leading global producer
      • 

        Nickel

        Valuable metal resource
      • 

        Fish

        Sustainable food source
   3. • 

        Copper

        Essential metal resource
      • 

        Zinc

        Important alloy component
      • 

        Molybdenum

        Specialty metal resource
   4. • 

        Silver

        Precious metal resource
      • 

        Diamond

        Luxury gemstone resource
      • Timber

        Renewable resource
   • Canada is a major source of nickel, copper, zinc, aluminum, iron ore, gold, silver, and uranium for the U.S.
   • Canada is the worlds #2 producer of Uranium (nuclear energy) and, Canada has the world's largest deposits of high-grade uranium, with grades of up to 20%, which is 100 times greater than the world average.
     
     
     
   • A steep export tax could disrupt U.S. manufacturing (e.g., cars, aerospace, electronics) and defense (e.g., uranium for nuclear reactors, key metals for military equipment).
   • Prices of consumer products relying on these metals (from cars to electronics) would likely increase.
      

     
     
     
     
     

3. Agriculture and Food

   • Wheat, Meat, Seafood, Maple Syrup, etc.:
     • If these exports faced a 25%–50% tax, U.S. wholesalers and consumers would likely pay significantly more for Canadian wheat, beef, pork, fish, and specialty items (e.g., maple syrup and Lobster).
     • Certain regional markets in the U.S. (e.g., northern states) rely heavily on cross-border supply for fresh or specialty goods (ie: Seafood).

4. Fertilizer (Potash)

    
   
   
   
   
   • Canada is the world’s largest producer of potash, a key fertilizer ingredient. A hefty export tax could raise costs for U.S. farmers significantly, impacting crop yields and food prices.

5. Lumber and Forestry Products

   
   
   
   • Canada is a major exporter of softwood lumber and other wood products.
     
     
     A steep export tax drives up construction costs in the U.S., affecting everything from homebuilding to renovation industries.

6. Fresh Water Exports (in bulk) Canada has 9% of worlds fresh water supply

   
   
   
   • While large-scale bulk water exports are minimal or highly regulated, any new tax on water or hydro resources would raise utility costs in cross-border communities.(Also fracking, as in America's shale operations, requires massive amounts of fresh water)

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3. Supply Chain Disruptions and Reconfiguration (USA)

1. Search for Alternative Suppliers

   • U.S. companies would scramble to find replacement sources—domestically or overseas—for critical inputs (heavy crude, metals, potash, lumber).
   • This process can be time-consuming and may come with higher transportation/logistics costs.

2. Retooling and Capital Investment

   • Refiners configured for heavy Canadian crude might face expensive refitting to process lighter oil or other blends from countries like Venezuela, Saudi Arabia, or Mexico (all with their own geopolitical or supply constraints).
   • Manufacturers dependent on Canadian metals (like nickel or aluminum) might shift supply chains to other countries, though quality, reliability, and shipping costs vary.

3. Trade and Policy Uncertainty

   • The fear of future escalations or shifting tariffs can freeze investment decisions, delaying expansion or hiring in affected sectors.
   • Multinational companies operating on both sides of the border might re-evaluate where to locate production facilities.

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4. Impact on U.S. Consumers and Businesses

1. Immediate Cost Pass-Through

   • Companies facing a sudden 25%–50% cost increase on Canadian resources will pass as much of that cost as possible onto consumers—leading to higher prices for energy, groceries, goods, and services.

2. Potential Job Losses

   • While some U.S. resource producers might enjoy a temporary competitive edge, many businesses reliant on Canadian inputs could see profit margins squeezed or lose competitiveness (especially if they export finished goods to other markets).
   • Supply chain disruptions often lead to factory slowdowns, reduced output, and in some cases layoffs.

3. Inflationary Pressure and Reduced Purchasing Power

   
   
   
   • As prices rise, American households and businesses have less disposable income to spend on non-essential goods, possibly slowing overall economic growth.

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5. Geopolitical and Long-Term Consequences

1. Severe Strain on Bilateral Relations

   • A blanket 25%–50% export tax on all Canadian resources is an extreme measure that signals a deep breakdown in trade relations. The resulting tension could spill over into defense, security, and diplomatic realms.

2. Undermining USMCA (Formerly NAFTA)

   
   
   
   • This move would eviscerate the spirit of the U.S.-Mexico-Canada Agreement and likely prompt complex legal battles.
   • Retaliation and counter-retaliation could spiral, damaging the integrated North American economy.

3. Acceleration of Resource Self-Sufficiency or Alternate Sourcing

   • Over the long term, the U.S. might invest more heavily in domestic mining, energy production, or forging new trade deals with other countries.
   • Canada’s potential leverage is highest in the short to medium term, before U.S. producers scale up or alternative suppliers emerge.

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Conclusion

A 25%–50% export tax on all Canadian natural resources would pose a significant economic shock to the United States:

• Energy and industrial supply chains would face immediate cost inflation, especially for heavy crude, metals, potash, and lumber.
• Consumers and businesses would encounter higher prices on everything from fuel and electricity to cars and groceries, fueling inflation.
• Supply chain disruption would be severe, compelling U.S. companies to retool or seek alternative suppliers, processes that are costly and time-consuming.
• The overall U.S. economy could face slower growth, job losses in industries reliant on Canadian inputs, and a potential inflationary spiral if retaliation escalates.

In short, while a few domestic resource producers in the U.S. might see short-term gains, the vast majority of the U.S. economy would feel pain from such a sweeping Canadian export tax—a drastic measure that signals a major breakdown in the traditionally cooperative Canada-U.S. trade relationship.

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