Uranium stocks got hammered last year in the wake of the Fukushima disaster.
But now, roughly one year later, uranium mining stocks have finally begun to bounce back... just like we told you they would.
After getting pummeled in 2011, shares of Cameco Corp. (NYSE: CCJ) - the world's second-largest uranium miner - are up more than 30% this year.
But that's just the beginning.
These stocks are all still about 50% below where they traded prior to Japan's disaster.
And rising demand for nuclear energy and a dearth of uranium supplies will soon conspire to push these companies back to their pre-Fukushima levels.
You see, uranium miners cannot expand their operations – or even tread water – with uranium prices at $50.00-$60.00 per pound like they are currently.
They'd much rather have uranium prices of $70.00-$80.00 per pound. So right now there's not enough uranium being produced to keep up with growing demand.
About 170 million pounds of uranium was consumed last year, but only 140 million pounds was produced. And when you look at the way nuclear power projects are coming back online, it's obvious that the discrepancy will only get worse.
Global use of nuclear energy could increase by as much as 100% in the next two decades, according to the International Atomic Energy Agency (IAEA).
A Nuclear Renaissance
In spite of the Fukushima disaster, the number of planned nuclear plants in the past year rose from 156 to 163. In fact, globally, the number of nuclear reactors is still on track to swell from 434 today to 820 by 2030. And 96 reactors are set to come online by 2021.
China will be the driving force behind this growth. China is the world's largest emitter of greenhouse gases, thanks to a battery of carbon-dioxide-spewing coal-fired power plants.
Indeed, coal supplies 80% of China's power. And the fact is, windmills and solar panels don't have enough juice to power a country home to more than 1 billion people and the world's second-largest economy.
That makes nuclear power the country's best option.
China is on track to build up to 100 nuclear reactors – nearly a quarter of the global total – by 2030.
Twenty-seven of those plants are already under construction, and an official recently told the China Daily that plans for "about 10" plants put on hold last year would soon be green-lit for construction.
China isn't alone, either.
Many other countries around the world are putting their nuclear power programs back on track.
India has announced plans to grow its nuclear power capacity from 5,000 megawatts to 63,000 megawatts by 2030. And even smaller countries in Europe, such as Poland, France, and Great Britain are pushing ahead as well - much to the consternation of some of their neighbors.
In fact, British Prime Minister David Cameron and French President Nicolas Sarkozy last month signed a joint declaration of cooperation on nuclear power. France already gets 75% of its power from nuclear plants.
And while other countries like Germany have decided to purge themselves of nuclear power, their boycott will have only a limited effect.
The IAEA says that an accelerated phase-out of nuclear power in Germany, a government review of the planned expansion in Japan, and temporary delays elsewhere in the world will result in only a 7%-8% drop in projected demand growth for 2030.
Meanwhile, global usage of nuclear energy will rise 35%-100% by then.
That's good news for the long-term prices of both uranium and uranium mining stocks.
Cameco Corp. (NYSE: CCJ) and Uranium Energy Corp. (AMEX: UEC)
"Fukushima or no Fukushima, the world energy situation remains unchanged," Cameco CEO Tim Gitzel told the Canadian Press. "Huge quantities of huge, reliable and affordable electricity will be needed to meet future demand."
Since the 1980s, global electricity consumption has tripled and is expected to more than double again over the next two decades. Nearly two billion out of the world's seven billion inhabitants don't currently have access to electricity, Gitzel said.
"More reactors means more demand for uranium," he said.
Cameco intends to double its uranium production by 2018. And earlier this month the company agreed to buy AREVA SA's 27.94% stake in the Millennium project - a uranium mine in Canada's Athabasca Basin. That will increase Cameco's interest in the mine to 69.9%.
Cameco stock traded in the low-$40s prior to Fukushima and the mid-$50s when uranium prices peaked in 2007. So at its current level of about $23 a share, it looks like a bargain.
Another uranium miner trading at a steep discount is Uranium Energy Corp. Like Cameco, UEC is still 50% below its pre-Fukushima level even after an impressive surge to start the year.
UEC is the first company to start a new uranium mine in the United States in nearly six years. The Corpus Christi-based UEC aims to reach an initial production rate of 1 million pounds per year. Its processing plant in South Texas has the capacity to process up to three times that amount, which could nearly double what U.S. production is today.
Incidentally, U.S. regulators just approved the first new nuclear power station in more than 30 years - just as 15%-20% of the U.S. oil supply chain is being threatened by political disruptions in Iran.
Nuclear plants already produce about 20% of U.S. energy. In terms of uranium consumed by utilities, that translates into 55 million pounds of uranium per year. Currently, however, uranium mining in the U.S. only provides about 3.5 million-4 million pounds per year.
Both UEC and the Saskatoon-based Cameco will be prime beneficiaries of a nuclear revival. They're also major holdings in the Global X Uranium ETF.
Jason Simpkins is managing editor of Money Morning.