Nuclear Power, Critical Materials, and Precious Metals: A Post-Election Outlook

As the world stands at the crossroads of a new era in energy, the next few years are set to be pivotal for nuclear power, clean energy technologies, and critical materials. With the incoming Trump administration poised to influence U.S. energy policies, questions surrounding the future of these sectors are crucial for both investors and policymakers. In a recent interview, John Ciampaglia, CEO of Sprott Asset Management, shared his insights on how political shifts, global tensions, and technological advances will shape the energy landscape—and how investors can prepare for the changes ahead.

The Future of Clean Energy Policies Under a New Administration

One of the most significant legislative changes shaping U.S. energy policy in recent years has been the Inflation Reduction Act (IRA), which was passed in 2022. This landmark bill, which includes hundreds of billions of dollars in subsidies for clean energy, aims to tackle climate change and shift the U.S. toward renewable energy sources. The IRA has been instrumental in pushing forward investments in nuclear energy, energy storage solutions, and electric vehicles, all of which play vital roles in reducing the nation’s carbon footprint.

However, with the upcoming election, many are speculating on how the new administration will approach these energy initiatives. While it’s likely that certain provisions of the IRA—such as electric vehicle tax credits—may be at risk of being reduced or eliminated, the core support for clean energy infrastructure in certain regions of the U.S. is expected to continue. Many of the largest investments in green energy projects have been concentrated in “red states,” where local resistance to curtailing these initiatives could prove powerful. These states are seeing significant job creation from the expansion of clean energy projects, a trend that the incoming administration will be hard-pressed to disrupt.

The Geopolitical Impacts on Nuclear Power and Uranium Supply

Geopolitical tensions are also playing a key role in the energy sector. A significant challenge to the U.S. nuclear energy industry has been its reliance on foreign sources for enriched uranium. Russia, a major provider of uranium enrichment services, recently imposed restrictions on uranium exports to the U.S. as part of a retaliatory move following sanctions from the West over the invasion of Ukraine. This disruption has sent shockwaves through the nuclear fuel supply chain, raising concerns about the U.S.’s ability to maintain and expand its nuclear energy infrastructure.

The U.S. government has already moved to ban the import of enriched Russian uranium by 2028, but the current transition to domestic uranium enrichment capacity could be a slow and costly process. As other Western nations, including the U.S., seek to wean themselves off Russian uranium, the demand for domestic uranium production and enrichment is likely to increase. This geopolitical shift is already having an impact on uranium prices, which spiked sharply in response to the news, signaling a potential rise in demand for uranium in the coming years.

This situation underscores the strategic importance of nuclear power in energy security. As countries strive for energy independence and reduced reliance on volatile foreign sources, nuclear energy stands out as a clean, reliable, and scalable solution. However, the transition to greater nuclear capacity—along with the ongoing supply chain disruptions—will require significant investment in both uranium mining and processing.

The Role of Big Tech in the Nuclear Revolution

Another unexpected trend is the increasing involvement of big tech companies, such as Microsoft, Google, and Amazon, in the nuclear energy sector. These companies, which operate massive data centers worldwide, are increasingly aware of the energy demands of their operations. The rise of AI and machine learning has made data centers even more energy-intensive, with some reports suggesting that AI data queries consume up to 10 times more energy than a standard query.

In response to this growing demand for reliable and clean power, these tech giants are starting to invest in nuclear energy, particularly small modular reactors (SMRs). SMRs are compact, scalable nuclear reactors that can be deployed closer to where the power is needed, avoiding the expensive and complex process of building extensive transmission lines. By securing long-term power purchase agreements with companies building SMRs, tech firms are ensuring that their data centers will have a reliable source of energy that aligns with their own sustainability goals.

This movement into the nuclear sector by major technology companies is an exciting development, as it brings much-needed capital and attention to a sector that has historically struggled with financing. Moreover, it highlights the growing recognition of nuclear power as a key element in the global energy transition, one that is both clean and capable of meeting the surging demand for power in the digital age.

Critical Materials: The Foundation for the Energy Transition

At the heart of this evolving energy landscape is the need for critical materials—copper, nickel, uranium, and other minerals that are essential for energy generation, storage, and transmission. As clean energy technologies such as wind, solar, and nuclear power proliferate, the demand for these metals is expected to rise significantly.

For instance, copper is crucial for electricity transmission and energy storage, while nickel is key to the production of batteries for electric vehicles. Uranium, of course, is the primary fuel for nuclear power plants, and as the world looks to nuclear as a key part of its clean energy future, the demand for uranium is expected to surge.

The transition to a cleaner energy system—and the industrialization of technologies like electric vehicles and energy storage—will place increasing pressure on the supply of these critical materials. Countries like the U.S. are already working to secure their supply chains for these materials, often with an eye on reducing dependence on China and other countries that dominate the production of these critical resources.

Investing in companies that mine and process these essential metals will likely prove lucrative in the coming years, as they will play a crucial role in powering the energy transition. And with geopolitical tensions affecting global supply chains, these resources are becoming not just valuable, but strategic assets for national security.

Precious Metals as a Hedge Against Economic Instability

Alongside critical materials, precious metals—particularly gold and silver—remain a safe haven for investors amid growing economic uncertainty. The U.S. national debt has ballooned to over $36 trillion, and as interest payments on that debt rise, the dollar's purchasing power is eroding. In such an environment, precious metals provide an invaluable hedge against inflation and currency devaluation.

As governments around the world grapple with the consequences of their debt and monetary policies, gold and silver offer a tangible store of value that is not subject to the whims of central banks. With nuclear power and critical materials set to drive the next commodity supercycle, investing in precious metals can be a way to diversify and protect against the risks posed by the unfolding global crisis.

Conclusion

The future of nuclear energy, clean technologies, and critical materials is inextricably linked to the ongoing political and economic developments in the U.S. and globally. With the incoming administration likely to continue supporting nuclear energy and energy independence, the next few years present exciting opportunities for investors in these sectors.

The uranium market is already reacting to geopolitical tensions, and as the world increasingly turns to nuclear power for its energy needs, the demand for uranium—and the stocks of companies involved in uranium mining—is set to rise. At the same time, tech giants are embracing nuclear energy to power their data centers, creating new opportunities for investment in small modular reactors.

As the energy transition unfolds, critical materials like copper, nickel, and uranium will be in high demand. For those looking to gain exposure to these markets, Sprott offers a variety of ETFs focused on these critical sectors, providing a diversified way to invest in the future of energy.

At the same time, precious metals like gold and silver remain key assets for safeguarding wealth against economic instability. As the global monetary system faces growing pressure, the role of precious metals in protecting against inflation and currency devaluation will only become more important.

For more insights into the nuclear power and critical materials sectors, and to learn about actionable investment strategies, explore Sprott’s suite of ETFs and resources.