China is fast moving to secure a global supply chain of uranium, in order to feed a massive nuclear power investment over the next decade.

This week, a major deal was signed between Canadian multi-national uranium miner Cameco and the China Nuclear International Corporation

Cameco (TSX: CCO; NYSE: CCJ) said it officially signed the uranium supply agreement with China Nuclear International Corporation, a subsidiary of China National Nuclear Corporation (CNNC), one of the country’s largest nuclear power operators.

“China is counting on nuclear energy to play a major role in its commitment to achieve net-zero emissions, and CNNC is a large and growing part of that effort,” said Cameco president and CEO Tim Gitzel.

“Cameco is very pleased to continue increasing our contribution toward the attainment of China’s important climate goals.”

The deal raises serious questions on how once reliable uranium supply could be taken away from North American, European and APAC fuel buyers. 

The market for uranium is typically price inelastic, with nuclear power fuel buyers coming to market as needs arise for long-term contract deals.

However, the supply pressures for the market keep building. 

With uranium prices surging dramatically to 15-year highs in recent weeks sitting around US$74.50 per pound, the Cameco-China deal places more urgency on nuclear fuel buyers to secure long-term deals sooner.

“There are very few reliable uranium suppliers in the world,” CEO & Co-Founder of Gryphon Mining said.

“Especially those in politically safe jurisdictions. In a rising uranium price environment, China has likely secured a substantial portion of some of the most dependable production available. The available supply side of the uranium equation likely shrunk significantly today,” he said.