A Case for Investing in Uranium and Other Commodities

There is a particular kind of folly that afflicts late civilisations. It is not ignorance, nor even corruption, but a systematic preference for the unreal over the real. Wealth becomes detached from production, investment from anything that might be weighed, dug, or burned. The result is an economy that appears to expand while hollowing itself out. We have seen this process before, though never in quite so perfected a form as in our own time.

The modern investor is told that wealth lies in code, in platforms, in abstractions layered upon abstractions. He is directed towards the great IT companies, whose valuations have reached levels that would once have been considered not merely optimistic but insane. These companies, we are assured, are the future. They promise growth without friction, profits without limit. They exist, in theory, outside the constraints that governed every previous form of enterprise. The old rules no longer apply. The physical world, with its limits and inconveniences, has been transcended. This is, of course, nonsense. No economy has ever escaped the need for energy and materials. The digital world rests on a physical substrate that is not only indispensable but increasingly strained. Data centres require electricity. Networks require metals. Devices require components that must be mined, refined, and assembled. The fantasy of weightless wealth is sustained only so long as the underlying system continues to function without interruption. When that system falters, the illusion dissolves.

The great IT companies are therefore not independent of the physical economy; they are parasitic upon it. Their valuations assume a continuation of conditions that are unlikely to endure. They depend on cheap energy, stable supply chains, and a political environment willing to subsidise their expansion. Each of these conditions is now under pressure. Energy costs are rising. Supply chains are fragmenting. Governments, faced with fiscal and geopolitical constraints, are beginning to reconsider the allocation of resources. The era in which capital could be directed almost entirely towards intangible assets is drawing to a close.

There is another difficulty, less often remarked upon, but no less significant. The profitability of many technology firms rests on a peculiar combination of monopoly power and speculative expectation. They are valued not on present earnings, but on the assumption of future dominance. This creates a fragile equilibrium. If growth slows, or competition increases, or regulation intervenes, the justification for these valuations disappears. What follows is not a gentle correction, but a collapse in confidence. The higher the ascent, the more sudden the fall.

It is here that the contrast with commodities such as copper and uranium becomes instructive. These are not fashionable assets. They do not promise exponential returns or transformative narratives. They offer something more prosaic, and therefore more reliable: they are necessary.

Copper is the metal of electrification. Every expansion of electrical infrastructure, every extension of power grids, every attempt to transition to so-called renewable energy increases the demand for copper. Wind turbines, solar panels, electric vehicles—all require large quantities of it. Even the digital economy, so often presented as immaterial, depends on copper for its wiring and transmission. There is no substitute that can be deployed at scale without significant loss of efficiency. Supply, meanwhile, is constrained by the realities of mining. New deposits are harder to find. Existing mines are becoming less productive. Bringing new capacity online requires time, capital, and political stability, all of which are in short supply.

Uranium presents an even clearer case. It is the only energy source capable of providing large-scale, reliable, low-emission power without the intermittency that plagues wind and solar. A small quantity of uranium contains an immense amount of energy. This is not a matter of opinion, but of physics. For decades, the expansion of nuclear power was held back by a mixture of fear and ideology. Accidents such as Fukushima were treated not as isolated events, but as definitive arguments against the technology itself. Governments retreated. Projects were cancelled. Investment dried up.

Yet the underlying demand did not disappear. Nuclear reactors already built continued to require fuel. Countries less susceptible to Western anxieties continued to expand their programmes. The result was a period in which supply was reduced while demand remained broadly stable. Prices fell, not because uranium ceased to be useful, but because the market was distorted by sentiment.

That period is now ending. The same governments that once turned away from nuclear power are returning to it, though without admitting their error. Energy security, rather than environmental virtue, is the driving force. The realisation has dawned that a modern economy cannot function on intermittent energy sources backed by imported gas. Nuclear power, with all its complexities, offers a solution that no other technology can match at scale. As this recognition spreads, demand for uranium will increase. Supply, however, cannot be expanded quickly. Mines closed during the years of low prices cannot be reopened overnight. New projects face regulatory and financial obstacles. The imbalance between supply and demand is therefore likely to persist.

There is a broader point to be made. Investment in commodities such as copper and uranium is not merely a bet on specific markets. It is a wager on the reassertion of reality. The past few decades have been characterised by an attempt to construct an economy detached from physical constraints. This attempt has been sustained by cheap money, political indulgence, and a willingness to ignore inconvenient facts. It is now encountering limits. Energy shortages, supply disruptions, and geopolitical tensions are reminders that the physical world cannot be wished away.

In such a context, the relative attractions of different kinds of investment become clearer. The great IT companies, for all their ingenuity, are exposed to a reversal of the conditions that allowed them to flourish. Their valuations embed assumptions that may not hold. They are, in a sense, luxury goods of the financial system—highly desirable in times of abundance, but vulnerable when conditions tighten. Commodities, by contrast, are necessities. They may be subject to cycles and volatility, but their long-term demand is anchored in the requirements of any functioning economy.

It would be foolish to suggest that investment in copper and uranium is without risk. Prices can fall. Projects can fail. Political interventions can distort markets. But these risks are of a different order from those associated with assets whose value depends largely on collective belief. A mine that produces copper, or a facility that supplies uranium, has an intrinsic connection to the real economy. Its output is required, regardless of fashion.

There is a passage in Lucretius that I have always found instructive: suave, mari magno turbantibus aequora ventis, e terra magnum alterius spectare laborem—it is pleasant, when the winds trouble the great sea, to watch from land the struggles of another. The modern investor, standing on the shifting deck of fashionable assets, may take little comfort in this. But he might consider whether he has chosen the right place from which to observe the storm.

The age of illusion is not yet over. It may persist longer than prudence would suggest. But its end is visible, and with it the revaluation of what is necessary and real. Those who have directed their capital towards the latter may not experience the intoxicating gains of the past decade. They are, however, less likely to share in its eventual reckoning.

For the avoidance of doubt, none of the above is to be taken as financial advice. Investments can fall as well as rise. Before risking your savings, I advise you to consult someone licenced by your government. He will surely have your best interests uppermost in his mind.