Serious Money:The price of oil has surged in recent years and is within touching distance of $100 (€69.28) a barrel. It has been accompanied by a bull market in uranium, which has seen prices soar from less than $7 a pound seven years ago to a recent high of $135. This has received far less attention.
The positive fundamentals behind soaring uranium prices are easy to understand as both supply and demand factors have contributed to a tighter market.
Global electricity production is expected to double over the next quarter-century. But concerns are mounting over the ability of oil and gas reserves to meet the demand, over the increasing dependence on supplies from unstable regions, and over the environmental impact of fossil fuels. The search for alternatives has spawned a new nuclear age.
The first nuclear reactor was built in 1942 at the University of Chicago. By the mid-1950s, civilian power plants had been built in Russia, the UK and the US. However, the spark that lit the torch for the first nuclear age was the decision by the Organisation of the Petroleum Exporting Countries to increase the price of oil to $5.11 a barrel, a 70 per cent rise, in October 1973.
Almost 200 nuclear power reactors were built over the next 10 years, more than double the number constructed in the previous decade. The demand for uranium saw prices surge from less than $6 a pound in 1972 to more than $40 two years later.
But high construction costs, the long lead time before a plant is operational and high interest rates meant many projects were difficult to justify. Worldwide reactor orders and starts peaked in the mid-1970s and a number of projects were cancelled.
The death knell was sounded in March 1979 when a meltdown at the Three Mile Island plant in Pennsylvania contributed to a decline in public support for nuclear power.
By the end of 1980, the price of uranium had more than halved from its peak in early 1978.
The 1980s and 1990s dealt further blows to the industry, with the oil-price collapse, the Chernobyl disaster and the demise of the Soviet Union.
The end of the cold war saw nuclear arms production grind to a halt and the uranium from dismantled weapons meant there were sufficient supplies to fuel reactors for several years.
Uranium prices continued to decline and by the turn of the millennium were more than 90 per cent below their record high. The 1990s saw an average of just three new nuclear plants built each year (roughly the same as the number of plants being decommissioned) while exploration for new uranium deposits screeched to a halt.
Underinvestment has seen stockpiles decline dramatically. Uranium from nuclear weapons is almost exhausted and annual demand exceeds production.
Global uranium production amounted to almost 40,000 tonnes in 2006, or just 60 per cent of the world's reactors' requirements, and the deficit should grow as countries turn to nuclear power to ease supply and environmental concerns.
A number of western countries have reaffirmed their commitment to nuclear power and others are reconsidering their position. China and India plan to dramatically increase their capacities to generate nuclear power over the next 10 years.
Flooding at the Cigar Lake mine in Canada last year has delayed annual production, amounting to 17 per cent of the world's annual output, until 2011.
Observers have suggested that the removal of Cigar Lake is the uranium equivalent of the exclusion of Saudi Arabian production from oil markets.
The fundamentals driving the strong performance of uranium are powerful, but many investors remain sceptical. Perhaps they should reconsider their position.
Greenpeace co-founder Patrick Moore now believes that "nuclear energy may just be the energy source that can save our planet from another possible disaster: catastrophic climate change".
The world's largest uranium producers - Cameco, Rio Tinto and Areva - are worthy of consideration for purchase.
