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September 25, 2019 | Thorium: Great for the Future, Not so Great for Speculation

Lobo Tiggre, aka Louis James, is the founder and CEO of Louis James LLC, and the principal analyst and editor of the Independent Speculator. He researched and recommended speculative opportunities in Casey Research publications from 2004 to 2018, writing under the name “Louis James.” While with Casey Research, he learned the ins and outs of resource speculation from the legendary speculator Doug Casey. Although frequently mistaken for one, Mr. Tiggre is not a professional geologist. However, his long tutelage under world-class geologists, writers, and investors resulted in an exceptional track record. The average of the yearly gains published for the flagship Casey publication, the International Speculator, was 18.5% per year during Tiggre’s time with the publication. A fully transparent, documented, and verifiable track record is a central feature of services going forward. Another key feature is that Mr. Tiggre will put his own money into the speculations he writes about, so his readers will always know he has “skin in the game” with them

The prospect of a renewed nuclear renaissance I’ve written about is a welcome source of encouraging news. How ironic, if global warming fears result in a better world—powered by fission reactors.

I doubt that abundant, cheap, clean energy would end war and strife, as some dreamers believe (people will always find things to fight about), but it sure would make the world a richer place.

I also doubt it would make for a utopia of Haves without any Have-nots. But the Have-nots in a world unconstrained by energy scarcity would live longer, healthier lives than today’s billionaires. Just as poor people in the developed world live longer, healthier lives than the kings and queens of old.

Whether these lives are “better” is a philosophical question. It’s one starving people don’t have time for. The people in such a world at least have the time to develop as human beings and have a shot at much better lives by almost any measure.

Thorium vs. Uranium

Before we let our own visions of a better, nuclear-powered future lead us to possibly false conclusions, it’s important to remember that uranium is not the only nuclear fuel.

The first nuclear reactor to produce electricity for an urban power grid came online in Obninsk, USSR, in 1954. The next one was in England, in 1956. Both used uranium as fuel. But by 1964, the Oak Ridge National Laboratory in Tennessee had built a reactor that used thorium as its primary fuel. The idea was to create a simpler, cheaper, and less dangerous type of nuclear reactor—one not prone to melting down. It worked; the experiment ran without incident from 1965 to 1969.

So why does the world still use uranium fuel reactors today?

There are many factors, of course. We can’t know what was said and done in unrecorded sessions behind closed doors. But the story is that one needs highly enriched uranium (HEU) for nuclear weapons. The same technology can produce the low-enriched uranium (LEU) needed for power plants along the way. And the Cold War arms race was on… So, rather than divide resources into developing thorium reactors for civil energy and uranium enrichment for military purposes, the world’s leading powers focused their efforts on advancing uranium-based technology.

Now, in the 21stcentury, world powers are concerned with preventing nuclear arms proliferation. This concern is breathing a second life into developing thorium-based power plants. Ex-NASA engineer Kirk Sorensen has become a successful thorium evangelist. He’s now the CTO at a private thorium power development company called Flibe Energy. An even more ambitious project called Copenhagen Atomics aims to mass-produce safe thorium reactors that can fit in a cargo container.

Thorium may be an idea whose time is coming, but that doesn’t mean it’s on our doorstep.

It’s a long way from a visionary’s Powerpoint presentation to actual deployment in the real world. Just look at how long it took Elon Musk to make a going concern of his private rocket company, Spacex. One could argue that he’s yet to make a truly going concern of his electric car company, Tesla.

And yet, people all over the world are driving Teslas. And Spacex offers its customers both the cheapest access to space as well as the most powerful rocket in the world.

More directly significant is that India has already built the world’s first commercial thorium-based power plant, Kalpakkam, though it has yet to come online.

Frankly, scientists and engineers still debate the merits of thorium power. One key issue that has emerged is that while it may be more difficult to use the thorium fuel cycle to make nuclear weapons, it is theoretically possible. Concern over this could slow progress greatly. But it’s already well established how to use the uranium fuel cycle to generate HEU for weapons, so, at the very worst, thorium is no worse than uranium. And while this could theoretically be a problem, no one has actually made a nuclear weapon starting with thorium.

What is generally accepted is that various reactor designs using thorium would be much safer.

The basic difference is in the consequences of failure to control the reaction. In today’s water-cooled uranium reactors, that can cause the reaction to increase, which can result in a meltdown and an explosion. In a thorium molten salt reactor, it stops the reaction. No explosion.

Combine this with the increasing panic among climate change activists as the world consistently fails to meet atmospheric carbon reduction goals, and thorium power starts looking really good. If interest spreads, the money will come. Flibe Energy or Copenhagen Atomics could be the next Spacex.

How to Speculate—Don’t

Let’s say India’s long-delayed thorium-based plant does come online this year and shows the world it can be done. The floodgates open and thorium becomes the next big thing. Great. But how would we speculate for profit?

First, let me emphasize that this may not happen. For all the mounting interest, it’s never been done before. India could fall flat on its face—it’s already years behind schedule—and stick with conventional nuclear power.

Thorium is not about to eat uranium’s lunch.

But even if India is successful, it will still take years for the world to even begin making the switch. This is what I’ve meant every time I’ve said that uranium can’t be substituted any time soon. Large scale substitution would take decades.

Okay, so I’m not dumping my uranium stocks—but would I buy thorium stocks?


Thorium is much more abundant than uranium. In fact, it’s so abundant, it’s a problem. It frequently occurs with rare earth elements (REEs). REE producers extract the thorium to create salable REE products, resulting in thorium being radioactive waste that needs careful disposal. You may have seen this problem highlighted in the recent news headlines. Malaysia yanked Lynas Corporation’s REE processing plant permit precisely because they don’t want to be stuck with the radioactive waste. Malaysia might change its tune if those in power realize that this waste could be a cheap source of fuel, but that’s not the point. The point is that thorium is common and could be supplied in large quantities by rare earth producers.

It gets worse.

A big reason why India pioneered building a thorium based power plant is that India has the largest known thorium resources in the world. It has beaches covered with the stuff. The government would love nothing better than to turn sand into power for its growing masses.

The source of all the power the world could need for generations to come is so oversupplied, there’s no need to bother exploring for it.

Okay, so it’s not a good commodity to speculate on—what about those companies that might become the Spacex of thorium?

Could Flibe Energy or Copenhagen Atomics be the next Spacex? Sure. Will they? Absolutely no way to tell.

Remember that the pioneers taking the most arrows.

Remember also how many rocket dreamers never got off the ground—and how many more electric car companies ended up in bankruptcy.

Remember all this if you start hearing more and more hype about thorium. The hype may even be based on truth. Thorium could eventually replace uranium in the decades ahead. But for now, it’s all storyum.

I might support such companies as a philanthropist, but not as a speculator.

Caveat emptor,

Lobo Tiggre Signature

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September 25th, 2019

Posted In: Louis James

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