The dramatic rise in the price of uranium brought a plethora of new mining and exploration companies to the market. Alongside these new firms, established companies were increasing their current uranium mining capacity and taking all possible measures to cash in on the 'hot' commodity. The almost exponential growth in the price of uranium coincided with rises in the price of stocks which were involved in uranium production. The graph below shows the price movements of Uranium U3O8 alongside three of the largest uranium mining companies, Cameco Corp, Rio Tinto and Areva (all prices are in USD). As can be seen clearly from the graph, all three mining companies experience significant price rises as the uranium bubble materialises.
In the summer of 2008, problems in the US sub-prime mortgage market came to light and the notorious financial crisis ensued. This caused the uranium bubble to burst and prices (of pretty much all assets) to tumble. Many of the new companies that had simply jumped on the uranium bandwagon were forced out of business while more established companies diverted capital away from uranium production or simply abandoned it altogether.
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