I don't expect any nuclear explosions, but there's been plenty of instability in the uranium market for some time. New uranium supplies from mines have fallen short of the amount used in electricity generation ever since 1985. I discussed this situation more than a year ago, but the largest publicly traded producer of uranium available to U.S. investors, Cameco (NYSE: CCJ), has seen its shares fall. I have decided to investigate what has changed since last year and see whether there's an even bigger opportunity building.

New estimates show more reactors
In March, Cameco updated its estimates for the growth in nuclear reactors worldwide between now and 2019. The company estimates that there will be 108 reactors built and 19 shut down, bringing the net new reactors built to 89. Of that number, 42 will be in China, five in Russia, 12 in India, and only one in Brazil. That brings the total from 438 operating reactors at the moment to 527.

The top three uranium producing countries in 2009 are Kazakhstan (27%), Canada (20%), and Australia (16%). In 2007, Kazakhstan was not even on the radar screen as producer, but in just three years, it has taken the No. 1 spot, as its state nuclear company Kazakhatomprom begun producing. Since this is not a publicly traded company, the only other option to play Kazakhstan is Uranium One, which trades on Canada's Toronto Stock Exchange.

The company has a market cap of about C$1.7 billion and had C$152 million in revenue during 2009. Surprisingly, this makes it Canada's second biggest uranium company after Cameco. ARMZ, which is a Russian state-owned company, announced last month that it would pay $610 million to increase its stake in Uranium One from 23% to 51%.

Uranium One is profitable, with a production cost of less than $20 per pound versus a current spot price for uranium of $41.50. Anyone willing to venture into buying Canadian stocks should be intrigued.

Cameco, on the other hand, is the classic uranium play. It trades at nine times earnings and yields 1.1% with a market cap of $9.7 billion. The trouble is that ongoing restructuring will make earnings erratic, but the company has stated that it's aiming to double uranium production by 2018. The price of uranium is also likely to rise because of the increase in the number of reactors, along with less uranium coming from the dismantling of nuclear weapons, which is slated to end in 2013 and has been providing a substantial amount of supply to the market for years. The stock is down over the past year, but the outlook has turned even more bullish. You need to be patient and willing to hold for five years, but there is an opportunity here.

The largest uranium reserves are down under
Australia just reduced the proposed new mining tax that cost the former Prime Minister Kevin Rudd his career, but I am still amazed that the country is increasing taxation on a sector that is responsible for so much of Australia's prosperity. It is surprising that as the third largest supplier of uranium and with the world's largest reserves, Australia has no nuclear reactors operating in the country. Some Australian states have long-standing bans on new uranium mining, which is why this mining-oriented economy did not produce more despite the rich deposits. But as the mining bans are falling, this is likely to change.

Rio Tinto (NYSE: RTP) in 2009 managed to produce as much uranium as Cameco. The company has a main uranium subsidiary, Energy Resources of Australia, which currently produces 10% of the world's uranium production. Rio Tinto owns 68.4% in the company in addition to its other wholly owned subsidiaries. Energy Resources is separately traded in the local market, but since Rio Tinto owns such a large chunk of the company, Rio Tinto has to consolidate Energy Resources' financial performance in Rio's own financial statements. The shares also trade in the OTC market in the U.S., but they are not ADRs, and the volumes are thin. Still, this is a way to directly invest in the second largest uranium mine in the world.

Finally, BHP Billiton (NYSE: BHP) is also a major player, producing roughly 40% as much uranium as Rio Tinto in 2009. For both Rio Tinto and BHP, uranium is a small part of their overall operations. Both are huge mining companies and are therefore not so much a play on any single commodity but rather on the health of the world economy as a whole.

Whether you consider a smaller, more aggressive uranium producer or a larger diversified mining company, it is highly likely that uranium demand, and consequently uranium prices, will increase in the next 10 years. That's what any commodity investor wants to hear.

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Fool contributor Ivan Martchev does not own shares in any of the companies in this story. The Fool owns shares of Cameco. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.