Uranium price: $48:
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Uranium price: $48:
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+25 cents to $US48.25
http://www.uranium.info/
Nufcor listing to fly amid unique market
David McKay
Posted: Tue, 18 Jul 2006
[miningmx.com] -- FEARS that the uranium market might become subject to some of the zealous trading experienced in other commodity markets seems misplaced. “It’s not really like any other commodity market,” says Charles Scorer, CEO of Nufcor International, the British-based marketing and research company.
The uranium price had improved to around $46/lb from under $10/lb at the beginning of 2004. The price gains are of a similar quantum to the more recent improvement in the traded prices of some base metals and precious metals, such as gold and platinum.
In some cases, such as copper, buying has been so great as to suggest unsustainable speculative interest. That doesn’t appear to be a factor in the improvement in uranium prices.
According to Scorer, a key difference separating the uranium market from other commodities is its relative immaturity. “You can’t really say there was a proper uranium market before the late Sixties,” says Scorer. “And since then the market has been dominated by large above ground stocks.”
These are the strategic inventories kept during the Cold War by both the US and the Soviet Union. During the Nineties the oversupply of uranium was exacerbated by the so-called “down blending” or Soviet weapons grade uranium into commercial fuel.
However, those stocks are being depleted and underinvestment in new sources of uranium has meant suppliers can’t respond quickly enough to a concurrent spike in demand for uranium.
It’s against this background that Nufcor International announced earlier this week that it had raised $123m by selling shares in a new company, Nufcor Uranium, on Britain's Alternative Investment Market.
Nufcor, which is jointly held by South African firms AngloGold Ashanti and Rand Merchant Bank, stocks and trades uranium as well as offering leasing and inventory management services. It also provides risk capital to projects in the nuclear fuels business, which adds an obvious further dimension to Nufcor.
“The uranium industry is currently woefully unprepared to cope with such a dramatic future demand increase,” said Sacha Borthwick, an analyst at British stockbroker HargreaveHale in a report in April.
There are also exogenous factors affecting the supply of uranium, including limitations on uranium mining licences, which are restricted in Australia. “We’ll see more commercial production from Australia,” says Scorer, even though permitting is a major issue. “But in the end there’s an environmental and commercial case to be made for uranium.”
However, native title issues, inflationary pressure on new mine economics, a shortage of skills and the relative dearth of economically sustainable large-scale mining operations are factors that come into play.
Amid depleting sources of fossil fuels, increasing environmental pressure on emissions and improvements in nuclear safety demand for nuclear reactors is outstripping supply. In addition, a 40% increase in the current tally of 441 reactors is expected with world electricity supply expected to double within the next 25 to 30 years.
Total world reactor uranium oxide requirements in 2004 was 172 million pounds compared to primary supply of 104 million pounds.
“Primary uranium supply is increasing – but not fast enough,” says Borthwick. “Lead times for new uranium mines are very long – sometimes more than 20 years – and there have been no new major uranium deposits discovered in the past two decades.”
Scorer agrees that uranium mines haven’t been ramped up quickly in the past, but adds there was no need to do so. “Under pressure you could find supply coming on quicker than expected.”
There’s wide variation in where the price of uranium oxide – the so-called “yellow cake’ that’s supplied for enrichment – will stabilise. Resource Capital Research suggests $50/lb by 2007, while HargreaveHale estimates an average price of $45/lb in 2007 and 2008, increasing to $50/lb in 2009, adding that its estimates are deliberately cons
New price: $53
Powerful argument for nuclear power stations
Michael Backman
September 20, 2006
Page 1 of 2 | Single page
IS URANIUM a good bet? If the evidence from Asia is anything to go by, the answer is yes. The economies of China and India are growing fast. Neither produce enough power for existing requirements.
The US Government's National Intelligence Council has estimated that India's energy consumption will at least double by 2020. China's will rise by 150 per cent. That heralds an environmental disaster.
Why? Because the power that both produce comes largely from the dirtiest, most harmful means: burning coal. The situation is unsustainable. Nuclear power is an obvious solution and, in a few decades, Asia could be home to at least half the world's nuclear reactors.
Coal burning accounts for about 70 per cent of the energy produced in China, compared with a global average of about 25 per cent. China wants to get this down to 60 per cent by 2020, but even if it is possible it will mean coal-generated power will dramatically increase in absolute terms.
As things stand, China uses more coal than the US, the European Union and Japan combined, and its coal consumption this year is up
14 per cent on last year. According to one report, a new coal-fired power station opens in China every seven to 10 days.
Not surprisingly, China has quickly become one of the most polluted countries. Air quality is abysmal. Official estimates are that 400,000 Chinese die each year from diseases related to air pollution. Separately, the World Bank says 16 of the world's 20 most polluted cities are in China.
Pollution levels in India are also rising but the problem is not as acute as in China. Nonetheless, India is stepping up its construction of coal-fired plants, meaning that its greenhouse gas emissions will accelerate. And given that India's population is expected to pass China's in 2030, that's a worrying trend.
Both are looking to generate more power from gas and hydro-electric schemes. But both sources will only slow the rate of growth of greenhouse gas emissions. And so nuclear energy is looking increasingly viable, and even desirable.
According to the World Nuclear Association, of the 442 operational reactors in the world, almost a quarter, or 109, are in Asia. Another 28 are under construction worldwide. Fifteen of these are in Asia. More are planned, so that in total, 285 nuclear reactors are either operational, under construction, planned or proposed for South and East Asia.
The most nuclear of Asia's economies are South Korea, Japan and Taiwan, which generate 45, 29 and 20 per cent respectively of their power from nuclear sources. China's nuclear power plants generate just 2 per cent and India's 2.8 per cent. This is when, worldwide, nuclear accounts for 16 per cent of all the power generated. There is room for growth.
A sign of things to come was the nuclear co-operation treaty between India and the US earlier this year. And the US Government's Export-Import Bank recently provided US company Westinghouse with $US5 billion in loan guarantees for bids to supply technology to build nuclear power plants in China's Guangdong and Zhejiang provinces.
Australia's agreement to sell uranium to China is instructive, as was the recent announcement that a representative of China's main nuclear power plant operator, the Chinese National Nuclear Corp, had joined the board of South Australia-based explorer UraniumSA, which is preparing to float on the stock exchange.
China plans a fivefold increase in its nuclear power capacity by 2020. It now has 10 operational nuclear reactors. With five more under construction, 13 more planned and a further 50 proposed, China expects to have at least 78 nuclear reactors in the future.
Assuming that each new plant will consume the same uranium as the average of the existing plants (in fact, the newer plants are likely to consume more), then
China's annual demand for uranium will rise to at least 10,093 tonnes, from the current 1294 tonnes.
That's almost a tenfold in
http://www.stockinterview.com/News/0...Bambrough.html
Russians Expecting $100/Pound Uranium
Sprott Market Strategist Believes New Reactor Inventory Could Take Price Higher
On Tuesday, September 19th UxC announced a new highest ever spot uranium price.
In a speech at the 50th annual regular session of the International Atomic Energy Agency (IAEA) General Conference in Vienna, IAEA chief Mohammed Elbaradei confirmed what many of us knew in praising China and Russia, which “currently have the most ambitious plans for short-term nuclear expansion.” Nine months ago, he might not have made that statement.
Today, Russia has emerged as one of the more vocal proponents for, and aggressive strategists in, the full spectrum of the nuclear fuel cycle. From nuclear waste disposal to uranium mining and enrichment, and in moving forward to construct nuclear reactors, Russia could possibly become an even more significant future player in the nuclear sector than China is envisioned. Russia’s civilian nuclear chief Sergei Kiriyenko told Russian television earlier this week, “Russia believes 25 percent of the world’s market in nuclear fuel-cycle services, including uranium enrichment, is an optimal share. Technically and technologically, we are well positioned for this.”
And whoever control this much market share should help decide the price. “The Russian people I’ve spoken with seem to think $100/pound is a given,” Sprott Asset Management Market Strategist Kevin Bambrough told us upon his return from the recent World Nuclear Association Conference in London. “If anyone is in the know, or can affect market psychology, it would be them.”
Last week, Tenex’s general director Vladimir Smirnov announced the formation of a new national uranium exploration and mining company, provisionally named "The Uranium Mining Company." He said it will be established by the end of this year, and hopes to boost production by tenfold over the next two years.
This week, Kiriyenko announced Russia’s “international” center to enrich uranium should be built by the end of this year, and ready to launch by early 2007. As announced earlier, the site will be in eastern Siberia at the Angarsk Electrolysis Chemical Plant. The city is located 3,000 miles east of Moscow. Russian President Putin suggested at the current IAEA conference that the international community set up enrichment centers under the supervision of the IAEA to prevent discrimination in access to nuclear energy. Putin’s veiled remarks were likely aimed at encouraging Iran’s civilian nuclear energy program, for which Russia is rebuilding the Bushehr nuclear power plant. Russia also proposes to joint venture another uranium enrichment center in Kazakhstan with that country.
In early September, Sergei Obozov, head of Rosenergoatom, Russia’s nuclear power monopoly, announced plans to start building nine nuclear reactors in 2007. But, it won’t stop there. According to an estimate calculated in September by the World Nuclear Association, Russia has 26 reactors proposed or planned by 2020. The country hopes to power 23 percent of its electricity with nuclear energy. This would give Russia nearly 60 reactors, almost as many as France and Japan presently have operational.
Russia is also revamping its nuclear industry, consolidating its civilian nuclear companies into one state-run company. It will be called Atomprom, and the country hopes to compete with other industry giants, such as AREVA, General Electric and Toshiba to build reactors.
This is where the business might get even more interesting. “Pairing of new reactors with uranium contracts could be huge,” Bambrough explained. “Companies wanting to build reactors are going around the world, wanting to joint ventures with mining companies to increase uranium supply for themselves. The reason they want to do that is to offer a full suite of services. They know they can not sell a reactor without supply.” Based upon how Russia’s nuclear ambitions are unfolding, this is their likely course of action. AREVA, which se
Speculators flock to uranium's glow
Metal's soaring price proves irresistible
JOHN PARTRIDGE
INVESTMENT REPORTER
A small but growing number of hedge funds and other bold investors are getting hungrier for one of the world's most potent metals: uranium.
Purchases of the nuclear fuel -- in solid or gaseous form -- by these decidedly non-traditional buyers are on pace to equal or exceed levels reached in 2005, according to figures provided to The Globe and Mail this week by Ux Consulting Co. LLC, a uranium industry research company in Roswell, Ga.
So far this year, the handful of funds that have caught the bug have purchased about eight million pounds of uranium on the spot market, according to Ux. This compares with about 8.75 million pounds for all of 2005, and perhaps an eighth of that in 2004, when investors started to buy the metal instead of just its producers' shares.
Adjusting for some sales, fund executives and industry analysts estimate that investors now have a total of about 16 million pounds sitting in licensed storage facilities.
The investors have been attracted into the field by the metal's soaring price, which is being driven higher by what is shaping up to be a revival of nuclear power and a large gap between demand and inadequate supply.
Uranium concentrate, or U308, is now fetching about $53 (U.S.) a pound, up from $36 in January and a 2001 low of just $7.
New production capacity for the metal is set to come on stream over the next few years, which is expected to bring prices down.
But some analysts have recently raised their forecasts of long-term uranium prices. Greg Barnes at TD Securities Inc., for instance, has hiked his forecast to $35 a pound from $30, and expects the metal to hit this level in 2015.
One reason is that Russia has said it does not plan to renew a 1993 pact with the United States under which about 20 million pounds of uranium a year has been extracted from decommissioned nuclear warheads and sold into the market when it expires in 2013.
Rising prices are good news for uranium miners, including Cameco Corp. of Saskatoon, the world's largest producer, and for the new mid-sized producer that will be created through the planned $511-million (Canadian) takeover of Denison Mines Inc. of Toronto by International Uranium Corp. of Vancouver, which was announced Monday.
Uranium prices did not join in the general commodity and equity plunge that took place in May and June.
In fact, the metal's price has not suffered a week-to-week drop since July, 2003, according to fund manager Robert Mitchell, who heads Adit Capital of Portland, Ore., and was one of the first investors to start buying physical uranium in 2004. "I'm not aware of any other commodity on the face of the Earth that has gone 168 consecutive weeks without a downtick," he said yesterday.
Mr. Mitchell said Adit now has three funds, with a total of about $200-million in assets under management among them, and he is contemplating a fourth. The first invests solely in uranium (mostly the metal but equities as well) while the other two invest in uranium and other energy-related metals that are not traded on any exchange.
As it is, with 16 million pounds of the metal currently salted away, investors control less than 10 per cent of the approximately 170 million pounds consumed each year by the nuclear power industry.
Among the new players in the game is Lido Park LLC, a secretive Delaware-registered firm, that last month paid more than $42-million to buy 300 tonnes of uranium hexafluoride gas (UF6) from the U.S. Department of Energy.
A DOE spokeswoman said she was not authorized to provide any information about Lido Park's identity. However, two sources familiar with the matter said the firm is a uranium investment vehicle set up by QVT Financial LP, a New York hedge fund. QVT did not respond to a request for comment.
Other existing players also are continuing to buy more.
Uranium Participation Corp. of Toronto, launched last year and managed by Denison Mines, plans to use the $1
New uranium lobby group emerges
Michael Vaughan
Tuesday, 26 September 2006
AUSTRALIA'S uranium industry has a new voice in its battle to sway public opinion and bring policy change under the banner of the newly created Australian Uranium Association (AUA), though other industry groups have expressed concern over the merits of another voice joining the fight.
The organisation will swallow Melbourne-based Uranium Information Centre and UIC chairman Harry Kenyon-Slaney will chair the new group. Michael Angwin, who was formerly director of economic policy in Victoria's Department of Premier and Cabinet, has been appointed AUA executive director.
"Our role is to help the uranium industry become part of the mainstream mining industry and to help the industry shape its own future," Angwin told MiningNews.net.
"We're still working to finalise the inaugural membership of the association but the members will be uranium exploration and mining and export companies."
Service and technology providers for the uranium industry will also be invited to become members.
In June, Greenpeace co-founder Dr Patrick Moore added his voice to the chorus of speakers in recent times who were urging Australia's uranium explorers and producers to present a united front in their advocacy of the industry.
Moore said it was crucial the industry implemented programs to access the mass media in order to shift public opinion and in turn, change state government policies banning uranium mining, such as those that exist in uranium-rich Western Australia and Queensland.
While the strategies of the AUA are yet to be finalised, Angwin said the industry would be trying to shape public opinion "based on research and facts" but he shied away from the term "publicity campaign" when describing the association's intentions.
"We as an association exist because there is an overwhelming opinion within our industry that we need to change the way we approach our own representation," he said.
"We need to have a united position on strategic issues, we need to advocate with credibility and vigour and we think that the current circumstances provide us with the best opportunity to do that and it's the best opportunity the industry has had for a very long time."
Association of Mining and Exploration Companies chief executive Justin Walawski told MiningNews.net that AMEC has concerns about the formation of the AUA and its lobbying could potentially detract from the advocacy work of AMEC and the Minerals Council of Australia.
"While we wish those involved every success, there are some concerns as to the need for yet another industry body, when the industry really needs a strong and consistent voice from a strong and consistent source," he said.
"From a potential member's perspective, there is a real question as to whether there is sufficient differentiation in the objectives of the new body and those that already exist.
"I've already had brief discussions with the MCA and, the only real point of difference between the AUA and the two existing national bodies (AMEC and the MCA) that I can discern at this stage is that the AUA's stated objectives include active promotion of nuclear energy.
"If the AUA's objectives do include promotion of nuclear power, then there are significant political challenges to overcome for the AUA and those that may consider becoming its members."
Angwin said while nuclear power was not economically viable in Australia, the AUA would not be endorsing the adoption of a nuclear industry. At the same time, the association would not shy away from downstream issues raised by its advocacy.
"The immediate issue is around the mining, exploration and export of uranium and we wouldn't want to get sidetracked by downstream activities and there are more immediate issues to be dealt with," he said.
"That's not to say that the issue of downstream activities is not going to be important in the future and we're certainly not going to not deal with the issues raised by downstream activities."
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Spot price: US$54.00
http://www.uxc.com/review/uxc_Prices.aspx