October 30, 2009

Queensland Government Called On To Lift Uranium Ban

AUSTRALIA'S uranium sector has renewed its attack on the Queensland government for continually rejecting mining yellowcake in the sunshine state.

Alan Eggers, the man who had built Queensland's most successful uranium explorer, Summit Resources, said the ban was irrational and illogical.

"It is a political ban that has no basis of science, health or safety or commercial or any other area," he said at yesterday's Brisbane mining conference.

"It is time Queensland and the public of Queensland woke up and got into this business, which is a very safe business to be in, which will create a lot of jobs and a lot of royalties and wealth and knowledge and technology for the state."

Toro Energy managing director Greg Hall told the conference the government's list of reasons for continuing its ban on uranium mining did not stand up.

The Queensland Labor government has continually said it has no plans to lift its ban on uranium mining.

"There have been multiple reasons why the Queensland government has decided that uranium mining is not suitable for this state," Mr Hall said.

"It started some time ago, with the government saying that it didn't want competition for coal and there was an expensive report done that proved that uranium was not competition for coal."

Mr Hall added that another concern was competition for funds during the global financial crisis, which he said had not been an issue as many uranium companies had recently raised capital.

"The people of Queensland have to rethink why is the government against uranium mining?" he said.

"Is it a throwback to old 1970s rhetoric or is it something that is genuinely there?"

In contrast, Western Australia is now full steam ahead with uranium activity after Premier Colin Barnett's Liberal Party lifted the ban on mining yellowcake last year.

South Australia, with BHP's massive Olympic Dam mine, and the Northern Territory, with ERA's Ranger mine, are both pro-uranium. Victoria and NSW have blanket bans on both exploring and mining


Geological Survey of Western Australia executive director Tim Griffin said the industry was excited when Mr Barnett lifted the uranium ban.

"There is a lot of new work going on in Western Australia on the exploration side, but more particularly in trying to get a mine up and running in the next fours years and the industry is confident it can do that," he said.

"The government is definitely supporting that target and (is) focused on trying to make the changes to allow that to happen."

October 29, 2009

Toro slams Queensland Government Over Uranium Mining Ban

TORO Energy has attacked the Queensland Government for its continued rejection of uranium mining in the sunshine state.

Managing director Greg Hall told the Brisbane Mining Conference today that the government’s list of reasons for continuing its ban on uranium mining didn’t stand up.

The Queensland Labor government has continually said it has no plans to lift its ban on uranium mining.

“There have been multiple reasons why the Queensland Government has decided that uranium mining is not suitable for this state,” he said.

“It started sometime ago, with the government saying that it didn’t want competition for coal and there was an expensive report done that proved that uranium was not competition for coal."

Mr Hall added that another concern was competition for funds during the global financial crisis, which he said had not been an issue as many uranium companies had recently raised capital.

“The people of Queensland have to rethink why is the government against uranium mining?” he said.

“Is it a throw back to old 1970s rhetoric or is it something that is genuinely there.”

Western Australia is now full steam ahead with uranium activity after Premier Colin Barnett’s Liberal party lifted the ban on mining the yellowcake last year.

South Australia, with BHP's massive Olympic Dam mine and the Northern Territory, with ERA's Ranger mine, are both pro-uranium states. Victoria and NSW have blanket bans on both exploring and mining uranium.

Geological survey of Western Australia executive director Tim Griffin said the industry got excited when Barnett won government and lifted the uranium ban.

“There is a lot of new work going on in Western Australia on the exploration side, but more particularly, in trying to get a mine up and running in the next fours years and the industry is confident it can do that,” he said.

“The government is definitely supporting that target and focussed on trying to make the changes to allow that to happen.”


Paladin Lowers Production Guidance

Paladin Energy has lowered its production guidance for 2009/10 as the ramp up of its two uranium mines in Namibia and Malawi was slower than anticipated.

In its production report released today, the miner said production reached 744,188 pounds of uranium in the September quarter for both the Langer Heinrich mine in Namibia and the Kayelekera operation in Malawi.

Despite the slight production increase on the previous quarter (727,716lbs), Paladin said both mines, separately, had not achieved production targets.

For Langer Heinrich, a number of interruptions from the Stage 2 expansion operation caused production to be lower than the previous quarter at 654,516lbs of uranium oxide.

Sales from Langer Heinrich reached $US38.8 million from the sale of 703,000lbs of uranium oxide at $US54.48 for each pound.

A slower than expected ramp-up in July and August hampered production at Kayelekera, which produced 89,672lbs for the quarter.

Paladin said the September month production results improved, and the upward trend should continue towards the anticipated nameplate production rates in the March 2010 quarter.

Paladin is aiming for a throughput rate of between 2.2mlbs and 2.6mlbs for Kayelekera.

"Langer Heinrich and Kayelekera continued ramp-up activities during the quarter and, although ramp up was slower than anticipated, results continue to trend positively," Paladin said.

"Overall, considerable progress has been made towards removing identified production bottlenecks and achieving nameplate production levels as evidenced by the recent Langer Heinrich production figures.

"Previous guidance forecasting annual production rates for Paladin had been based on a faster ramp up of production than has been realised to date.

"Significant progress has been made during the quarter and management is confident the main delays have been absorbed into this period."

Paladin added that as Kayelekera is a new mine, production is more difficult to forecast.

As a result of the slower than anticipated ramp-up, Paladin has forecast a production range of 5.6mlbs to 6.1mlbs, down from the previous guidance of 6.6mlbs.

October 27, 2009

TradeTech's Uranium Spot Hits US$50.00 P/Lb

TradeTech’s Uranium Spot Price Indicator rose $2.50 to $50.00 per pound U3O8. The spot uranium price jumped again this week on confirmation that BHP Billiton had notified some customers of force majeure on deliveries from its Olympic Dam mine. The force majeure was the result of a mechanical failure to the main haulage system that occurred on October 6.

The news prompted sellers to raise offer prices and three transactions were concluded at significantly higher prices than those concluded last week. Current buying interest is coming primarily from traders and financial entities. Most utility customers are under little pressure to purchase and are currently taking a “wait and see” approach.

Rossing South Uranium Deposit Heading For Over 500 Million Lbs


Australia's Extract Resources, in which Kalahari Minerals owns around 40%, has said that its exploration target for its massive Rossing South discovery is for an extra 185-285 million lbs U3O8 which would bring total resource to more than 500 million lbs.

Photo of Rio's Rossing Uranium Pit

Kalahari Minerals PLC (AIM: KAH) said Extract Resources Ltd (TSX, ASX: EXT), in which it holds 40.88 percent, has increased the exploration target for its Rossing South uranium deposit at the Husab project in Namibia to between 185 and 285 million additional pounds of U3O8.

Kalahari cited an Extract statement that gave the exploration target for areas of the Rossing South project not included in its current resource estimates. Earlier this month, Extract said it found a new high grade zone at Rossing South.

Extract said the Rossing South project at present has an indicated resource of 24 million pounds U3O8, an inferred resource of 243 million pounds U3O8 and the above mentioned 185-285 million pounds exploration target, all at a 100 parts per million U3O8 cut-off.

Exploration drilling to date at Rossing South has been completed over 8 kilometres of a 15 kilometre long target of covered (but potentially uranium bearing) stratigraphy between the licence boundary and the northern termination of the Ida Dome. Continued exploration and resource definition drilling between Salem and Zone 1 is a priority for Extract, it said.

Infill drilling at Rossing South is currently focused on Zone 1 and Zone 2 to upgrade the resource status with the aim of defining reserves for the ongoing feasibility study. Exploration drilling is also continuing south of Zone 2.

Extract has 11 drill rigs currently operating on site. Additional rigs will be sourced over the coming months to accelerate drilling progress. However, given the massive size of the mineralised system defined thus far, exploration efforts are expected to continue for some time, it said.

The estimate for the total resource stands in excess of 500 million pounds U3O8.

October 24, 2009

Cameco Starts Dewatering Cigar Lake Project Friday 23rd October 2009

An aerial view of the Cigar Lake mine, where efforts to plug a leak are ongoing
Birds Eye View

Uranium producer Cameco Corporation has resumed dewatering of the flooded Cigar Lake project, in Saskatchewan, but will only provide guidance on when production at the mine could begin once it has seen the conditions underground and adjusted its development plans accordingly.

The company has now sealed the inflow that opened up in August last year, and expects it will need between six and 12 months to fully dewater and secure the mine, depending on what conditions are like in the shaft and underground workings.

The inflow that began last summer on the 420 level has been remediated by remotely placing an inflatable seal between the shaft and the source of the inflow and subsequently backfilling and sealing the entire development behind the seal with concrete and grout.

The 420 level is not part of future mine plans, the company said.

“Cameco will provide an estimated production start date after the water has been pumped out of the mine, the condition of the underground development has been assessed, and the findings incorporated in the new mine development and production plans,” the company said.

The mine was expected to start production as early as 2008, before a rock fall caused a flood in October 2006, forcing the company to halt development.

Cameco only received approval to start dewatering the mine in June last year, after successfully testing an underground seal, and was approaching the bottom of shaft one when the mine flooded once again in August.

The company now has approval from the Canadian Nuclear Safety Commission (CNSC) to dewater and secure the underground areas and has applied for a licence amendment that would allow it to complete the remediation and mine construction.

The plans to dewater, re-enter, inspect and secure the mine were developed together with the CNSC and the Saskatchewan ministries of Environment and Advanced Education, Employment and Labour.

Cameco is the operator of the Cigar Lake project, and owns 50%, while Paris-based Areva holds 37%, Idemitsu Canada Resources owns 8% and Tepco Resources owns the remaining 5%.

The project contains proven and probable reserves of more than 226,3-million pounds of uranium oxide.

October 23, 2009

Uranium To Exceed $50 On Olympic Dam Slowdown, Macquarie Says

Great News For The Uranium Bulls

Uranium will rise above $50 a pound in coming weeks because of reduced production at BHP's Olympic Dam mine in Australia, Macquarie Bank Ltd. said.

Prices have added 9.8 percent over the past two weeks on concern about reduced supply following an accident at Olympic Dam, the world’s fourth-largest producing uranium mine. Uranium oxide concentrate for immediate delivery traded at $47.75 a pound on Oct. 19, Roswell, Georgia-based UxC said in a weekly report.

“Uranium will go up into the low $50s over the next month, Max Layton, an analyst at Macquarie in London, said by phone today.

Full production at Olympic Dam will only resume by the end of March after repairs to a damaged shaft, BHP, the world’s largest mining company, said on Oct. 20. The company declared force majeure that day on some supply contracts at the world’s largest uranium deposit, permitting it to miss deliveries because of an event beyond its control.

Olympic Dam, which produces copper and gold as well as uranium, accounted for 8 percent of global output of the nuclear fuel last year, according to the World Nuclear Association. The mine produced 3,384 metric tons of uranium last year, and the slowdown may cut output by about 1,200 tons through to March, Layton said.

“If the delay goes beyond the end of March and they have depleted all their inventories, they would probably need to be buying in the spot market,” he said.

A mechanical failure forced the shutdown of the main haulage shaft at Olympic Dam on Oct. 6. Ore hoisting will be at about 25 percent of capacity until repairs have been completed, BHP said on Oct. 20.

My Personal view... Is that we may well see a Spot Price exceeding US$80.00 P/Lb Before Years end.

October 21, 2009

Bullish Uptrend For Uranium Stocks - About To Begin

Update Wednesday 21st October 2009

UPDATE 2-BHP: Olympic Dam force majeure.

Full Output Not Expected Until .......... June - July 2010

Australia's BHP has declared force majeure on uranium and copper supplies from its stricken Olympic Dam mine on Wednesday, saying it did not expect to resume full output there until early next year.

BHP Billiton said the Australian operation, the world's fourth largest copper deposit and largest known uranium deposit, was running at only 25 percent of ore-haulage capacity after a runaway skip took its main shaft out of operation this month.

"We anticipate that ore-hoisting will be at approximately 25 percent of capacity until full production resumes in the third quarter of the 2010 financial year (July/June)," the company said in its first-quarter production report.

Uranium Spot Price Uptrend Alert

UxC's weekly spot price indicator has risen to US$47.75/lb. Its Mid-Term price indicator remains unchanged at US$55/lb.
Long Term Contract Pricing remained steady at US$65/lb.

Possibility This Could Be The Trigger To Send A Bullish Uptrend To Investors

TradeTech’s Uranium Spot Price Indicator is $47.50 per pound U3O8—up $2.00 from the October 9 value. The spot price continued to climb this week on the news that BHP Billiton’s Olympic Dam mine was shutdown following a mechanical failure to the main haulage system. BHP will provide an update of the situation on October 21. Until then, sellers are taking advantage of the momentum created as a result of the accident by raising offer prices.

Currently, all active demand can be characterized as discretionary in nature. While buyers are not “chasing” the price up, a number of parties are assessing the market and have concluded that purchases at current price levels are economical.

Six transactions were concluded this week; all at prices at, or very near, today’s Spot Price Indicator. Buyers included utilities, traders, investors, and financial entities. Offers are due next week to a non-US utility seeking 300 thousand pounds U3O8.

Uranium stocks surge on mine shutdown

Australian report says BHP Billiton has declared force majeure on deliveries from Olympic Dam following shaft accident Update To Be Announced On Wednesday October 21 2009





Click Image To Access

October 20, 2009

Oil Heading To US$95.00 Per Barrel


Energy Outlook - Oil Prices Keep on Chugging

Commodities to Watch - Gold, Copper

Today's Gold Prices Are Still 53% Below The 1980's Peak





October 19, 2009

No Nukes Please, We're Kiwis


OPINION: For a while there, enthusiasm for building nuclear power stations waned. The Chernobyl disaster, the Three Mile Island scare, problems with radioactive waste and cost overruns turned the populace against nuclear power. A few were shut down or put into mothballs.

But have nuclear reactors got any future? Aren't they being shut down everywhere? Well, no. With global warming, nuclear reactors are back in spades.

About 440 nuclear power plants are now working round the world. They churn out about 17 per cent of the world's electricity.

The United States leads the way with 93 nuclear power plants, then France with 59, Japan with 52, Britain with 15 and Spain with 10. Even Cuba, Chile, Argentina, Pakistan, Mexico and the Philippines have nuclear power plants.

Eighty per cent of France's electricity is nuclear-generated, 78 per cent of Lithuania's, 53 per cent of Slovakia's and 43 per cent of Hungary's.

Fifty more nuclear power plants are being built at present and another 300 are in the pipeline.

Most of the growth is in Asia and Eastern Europe. Twenty-two new reactors are being built in China and they plan to complete one a year for the next 20 years.

They are also being built in Brazil, Argentina, Romania and Slovakia. Japan and South Korea have plans or have placed orders for 15 and 12 new reactors. Poland, Estonia and Latvia are setting up a joint nuclear electricity project with Lithuania.

Vietnam, Indonesia, the Philippines, Slovenia, the Czech Republic, Turkey and Thailand have new reactors on the drawing board and France plans to replace 40 of its older nuclear power stations.

Under heavy pressure from environmentalists, a few German, Canadian and US reactors were shut down or mothballed recently but, with the renaissance in nuclear power, their governments have decided to refurbish and restart many of these plants.

Sweden has abandoned plans to decommission its nuclear plants and is now investing heavily in upgrading them. In the US, there have been 17 applications to the Nuclear Regulatory Commission for joint construction and operating licences for about 25 new nuclear power reactors.

Most of today's nuclear power comes from Generation 2 reactors but scientists and engineers are developing Generation 3 and Generation 4 reactors. These promise huge improvements on the older ones. In the event of an earthquake, a terrorist attack or staff falling asleep, they will quietly switch themselves off and cool down. No more meltdowns.

The new plants will get 99 per cent of the energy from uranium instead of the 1 per cent they get from current machines, and Generation 4 reactors will make no nuclear waste. They emit hydrogen as a waste product.

Asian countries once bought their nuclear plants from the West but these days Chinese and Japanese engineers design, build and export their own nuclear reactors. The Chinese are mass-producing their "pebble" reactors from modular parts.

In the unlikely event of New Zealand ever installing a nuclear power plant, we'd probably buy one from China. It would be cheaper.

October 16, 2009

Nuclear Energy Market – China

The Changing Geopolitics of the Nuclear Energy Market – China

The Epicenter of Nuclear Growth

China Reactor Forecast The Ux Consulting Company (UxC) has released a new report on China as part of its series on The Changing Geopolitics of the Nuclear Energy Market. At 150+ pages, this report provides a comprehensive overview of China’s current and prospective nuclear power program and industry, and the role of nuclear in China’s total energy supply.

No country in the world comes close to matching China’s plans for nuclear power expansion. China’s latest official target of reaching 5% of total electricity from nuclear plants by 2020 means that around 78 gigawatts-electric (GWe) of new nuclear capacity should be built over the coming decade. In fact, given current trends, China is on track to potentially becoming the world’s largest user of nuclear power by the year 2030. China’s tremendous new reactor numbers speak for themselves:

  • 11 reactors in operation (8,602 MWe)
  • 16 reactors under construction today for a total of 15 GWe in new capacity
  • 250+ planned new reactors
  • 70+ identified reactor sites
  • 5 main owner/operating companies and 32 secondary owners identified

Like others in our Geopolitical Series, this report aims to separate the hype from reality and get down to answering serious questions, including:

  • How much nuclear capacity and when will they build?
  • What technologies will they choose?
  • Which companies will be involved?
  • What are the factors helping and/or hindering in their development?
  • Where will they get the fuel to power their reactors?
  • What impact will their growth in nuclear power have on other countries in the region or the world?

Comprehensive Coverage

UxC has carefully sifted through all the available information on China’s nuclear power activities in order to produce the most fact-based, credible estimates for the country’s nuclear power expansion. We assess the economic and energy drivers pushing the nuclear program forward as well as the various challenges facing this accelerated program. In presenting China’s nuclear power prospects, the report examines all the nuclear plant projects, reactor designs, operating companies, suppliers, and investors involved as well as crucial international partnerships supporting the country’s long-term nuclear power objectives.

The report identifies all major details of China’s reactor program, including current reactors, those under construction, and plans for new units. UxC presents its proprietary forecasts for high, base, and low case nuclear power growth scenarios through 2030, examining the potential outcomes for China’s future. These scenarios are also used to present China’s likely requirements for uranium, conversion, enrichment, and fuel fabrication through 2030 as well as its reactor market size.

The report also looks at China’s nuclear fuel cycle program, including uranium production, conversion and enrichment plants all the way through the back end of the fuel cycle.

UxC’s Changing Geopolitics of the Nuclear Energy Market - China special report is available for immediate purchase. The standard price for this report is US$4,500.00 payable upon receipt of invoice by check, credit card, or wire transfer. Discounts are available for existing customers of UxC’s Market Outlook report products and a special discount is available to UxC Policy Watch subscribers.

October 15, 2009

Energy Resources Says 2009 Uranium Output May Be Flat

Oct. 14 (Bloomberg) -- Energy Resources of Australia Ltd., producer of about a 10th of the world’s mined uranium, said it expects 2009 output will be similar to the previous two years.

Third-quarter production increased 4 percent to 1,405 metric tons, or 3.1 million pounds, from 1,349 tons a year earlier, the Darwin-based company said in a statement today.

This was broadly in line with our expectations, David Paterson, general manager of communications and external relations, said by phone today from Darwin. We had some reduction in mining activity. At the same time, we had a positive performance in terms of ore milled.

The company, controlled by Rio Tinto Group, is expanding its Ranger mine in Northern Territory as it expects rising demand from power utilities. Energy Resources has climbed 40 percent in Sydney in 2009, compared with a gain of 30 percent for the S&P/ASX 200 Index.

“The world is entering a carbon-constrained period,” and Energy Resources expects strong long-term demand for uranium, Paterson said.

The company was trading at A$26.57 in Sydney, up 1.4 percent at 3:03 p.m. The S&P/ASX 200 Index was up 0.9 percent.

Energy Resources had production of 5,339 tons in 2008 and 5,412 tons in 2007, according to its Web site. The company expects 2009 output “in line” with those results, Paterson said.

‘Intermittent Interruptions’

The amount of material mined declined 12 percent in the quarter from the third quarter of 2008. Energy Resources cited “intermittent interruptions to operations to allow increased surveillance” of an area of instability on Ranger’s southern wall. “This is not expected to impact on uranium oxide production in 2009,” it said.

The company approved spending of A$37 million ($34 million) to study the development of its proposed “heap leach” facility, a process expected to continue through next year. Energy Resources said a draft of an environmental impact statement would be submitted by early next year to the Northern Territory government.



October 14, 2009

Nuclear Energy Key To Future

More than 50 years ago, Australia was set to become the first nation south of the equator to build and operate a nuclear power plant to generate electricity.

About 60 countries are preparing for the Copenhagen climate conference next December equipped with a unique measure of economic assurance and environmental confidence. These are the developed and developing nations that have embraced greenhouse friendly nuclear power as a significant part of their present and future energy policies. By so doing, they will have ensured low-cost and reliable energy security for their industries and private consumers. As well, they will be operating cost-effective emissions trading schemes and laughing all the way to a potential international "carbon bank". The world is bemused that Australia is not in this group.

More than 50 years ago, Australia was set to become the first nation south of the equator to build and operate a nuclear power plant to generate electricity. Sadly, this project and many other planned ventures connected with the technology and commercialisation of the global nuclear industry have not gone ahead. This incredible neglect has been largely due to poor education, the pressures of Australia's hydrocarbon lobby, the pseudo-science of the "renewables" special interest groups and the politics of fear and risk beloved by Australia's "radical greens".

On April 18, 1958, prime minister Robert Menzies opened the Australian Atomic Energy Commission's (AAEC) Research Laboratories at Lucas Heights near Sydney. He challenged the nation to "enter the nuclear age". His vision was shared by Sir Philip Baxter, the first vice-chancellor of the University of NSW and the first chairman of the AAEC. In 1964, Australia's first and only school of nuclear engineering was established at the University of NSW.

For three decades the staff of the school at Kensington and the nuclear engineering division of the AAEC at Lucas Heights were in the forefront of global nuclear research. The university group taught hundreds of Australian and overseas students and published peer-reviewed and internationally acclaimed technical papers, books and theses. In 1982 these included the role of nuclear power in averting global warming and its great importance to Australia to produce electrical energy, potable water and hydrogen.

In 1988, the mandate for civilian nuclear power development was withdrawn from the AAEC and the school of nuclear engineering was closed. This happened even though its staff had played a key role in developing Australia's superb uranium mining industry from the Ranger Uranium Inquiry (1976,) through to development of Olympic Dam and the Northern Territory and Queensland uranium resources.

A secure, clean and cheap energy future for Australia in which nuclear power plays a pivotal role is a categorical imperative. Uranium should be recognised in the Rudd Government's carbon pollution reduction scheme bill as the most valuable and cost-effective form of "carbon offset". And a national energy policy embracing the nuclear fuel cycle deserves bipartisan support. However, locking into a national emissions trading scheme before the international cap- and-trade insights that might be gained at Copenhagen is foolish. It could become a non-productive exercise irrespective of the econometric models used.

Professor Ross Garnaut's final report - released at the end of September 2008 - concedes that nuclear power could supply more than one-quarter of Australia's electricity needs by 2020 if a proposed policy based on "clean coal" and "renewables" fails. But he questions the technology on economic grounds and restates his earlier convictions that Australia is "not the logical first home of a new nuclear capacity". This is one of the many areas in which he and the Rudd Government are at odds with expert world opinion.

Recent data from the US Department of Energy underlines the huge advantages of uranium. The carbon production from coal-fired plants in the US was cited as 0.86 tonnes for one megawatt-hour of electricity production. The figure for gas-fired plants was 0.36 tonnes while that for nuclear plants was 0.005 tonnes. And the outstanding performance of the 104 nuclear power stations in the US during 2008 included a 98 per cent capacity factor and an unmatchable generating cost of 1.68 cents per kilowatt hour. No wonder regulatory processes are well in place for another 25 nuclear plants.

In April this year, Sydney hosted the World Nuclear Fuel Cycle Conference. The Chinese delegation was led by the president of China Nuclear Energy Industry, Dr Chen Xinyang. China has an amazing energy and carbon reduction policy based largely on nuclear power. Eleven nuclear plants are already in operation. It is planned to have possibly 100 plants by 2030. China is developing an energy policy based on gradual replacement of its immensely polluting coal-fired plants with nuclear. At the same time it is ensuring its energy security with Australian uranium.

The Australian Government should heed the advice given at the December 2007 Bali climate conference.

Yvo de Boer, executive secretary of the UN framework convention on climate change, said: ''I have never seen a credible scenario for reducing emissions that did not include nuclear energy."

Australia's 15 uranium trading partners - including the world's "greatest polluters" China and the US - have already embraced nuclear energy and should be an example to follow for all Copenhagen delegates.

Professor Leslie Kemeny is Australian foundation member of the International Nuclear Energy Academy.

Source: The Age

October 13, 2009

More Uranium Mines Needed As Nuclear Grows ...... 10 September 2009


Nuclear energy's fuel supply infrastructure should be able to meet world demand in the short term, but expansion will be needed across the entire fuel cycle beyond 2020, warns the latest WNA market report.

The newly released report, The Global Nuclear Fuel Market Supply and Demand 2009-2030, is the fifteenth in a series which started in the mid-1970s. Produced by a drafting group drawn from member companies of the World Nuclear Association (WNA), the report is based on the knowledge and opinion of the whole industry. The report uses information gathered via questionnaires from WNA members representing all aspects of the fuel cycle across the globe. A computer model is then used to forecast nuclear fuel supply and demand to 2030.

Western world supply and demand (Image: WNA)
Western world uranium production (coloured bands) and reactor requirements (red line), 1946-2008 (Image: WNA)

Of the three scenarios presented for world nuclear capacity up to 2030, only the lower scenario sees nuclear generation failing to increase above its 2008 level of 371 GWe. The reference scenario sees an overall 2.2% growth rate reaching 476 GWe by 2020 and 600 GWe by 2030, while the upper scenario sees 558 GWe by 2020 and 818 GWe by 2030. Both reference and upper scenarios are higher than in the 2007 edition of the report, reflecting the emergence of India and China as major nuclear nations.

In a new departure, the latest version of the report produces its three scenarios for nuclear generation to 2030 by country (as opposed to by region), and takes a closer look than ever before at the separate fuel cycle steps of enrichment, conversion and fuel fabrication.

Supplying the demand

Production of uranium from mines - primary production - has been far below the amount required to fuel the western world's power reactors since the mid-1908s, with so-called secondary supplies - inventories, stockpile drawdowns and use of recycled materials including uranium from decommissioned nuclear weapons - making up the shortfall. However, although secondary supplies will continue to play an important part, the report warns that the period of primary supply being so far below annual reactor requirements will have to come to an end with a substantial need for new primary production facilities in the longer term. "Uranium production needs to increase dramatically from its current level," Cameco's Penny Buye, co-chair of the drafting group, told the Symposium. The market must ensure that conditions be conducive for this to happen, she added.

The need for long term expansion to support reactor requirements also extends to fuel cycle services. Although conversion, enrichment and fuel fabrication capacities appear to be sufficient to cope with demand up to 2020, new investment will be needed to meet demand under the upper and reference scenarios in the longer term.

New uranium mines take many years to plan and license before they start production. The same is true, to some extent, for new conversion, enrichment and fuel fabrication facilities, the report notes. Heavy reliance on secondary sources of uranium supply over recent years has resulted, the report notes, in the industry's supply infrastructure becoming somewhat neglected, and also potentially vulnerable to supply disruptions. "This damage must be repaired over the next period", the report concludes.

October 9, 2009

BHP, & Canada's Mega Uranium Heat Up In WA Uranium Battle

Friday 9th October-2009

The race to establish the state's first uranium mine is heating up with Canada's Mega Uranium planning a $53 million capital raising for the Lake Maitland project while BHP Billiton's Yeelirrie operation received a setback.

In what is increasingly becoming a race to establish Western Australia's first mine, current front runner Mega revealed plans to raise $C50 million ($A52.5 million) through a public and private placement to North American investors.

Funds raised will be predominately used to complete feasibility studies on the Lake Maitland uranium project in the eastern Goldfields, which could be in production as early as 2011.

The uranium project is a joint venture with the Japan Australian Uranium Resources Development Co and ITOCHU Corporation.

Funds will also be used for Mega's other Australian assets and for working capital.

Meantime, Environment Minister Donna Faragher today extended the public consultation period by a month.

The mining giant has proposed an open-cut uranium mine, a processing plant and associated infrastructure, with the uranium oxide concentrate to be exported either through South Australia or the Northern Territory.

BHP has previously said that it could have the operation up and running by the end of 2014.

Mrs Faragher today said the project will be assessed at the level of Environmental Review and Management Program, the highest level of assessment for a project.

The minister also extended the public consultation period from the recommended 10 weeks to 14, after taking into consideration the nine appeals that were submitted.

"Appellants submitted that the level of assessment set for this proposal should be set at a public inquiry," Mrs Faragher said.

"A public inquiry is not a level of assessment and the level for this proposal will remain at ERMP, as it is the highest level available."

Mrs Faragher said appeals received had submitted that a public inquiry would be needed to cover issues dealing with environmental, indigenous heritage and other broader matters.

"However, whether the assessment is through an ERMP or public inquiry under the Act - it can only consider environmental matters relevant to the assessment of the proposal - rather than broader issues," she said.

"I have, however, considered the issues raised in the appeals and believe there is merit in extending the public consultation period.

"In particular, I acknowledge the challenges faced by community groups in regional and remote areas participating in consultation processes."

Another company vying to become WA's first uranium producer is Adelaide-based Toro Energy, with its Wiluna project where feasibility studies are currently underway.

Toro has previously said it could have Wiluna up and running in 2012.

October 7, 2009

Incident At BHP's Olympic Dam Could Impact Uranium Spot Prices

BHP Billiton's Olympic Dam malfunction

October 7, 2009 - 5:49PM

BHP Billiton Ltd and the South Australian government are investigating a major malfunction of the automatic ore haulage system at the mining giant's Olympic Dam operation.

BHP Billiton was unable to say whether the incident would harm production at Olympic Dam, which is a major producer of copper, uranium and other metals.

Nobody was injured when the automatic haulage system, which carries ore from underground to surface processing facilities, collapsed at (2300 AEDT) on Tuesday.

A secondary haulage system continues to operate at the mine.

"The safety of our workforce will take priority in determining any restart of haulage operations," BHP Billiton said on Wednesday.

In 2008/09 Olympic Dam produced about 194,000 tonnes of copper cathode, 4,000 tonnes of uranium oxide, 108,000 ounces of gold and 938,000 ounces of silver.

Commentators on Wednesday were cautious about whether the incident at the mine, which produces between eight and nine per cent of the mined uranium globally, could affect the commodity's price.

"It will have an impact on ore production, therefore copper and uranium production," RBS Morgans resources analyst Warren Edney said.

"It is possible it could affect uranium prices," Mr Edney said.

"It (Olympic Dam) represents about one per cent of global copper production on an annual basis, I don't think it will have an impact on the copper price," Mr Edney said.

A spokesman for SafeWork SA said the organisation was sending investigators to the site to examine the haulage failure.

"The haulage system of ore to the surface has had a major malfunction apparently and (caused) fairly substantial damage as it has collapsed," he said.

"Where serious damage has occurred it is notifiable, so the company contacted us as they should."

BHP Billiton said the company was making a full investigation into the incident to determine the cause of the failure and extent of the damage.


October 6, 2009

Uranium Remains Undervalued


The short-term uranium spot price has fallen $2.50 to $42 per pound U308 continuing its three month downtrend. The biggest factor affecting recent cuts is fear in the market over the US Department of Energy's (DOE) release of 1,200 tonnes of UF6 into the market next month.

However, some analysts point out that although these fears are influencing the short-term price, long-term prices have not been affected because strong fundamentals in the uranium market as a whole remain in place. Both Ux and TradeTech's longer term price benchmark is still at $65 per pound.

The stockpiles DOE might bring to market would probably only account for barely 2 perc ent or less of annual uranium supply and won't make much of an impact on longer term supply and demand, says Dundee Securities analyst David Talbot.

Market analysts at The Royal Bank of Scotland (RBS) recently forecasted uranium prices regaining strength soon and expect this trend to continue through 2011 peaking at $95 per pound with supply tightening as the Megatons to Megawatts program comes to an end in 2013.

Ray Goldie, senior analyst at Salman Partners, has projected uranium reaching a high of $150 per pound over the long term.

While supply factors are what have impacted spot prices as of late, it's the demand side of the equation to which investors should pay more attention. Talbot and Dundee Securities see demand rising around 2.2 per cent each year and expect demand to surpass supply within the next decade as new mines take years to come on line.

RBS expects "a deficit market" as early as 2014 along with rising nuclear energy usage around the globe. As it stands now, current supplies are not consistent with "logistical, statutory and operating bottlenecks" in producing countries like Canada, Namibia and Australia, say analysts.

A look at major uranium players' share prices this year indicates that there are investors who believe rising global nuclear power demand will make uranium a hot commodity again. Bloomberg reports that Paladin Energy [TSX: PDN] and Energy Resources of Australia [ASX: ERA] shares have climbed 84 per cent and 36 per cent respectively.

Uranium Mining in Western Australia

Western Australia (WA), according to the Liberal Barnett government, is "leading Australia through the financial gloom" as the state garners a 19 per cent increase in its minerals and petroleum exports in the year to June, reports The Australian.

Reg Howard-Smith, Chief of WA State Chamber of Minerals and Energy, expects a great increase in royalties to the state and as much as 30,000 new jobs by 2014 with new and advancing natural gas, iron ore, gold and uranium projects.

Robust investment is behind the recent growth in WA's mining industry, says Mines Minister Norman Moore. New capital expenditures totaled $22.8 billion, up 34 per cent from last year.

The Australian Bureau of Statistics reports that uranium exploration spending alone was up 77 per cent for the year. Premier Colin Barnett has said the uranium mining industry may possibly be WA's most important new sector, reported The Australian.

Last year, the newly elected Liberal government lifted Western Australia's uranium mining ban, sparking a race between uranium miners like Toro Energy [ASX: TOE] and Mega Uranium [TSX: MGA] to open the first uranium mine in WA.

Latest reports put Mega Uranium in the lead. While Toro hopes to have its Lake Way/Centipede project near Wiluna in production in 2012, Mega's Lake Maitland project, also near Wiluna, is anticipated to come on-line in 2011.

This month, Mega received approval from the WA government on its mining lease for the project.

Peter McNally, executive vice-president of project development, says the Lake Maitland deposit holds an estimated 12,000 tonnes, a number which is anticipated to grow.

"From recent exploration work, Mega increased the resource in the vicinity of 15 per cent, which is quite significant, and we're continuing to explore to the south," said McNally. "We expect to find more."

A small uranium processing plant is in advanced stages of the design phase and is expected to export around 750 tonnes a year beginning in 2012. The project is a joint-venture with the Japan Australia Uranium Resources Development (JAURD) and Itochu Corp. The Australian reports that over its 10 to 12 year life span the Lake Maitland has the capacity to export $3 billion of uranium.

VISIT MY tturaniuminvest HOMESITE

October 1, 2009

Montrose County Commissioners Approves Naturita Uranium Mill At Colorado's Paradox Valley

Pointing to reasons including the desire to increase the nation’s energy options, the Montrose County Commission on Wednesday unanimously approved a proposed uranium mill in the Paradox Valley 12 miles west of Naturita.

The controversial project would be the first of its kind to be built in the United States in 25 YearsAlign Centeryears, says Energy Fuels Inc., the company behind it. It next goes to the Colorado Department of Public Health and Environment for its review, county Commissioner Gary Ellis said in an interview.

Commissioners attached 19 conditions to their approval of the project and reserved the right to impose more after the county receives the results of a planned environmental assessment, Ellis said.

He said the mill would be located close to uranium mines, provide an economic benefit to the county’s west side and help meet the nation’s energy needs.

“One of my concerns was energy independence on the part of our country,” Ellis said.

Project opponent Michael Saftler of Telluride voiced disappointment in Wednesday’s vote and took issue with the idea that nuclear energy, and the mills required to provide it, can be part of a clean energy future for the United States.

“It’s not appropriate to put it in the context of clean energy, because it’s not clean energy,” Saftler said.

He said the entire process of generating nuclear power, beginning with getting uranium ore out of the ground, is so potentially hazardous “that the end effect is anything but clean.”

The mill proposal has attracted hundreds of people to county planning and commissioner meetings over the last several months. Some said it would provide needed jobs in the region, while others objected to it based on public safety and environmental concerns.

Ellis said he’s confident the state health department review will result in monitoring, dust mitigation and other measures to help ensure the project’s safety. But Saftler doesn’t think the state has a strong regulatory stance on uranium mills.

“I’m not sure how the health and welfare of the county, much less the actual inhabitants of Paradox Valley, are being served by the decision (county commissioners) made,” he said.

A recent report by a Naturita-based group, the Western Small Miners Association, estimated the mill would result in 623 direct jobs and 766 indirect ones. It said increased direct employment would include 85 mill site personnel and 282 mining personnel, along with transportation workers, managers and professionals, and others.

Colorado's Paradox Valley, in Montrose County

Click Image To Access Energy Fuels Home Site