May 21, 2011

Uranium Stocks A Bargain Now

Published on Saturday May 21 2011 (AEST)

The markets reacted with a sharp decline in uranium stocks. Orders were immediately put on hold and mining operations paused as the industry waited to see just what would happen. For investors who were already into uranium, their equities took a hit. However, for those looking to get into the mining industry, the opportunity for bargain shopping is everywhere.

When the devastating tsumani crashed into the Fukushima nuclear plant, world-wide fears of a meltdown, another Chernobyl, caused a panic reaction to shut down nuclear power plants and “rethink” nuclear power strategies in developed countries. 

President Obama ordered an evaluation of the US nuclear facilities, most of which were build 40 to 50 years ago. German Chancellor Angela Merkel shut down a number of plants and voice the same concern over nuclear safety. As the uranium rods in Fukushima over-heated and leaked radiation into the Pacific Ocean, fear of a nuclear apocalypse created the typical knee-jerk.

The fact of the matter is that even if uranium production slows as nations figure out their nuclear policies, there really is no other alternative at the moment to supply the world’s power demand. Older forms of energy production like coal and petroleum are not viable alternatives from an environmental impact perspective and quite simply, the world does not have enough coal or petroleum to supply the power. 

Wind technology is the best option but there is just not enough of it. Hydro or other naturally generated power does have a negative environmental impact and again, is in too short a supply. For example, British Columbia is a supplier of hydro power yet the government of BC imports power because much of the home grown voltage is sold to California.

There is really no other option for power in the near future, therefore, nuclear facilities will be turned on and uranium will be in demand. The bargain buy right now may be a chance to cash in.

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