October 31, 2011

Australian Labor Party Discriminatory Ban On Uranium Exports To India Has Little Australian Support

Published on Monday October 31 2011 (AEST)

The labor party are so hated by the vast majority of the Australian people that the opposition party the liberals are virtual certainties to win the next Australian federal election.

At that time India will again be restored to its rightful place in the eyes of the Australian people and uranium exports will go ahead.

New Delhi can relax, the Australian media is doing its lobbying for it - especially on the uranium front. Slamming Prime Minister Julia Gillard's foreign policy as "obsolete and discredited", a writer in The Australian has contended that it is prejudicing Australia's ties with India, the emerging third-biggest economy in the world.

"That the ALP (Australian Labor Party) ... should continue to impair Australia's economic and strategic interests is intolerable. If this situation continues uncorrected at the December national conference then Gillard should be held to account for allowing Labor's atiquated obsessions about uranium and nuclear power to prevent Australia from following an India policy that its ministers know is desirable and inevitable," wrote Paul Kelly, the paper's editor-at-large.

Kelly quoted Rory Medcalf of the Lowy Institute, a think tank, as saying: "A decision to stick with the old policy (of not selling uranium to India) will convince India's political elite that Labor is never going to be a natural partner for a rising India."

Kelly wrote: "Consider the facts. Australia exports uranium yellowcake to China, Japan, South Korea, the US, Taiwan and several European countries... (Hence) there is no justification, strategic or economic, for the ban (on selling to India)."

The ban was imposed by the Kevin Rudd government in 2008, reversing an earlier decision by the previous Howard government.

The Australian media sees Prime Minister Manmohan Singh's absence at the ongoing Commonwealth heads of Government Meeting (CHOGM) as a clear snub to Australia over its no-uranium-for-India policy.

Kelly quoted Labor Senator Stephen Loosley, described as a foreign affairs specialist, as saying: "The Indians have sent a clear and unambiguous message at Perth. They regard this issue as important to them."

He again quoted Medcalf to say that "New Delhi does not immediately need our uranium but responds to Labor's ban with 'frustration and bafflement'. The situation is so bad that Australia, in Medcalf's words, 'refuses even to talk' to India about uranium exports."

In another piece, titled 'Empty chair at CHOGM shows India policy hurdle', Greg Sheridan, The Australian's foreign editor wrote: "...We only need to look to India, as the world's most populous democracy, to realize that for all the fashionable dogma about colonialism, the spread of democratic institutions has been beneficial for people in countries where they have been properly administered.

"Despite enormous challenges, India continues to lift millions of people out of poverty as it modernizes its economy and asserts itself as an international power. Just as India represents the greatest weight of the Commonwealth, and perhaps the strongest manifestation of its ideals, so the absence of its Prime Minister, Manmohan Singh, from Perth delivers the sharpest blow to CHOGM."

He went on to add: "If this summit is to affirm its relevance it must attract engagement from India. Julia Gilard will be privately disappointed at this snub, which cannot be divorced from the pallid state of Australia's broader relationship. Over many decades Australia did not place sufficient emphasis on this relationship. John Howard belatedly recognized this and, after his second visit, in 2006, sought to elevate the bond.

"One important initiative in this process was agreeing to export uranium to India. On coming to power, Kevin Rudd also saw the potential and visited New Delhi. But Labor overturned the export decision because India is not a signatory to the Nuclear Non-Proliferation Treaty. This, together with attacks in Melbourne on Indian students, soured the relationship. The figuratively empty chair in Perth (India has sent its vice-president) emphasizes the urgent need to repair this relationship. Ms Gillard should endorse former South Australia premier Mike Rann's call to change Labor policy on uranium exports."

Noting that "India is a responsible nuclear power and vibrant democracy facing massive energy needs", he said: "The move will help achieve the aim of minimizing global carbon emissions, aside from the benefits in boosting our trade and strategic relationship. Bonding with India should be a top foreign policy priority and should not be held hostage to the Labor Party's feel-good anti-uranium symbolism."

The last Indian prime minister to visit Australia, the media noted, was prime minister Rajiv Gandhi in 1986.

Though media reports say that Vice President Hamid Ansari, who is leading the Indian delegation to CHOGM in Manmohan Singh's absence, will take up the matter of uranium exports in his meeting with Gillard on Sunday, officials say this is not likely.

Indian High Commissioner Sujata Singh told reporters here that "Australia has a stated position on uranium exports... and we will not bring up the matter till that position changes".

October 28, 2011

Cotter Plans To Reopen Uranium Mill Near Cañon City

Published on Friday October 28 2011 (AEST)
Cotter Corp.'s uranium mill near Cañon City plans to restart operations using ore shipped in from New Mexico, according to a letter filed with the state.

But Gov. John Hickenlooper said a bill passed by the state legislature last year likely prohibits Cotter from beginning a new project until it cleans up contamination left by Cold War-era uranium processing.

Additionally, Hickenlooper said he will dispatch his chief of staff, Roxane White, to the Cotter Mill next month to evaluate cleanup efforts at the site declared a Superfund environmental disaster in 1984.

"This is very important to the people down there," he said. "I'm definitely looking at it, and Roxane is looking at it, so we can understand it in some detail and assure ourselves that there isn't risk to human health or the environment."

The Denver Post reported Sunday that state and independent reports over a 30-year period showed Cotter's two tailing ponds south of Cañon City are leaking. Additionally, a state engineer found in 2004 that the ponds were "unusable" for hazardous-waste disposal. Even so, the state — in charge of supervising the cleanup — is sticking to a plan developed in 1969 to keep the waste there permanently.

Cotter Mill manager John Hamrick​ did not return phone calls.

Cotter is currently demolishing its buildings and disposing of the debris in one of the leaking tailing ponds. In a June 24 letter, Cotter said it intended to "maintain its Radioactive Materials License for the purpose of processing Mount Taylor ore."

For the company to reopen, Hickenlooper said, it would have to obtain a new license, which would require a "very public process with a lot of public input."

Cotter's proposal appears to contradict plans made by Rio Grande Resources Corp., owner of the Mount Taylor Mine west of Albuquerque. Cotter and Rio Grande are owned by San Diego-based General Atomics​.

Rio Grande told the U.S. Nuclear Regulatory Commission in 2008 it intended to mill uranium not at Cotter but at a planned mill near the New Mexico mine, records show. The company did not return a call and e-mail from The Post.

Western Mining Action Project attorney Jeff Parsons said he believes Cotter is trying to drag out final shutdown of the mill to avoid what are expected to be detailed reviews of the cleanup. Because the mill is a Superfund site, the EPA must sign off on final plans.

"This is Cotter's way of trying to push off the serious work, and the state is enabling them by not looking into the claim about Mount Taylor," said Parsons, who is representing residents suing to force Cotter to post a larger bond to guarantee cleanup of land and water near the mill.

Although the mill and adjacent neighborhood were declared a Superfund site 27 years ago, new pollution has recently been discovered, and the state still doesn't have detailed data on groundwater contamination around the mill, said Steve Tarlton, the state health-department radiation-unit manager who has overseen the cleanup for the state since 2003.

The state's estimate for cleanup costs was $43 million; however, it has permitted Cotter to put up only $20.8 million to guarantee the work will be completed.

The goal is for the U.S. Department of Energy to take the site over from the state, but first the site must be stabilized and cleaned up, which state regulators said is at least 10 years away.

Despite being owned by General Atomics, one of the country's top defense contractors, Cotter has in the past cited financial issues and threatened to walk away from the Superfund site.

State Sen. Kevin Grantham, R-Cañon City, said regulators are in a tough spot.

"I think they're walking a tightrope," he said. "A bad solution would be to chase a company away from the table that's moving in the right direction."

October 26, 2011

Uranium Market On Rios Radar

Published on Wednesday October 26 2011 (AEST)

Diversified mining giant Rio Tinto made a bid for Canadian junior Hathor Exploration last week which significantly gazumped an earlier bid by Canada's uranium leader Cameco. Hathor's highly prospective acreage in Saskatchewan is nearby existing Cameco operations.
Cameco would thus be able to extract greater synergies out of Hathor compared to Rio coming in cold, but analysts are not convinced Cameco, which is still developing its flagship Cigar Lake project, is keen on being dragged into a bidding war. Rio's bid highlights the company's waning legacy uranium exposure, with Rossing in Namibia on the decline and the future of Australia's Ranger mine, in which Rio has a majority owning via Energy Resources of Australia , unclear.

The point for the global uranium market is, nevertheless, that a global mining giant still sees value in uranium mining. On the other side of the ledger, Rio is divesting of aluminium assets.

Last week also brought news that European group URENCO and US conversion company ConverDyn would team up to bid on the depleted tails stockpile sitting at the US Department of Energy. Congress has been looking at ways to commercialise the stockpile to provide funds for environmental clean-up operations.

Once again, such interest betrays a more general market interest in uranium, suggesting that global nuclear energy was not swept away in the Japanese tsunami. However, while such news might spark more spot market interest on the buy-side, one would assume, last week saw little interest from buyers such that sellers, including producers, were forced to reduce pricing.

Industry consultant TradeTech reports five transactions in the spot market totalling just under 800,000lbs of U3O8 equivalent. By week's end prices had moved lower, such that TradeTech's indicative spot price has fallen US85c to US$52.00/lb.

Indicative term prices remain at US$55/lb (medium) and US$63/lb (long).

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" - Warning this story contains unashamedly positive feedback on the service provided.

Our archive tells no lies. FNArena warned its readers well before the price of crude oil peaked in 2008 the speculator bubble would deflate with devastating consequences for those holding oil company shares. In August we warned the most severe correction in modern history was forthcoming for natural resources. In 2007 we warned the problem with US subprime mortgages would prove much bigger than experts and media were anticipating (among other things).

October 24, 2011

Tokyo Electric Says No Plans To Sell All Uranium Stakes

Published on Monday October 24 2011 (AEST)

Tokyo Electric Power Co (9501.T) on Monday said it has no plans to sell all the stakes it holds in overseas uranium projects, denying a newspaper report that it would take such a step to raise funds to help victims of the crisis at its Fukushima nuclear plant.
Tokyo Electric is considering selling for a total of several tens of billions of yen its stakes in two uranium mining projects in Kharasan in southern Kazakhstan and the Cigar Lake mine in Canada, the Yomiuri newspaper reported.

The troubled utility, often referred to as Tepco, issued a statement saying it has no plans to sell all the stakes and that acquiring a steady stream of long-term uranium supplies through investments is important in securing stable power output.

When the Kharasan projects reach full production, Tepco should be entitled to obtain a little more than 10 percent of output, or 600 tones of uranium concentrate per year, the report said. That would be nearly 20 percent of the firm's annual needs before the March 11 quake crippled the Fukushima Daiichi nuclear plant, according to the paper.

Tepco has a 5 percent stake in the Cigar Lake project, which would allow it to acquire up to 450 tones of uranium condensate a year.

Tepco is likely to sell the stakes to Japanese firms to help ensure stable energy supplies in Japan, the report added.

(Reporting by Osamu Tsukimori; Editing by Joseph Radford)

October 22, 2011

The Great Uranium Bubble of 2007

Published on Saturday October 22 2011 (AEST)

Since the price peak in 2007, it’s been a hard few years for uranium investors.

Check out this uranium price chart:

Source: Cameco

The price peak is called the ‘Uranium Bubble of 2007′.

The bubble started as investors worried about a uranium shortage.

Back then the uranium supply was a problem… 180 million pounds (81,000 tonnes) were required for nuclear power. But only 108 million pounds were mined.

It was only because of the Russian ‘Megatons to Megawatts program’, where old Soviet nuclear warheads were converted into nuclear fuel, that there was enough uranium to meet the demand from nuclear reactors.

But the tight supply wasn’t enough to cause the 2007 price bubble. That was caused by something else.

Andrew Mickey, an investment analyst at Q1 Publishing, blames it on a disaster at uranium miner, Cameco’s [NYSE: CC] Cigar Lake mine…

Cigar Lake is the world’s largest undeveloped high-grade uranium deposit. But in the lead up to 2006, Cameco claimed Cigar Lake would supply 17% of the world’s uranium needs.

So it’s no surprise that what happened next caused the uranium price to take off…

As Mickey wrote in 2008:

‘The uranium bubble was set to deflate slowly. [But] the exact opposite happened. A retaining wall collapsed and the entire mine flooded. Cameco confirmed a single pound of uranium wouldn’t come out of Cigar Lake for at least five years. [So] the bubble grew even larger.’

With no supply from Cigar Lake, the uranium price reached ‘panic’ levels…

…Until the early days of the sub-prime crisis in 2007. That’s when the uranium price began to crash. So that today uranium is less than half the level it was in 2007.

But despite – or perhaps because of – the lower price, there are still supply and demand problems.

In fact, in its most recent commodity report the Australian Bureau of Agriculture and Resource Economics (ABARE) expects worldwide uranium consumption to rise 6% to 86,800 tonnes this year.

And with 72 nuclear reactors set to open by 2016, ABARE estimates more than 107,300 tonnes will be needed for fuel.

So, where will the supply come from?

There are two sources of uranium for the market. The main source is uranium mined from the ground.

The other source includes nuclear weapons. Amazingly, this market meets up to 30% of uranium demand!

However, the agreement with Russia for the ‘Megatons to Megawatts’ program is due to expire in 2013.

So if the program stops, the supply and demand gap for uranium will get worse.

Simply put, there’s not enough uranium to go around. And that could push the uranium price higher.

Dr. Alex Cowie, editor of Diggers & Drillers says, ‘…if uranium continues to creep up, then we may see the uranium sector finally turn a corner and start the next leg up.

‘We have seen the start of come corporate activity, which is another good sign for the sector. For instance, Korea Electric Power Corporation (Kepco) is the biggest power utility in South Korea, and operates dozens of nuclear plants.

‘A few months ago at the Fremantle Uranium Conference, Kepco announced it was looking for acquisitions so it’s good to see this happening. It has just done a deal with Strathmore Minerals [TSE: STM] to fund exploration of one of its uranium assets.’

As you can see, Alex is bullish on the uranium sector. He goes on:

‘Another deal involves global uranium leader, Cameco. It’s bidding for Canada-based Hathor Exploration [TSE: HAT].

‘These merger and acquisition deals should be a clear sign that the sector is alive and well.’

On Thursday Rio Tinto made a cash offer for Hathor of C$578m, 11% above Cameco’s unsolicited offer.

Large energy firms are trying to cash in on uranium deposits while the price is low. Simply because they understand their future energy needs and want to secure a uranium supply now.

This is good news for some Aussie stocks. Right now, Australia is the third largest miner of uranium… and it’s set to expand further.

Growth for the sector is tipped to be 15% per year until 2015. In fact, by then, Australia could produce 17,000 tonnes of uranium… which would be worth almost $3 billion to the Aussie economy.

This growth potential is why Alex is confident uranium is the perfect stock for risk-hungry investors. He says:

‘The charts for most uranium stocks may be ugly, but the fundamentals of the uranium market are strong.

‘There’s a huge opportunity for investors here with enough patience to stick around.’