November 17, 2011

Australia's Move On Uranium Sales To India Welcomed

Published on Thursday November 17 2011 (AEST)

The Australia India Business Council (AIBC) has welcomed Prime Minister Julia Gillard's support for uranium exports to India, a move that has boosted optimism across the sector here.


"The ability for India to generate the power needed to support its rapidly growing economy is reliant on safe and secure access to nuclear power. With Australia holding a significant share of the world's uranium reserves, it represents an important opportunity for trade that can be managed, given appropriate levels of transparency," said Arun Sharma, national chairman of AIBC, which this year celebrates 25 years of promoting trade and business relations between the two countries.

Gillard will ask the ruling Australian Labor Party, at its annual conference in December, to overturn its long standing policy of selling uranium only to countries that are signatories to the Nuclear Non-Proliferation Treaty (NPT). She will argue that though India has not signed the NPT, Australia, as the third largest producer of uranium in the world, cannot afford to miss out on the jobs and economic benefits this move would bring.

India is hoping that nuclear power will meet 25 per cent of its energy needs by 2050. "This opens up another avenue for Indian mining companies, which have been investing in energy resources, especially thermal coal. Besides buying uranium mines, there is scope for significant more investment in setting up processing plants," Ravi Bhatia, a senior technology business executive here for the past 29 years, told Business Standard.

BHP Billiton is working towards expanding the Olympic Dam mine, the world's largest uranium deposit and a leading copper resource in outback South Australia. "If the government changes its policy in relation to uranium sales to India and it ensures the appropriate safeguards are in place, BHP Billiton will review its position and take those matters into consideration.

However, currently we do not sell uranium product to India. That remains our position," Samantha Stevens from BHP Billiton told Business Standard.

India currently consumes about 3.5 million pounds/year of oxide (two per cent of global demand in 2011, of 192.5 mn pounds. "It imports oxide from Kazakhstan, Brazil and South Africa; enriched fuel and fuel assemblies are imported from France and Russia. We forecast five per cent per year growth in demand over 2010-2020; modest, because India has not yet been able to secure trade agreements with large producersâ, Tom Price, global commodity analyst at UBS Equities Research, told Business Standard

While the states of South Australia, a substantial uranium exporter, and Western Australia are backing Ms Gillard'ss proposal of allowing uranium exports to India, Queensland premier Anna Bligh has ruled out uranium mining in her state, which accounts for 42 per cent of all Australian trade to India.

Meanwhile US President Barack Obama, who arrived here today on a brief Australia visit, rejected reports that the US had influenced Gillard's decision. "We have not had any influence on Australia's decision to explore what its relationship in terms of the peaceful use of nuclear energy in India might be," he told reporters while addressing a joint press conference with her in Canberra. "India is a big player and the Australia-India relationship is one that should be cultivated. I don't think Julia or anybody else needs my advice in figuring that out. I will watch with interest what's determined."

November 15, 2011

Uranium Market Awakes Post Fukushima

Published on Tuesday November 15 2011 (AEST)

Two weeks ago the spot uranium market remained fairly quiet but expressions of interest for supply began to be sought by buyers. This proved enough to spark up interest from traders, it would seem, because last week saw a sudden surge in activity.

There is still a producer out there looking for 900,000/lbs of U3O8 equivalent and last week two utilities joined the fray seeking a total of 500,000lbs, reports industry consultant TradeTech.

Sensing upside afoot, traders piled in last week to take out most of what was on offer which has now cleared the market of material available in 2011, notes TradeTech, as well as the lowest priced material available for the first quarter 2012.

Thirteen transaction were completed totalling 1.8mlbs of which half was traded on Thursday and Friday. To put the week's volume into perspective, eighteen transactions totalling 2.2mlbs were completed in the entire month of October.

The buying rush was enough to send TradeTech's spot price indicator up US$4.00 for the week to US$56.25/lb. Has uranium now shaken off the Fukushima blues or is this just a false dawn? Early days. TradeTechs' term price indicators remain at US$55/lb (medium) and US$63/lb (long).

November 13, 2011

First Glimpse Inside Fukushima Nuclear Plant

Published on Saturday November 13 2011 (AEST)
Workers will spend the next 30 years dismantling its nuclear reactors

* There are up to 3,300 workers a day arriving at the nuclear plant
* Every day after work they discard their protective clothing, which is treated as radioactive waste
* Japanese officials guided journalists through the plant today for the first time since the disaster
* Conditions at Fukushima have been slowly improving and a 'cold-shutdown' is scheduled for the end of the year

Inside a reactor: The interior of the No. 4 reactor building at Tokyo Electric Power Co.'s tsunami-crippled Fukushima

Crushed: A glimpse inside the devastated nuclear power plant No. 4 after the destruction

Clean up effort: Workers will also be cleaning up the devastation inside the reactors after the March tsunami

Crippled: The steel walls of the nuclear power plant are crushed from the destruction

A view of the crippled Fukushima, showing the cranes working in the reconstruction attempt

November 9, 2011

Uranium Market Buyers Interest Returning

Published on Wednesday November 09 2011 (AEST)

Uranium industry consultant TradeTech closed its indicative spot uranium price at US$51.75/lb for the month of October. That's down US25c from the previous weekly spot price and also US25c down from the end-September closing price. And that about sums up the uranium market over the past couple of months ? a whole lot of not much.

October proved a very quiet month in the market, with 18 transactions completed for a total of only 2.2mlbs, down from 4.2mlbs in September. All month the spot price fluctuated in a range of less than US$2.00/lb. 

The lack of action is largely reflective of a stalemate between buyers and sellers, in which the buyers have not been all that keen, but sellers have not been prepared to lower prices to settle deals. It still appears US$50/lb is a rough line in the sand.

Also complicating matters have been differences in product demand (U3O8 and UF6) and differences in location of delivery requests across the globe, all of which underlines the fact there is no "real" global spot price for "uranium", and that's why TradeTech offers only an indicative price based on its market observations.

The industry remains unsure about levels of Japanese stockpiles no longer required, about ongoing US government plans to convert tailings stockpiles into useable product, and about the world's intentions from here with respect to nuclear energy, despite the Fukushima event now being eight months in the past. 

On the other hand however, the market has also been able to note ongoing corporate interest in uranium mining, most recently exhibited by rival bids for Canadian miner/explorer Hathor from industry heavyweights Cameco and Rio Tinto .

The good news is that a primary producer entered the market last week seeking 900,000lbs of U3O8 split between four different points of delivery. When a producer is buying spot uranium it usually implies a contract shortfall through lost production. TradeTech further notes several utilities ? the real end-users of uranium ? are contemplating entering the market for product in coming weeks.

The bad news is that the insignificant spot price movements of the last few months are an indication of sellers unwilling to sell too low, rather than a lack of sellers. Thus if some decent bids do begin to hit the market, TradeTech suspects they may be jumped on.

TradeTech settled its indicative spot price for last week at US$52.25/lb which is up US25c from the week before. Indicative term prices remain at US$55/lb (medium) and US$63/lb (long). 

November 8, 2011

Japan Restarts First Reactor At Genkai Post Fukushima

Published on Tuesday November 08 2011 (AEST)

A Nuclear reactor at Kyushu Electric Power Co.'s Genkai power plant in Saga Prefecture resumed power generation at around 3 p.m. Wednesday, after it was reactivated late Tuesday following a one-month hiatus, company officials said.

If all runs smoothly, the plant's No. 4 reactor is expected to be back to normal operation Friday, despite opposition from local residents.

It was the first time since the start of the nuclear crisis at the Fukushima No. 1 power plant in March that a utility has restarted a reactor that went offline due to a technical problem.

The reactor shut down automatically Oct. 4 due to an abnormality in its steam condenser that emerged after repairs were carried out using a faulty manual.

November 4, 2011

Japan Approves $11.5 Billion In Funds For Tepco

Published on Friday November 04 2011 (AEST)

Japan's Government approved Friday support funds for Tokyo Electric Power Co., also known as Tepco, with the move coinciding with the release of updated figures showing a massive net loss for Tepco for the fiscal year ending in March. 
Tepco will receive about 900 billion yen ($11.5 billion) in funds via the Nuclear Damage Liability Facilitation Fund to help compensate victims of radiation from the Fukushima Daiichi nuclear disaster. 

Tepco said Friday it expects a net loss of ¥576.3 billion for the fiscal year. It also said it plans to reduce staff numbers through a hiring freze, to cut pension benefits and to maintain a 20% salary reduction as part of cost-cutting moves. 

The measures will help lower operating costs by ¥237.4 billion in the 2013 fiscal year, Tepco said. Tepco shares ended 0.7% lower in Tokyo morning trade. 

In a related development, Japan's Ministry of Environment said contaminated materials released by Tepco's crippled reactors will be collected for the next 30 years and stored in concrete bunkers in Fukushima prefecture at a cost of about ¥1.1 trillion, according to Bloomberg News, which cited a ministry document.