July 30, 2012

Camecos Kintyre Uranium Project Halted

Published on Saturday July 28 2012 (AEST)
Uranium prices halt Sandy Desert Project THE most likely of Australia's next big uranium mine developments - the Kintyre project in Western Australia's Great Sandy desert - has fallen victim to sluggish demand and prices for the nuclear fuel, and WA's "hot" construction market for resource projects.

Project operator and 70 per cent owner, Canada's Cameco, has revealed that the economics of the project are "challenging" in that a development would not be profitable at current uranium prices. Prices are 34 per cent below where they need to be for a viable project. The sluggish demand backdrop has implications for BHP Billiton which must find a home for the additional uranium it will produce with the planned $30 billion expansion of its Olympic Dam copper/uranium/gold mine in South Australia's outback. 

The expansion would see uranium output at Olympic Dam grow massively from 9.6 million pounds a year to 40.6 million pounds a year - 17 per cent of forecast global mine output in 2020. But the Weekend Australian revealed that BHP plans to defer a decision on the project for two years. Sluggish uranium demand has already reported to have led to BHP becoming disinterested in moving towards developing its Yeelirrie uranium deposit in WA. 

 Cameco chief executive Tim Gitzel told analysts that Cameco was "not going to develop Kintyre at any cost." An eventual development of the mine is dependent on improved uranium prices, or a substantial increase in the project's resource base. A recently completed prefeasibility study in to a development confirmed the challenging economics. It means that Cameco and its 30 per cent partner, Japan's Mitsubishi Development, will not begin development of what would have been WA's first uranium mine in early 2014 as first planned. A 2014 start to production would have meant first production in 2016. 

Discovered more than 25 years ago, the contemplation of Kintyre's development only became possible with the election of the pro-uranium mining Barnett government in 2008. It was in the same year that Rio Tinto, struggling to raise cash in the wake of the global financial crisis and its ill-timed acquisition of Alcan, sold Kintyre to Cameco/Mitsubishi for $US495 million. Cameco said that despite Kintyre being one of the world's biggest undeveloped uranium deposits (59.7 million pounds), a planned 7-year mine life that would recover 40 million pounds of uranium faced challenging economics "current uranium prices" and because of "continued cost escalation" in WA. 

 "To break even, the prefeasibility study indicates the project would require an average realised price of about $US67 or about 62 million pounds of packaged production using a uranium price similar to today's spot price ($US50 a pound)," Cameco said. Cameco said it would now set out to improve overall project economics by stepping up exploration to increase the resource base. 

 "We continue to have a positive view of the long-term fundamentals of the uranium market and want to ensure our assets are ready to respond when the market signals new production is needed. We expect a feasibility study would take about eighteen months to complete (early 2014)," Cameco said. It said that while future supply of global primary uranium production is uncertain, global consumption was quite predictable.

"We believe that to fuel the more than 60 reactors currently under construction and the further growth we expect by 2021, production will have to come from new primary sources of production. In today's environment, those sources of production pose economic challenges, " Cameco said. 

Spot uranium prices have fallen by more than 10 per cent in the last year, due mainly to the closure of the nuclear power industry in Japan following the Fukushima disaster. Mr Gitzel told analysts that the recent restart of two reactors in Japan would "pave the way for more restarts." 

"We've also seen some Japanese utilities come into the market to contract for uranium. So we believe that these restarts are just the beginning and that these restarts, along with further restarts and new reactors coming online in China, and utilities continuing to return to long-term contracting, will help move the industry away from its current near-term uncertainty," he said. 

"When the market does move, it tends to move quite quickly as we saw in 2007, and again, in 2010. And the long-term fundamentals are there to support positive movement in the industry. 95 net new reactors are expected by 2021 and more than 60 of those are under construction right now."


July 23, 2012

UK Billionaire Richard Branson Urges Obama to Help Develop Fast Reactors

Published on Monday July 23 2012 (AEST)

Along with the president of the American Nuclear Society, Virgin Records founder and serial entrepreneur Richard Branson is urging the Obama administration to fund research into integral fast reactors. In documents obtained by the Guardian newspaper, Branson asked unsuccessfully for meetings with Barack Obama and Energy Secretary Steven Chu. 

He signed a letter promoting integral fast reactors as a source of abundant energy and a treatment method for plutonium and nuclear waste. The letter was also signed by climate change campaigner and Goddard Institute chief James Hansen and ANS President Eric Lowen, the Guardian reported Friday. 

Lowen is also the chief engineer for GE-Hitachi's PRISM small modular IFR, which the company pitched to the UK government as a way to dispose of the country's unwanted stockpile of plutonium last year. Branson is not the only billionaire promoting fast neutron reactors as a way to address climate change and climbing worldwide energy demand. 

Bill Gates is also backing and promoting a so-called standing wave reactor under the company TerraPower. As envisioned, it would run for years by breeding and immediately burning plutonium from a chain reaction within a core of depleted uranium that's initially set off by a small amount of enriched uranium 235. 

As with other reactor concepts that breed fissionable isotopes, though, both Gates' and Branson's favored technologies face resistance in the US because of proliferation concerns regarding the plutonium and other elements they can create.


July 20, 2012

Lehman Makes Big Uranium Sale

Published on Friday July 20 2012 (AEST)

Just how significant is this sale? 
To put it in perspective, Mr. Chang noted that the amount represents 12% of the uranium produced 
within the U.S. in 2010. 

Lehman Brothers has become a mere skeleton of what it once was as the fourth-largest U.S. investment bank. The company has somewhere around 400 employees who are charged with the task of unwinding derivatives trades and selling illiquid assets such as high-end real estate.

 The goal, of course, is to settle with creditors who have asserted more than US$300-billion in claims. It’s first payment of US$22.5-billion was made in mid-April.

 Among the items recently liquidated was 450,000 pounds of yellowcake uranium, which was acquired as part of a commodities contract. It was sold at prices ranging from US$51 to US$65 per pound, according to Versant Partners analyst Rob Chang. 

Uranium prices fell US60¢ to US$50.15 in the week ending Monday, July 16, 2012, according to Ux Consulting. 


July 6, 2012

Australian Uranium Market Outlook For 2012

Published on Friday July 06 2012 (AEST)  
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