Cameco CEO Warns Of Squeeze In Uranium Supplies In 'Very Near Future'

Published on Wednesday February 29 2012 (AEST)

Cameco Corp.'s top executive is warning of an impending uranium supply squeeze as projects are delayed or cancelled and global demand for electricity continues to grow despite the Fukushima nuclear crisis almost a year ago.

Last year, world consumption for uranium hit 165 million pounds, far outpacing the 143 million pounds produced, CEO Tim Gitzel told an investor conference Tuesday.

And that gap is only going to widen as 96 new reactors come online by 2021, Gitzel said, "which raises the big question: where is this production going to come from?"

Cameco has not wavered from its goal of doubling uranium production to 40 million tonnes by 2018. But because mines are so complicated to build, it's tough for companies like Cameco to respond swiftly to demand swings.

"Uranium mines in general are difficult to bring on at the best of times and now, with the lower uranium prices, we're seeing (that) delays and cancellations of projects are becoming the norm as proponents are unable to meet feasibility tests," said Gitzel.

"As a result, we believe that the industry could face significant supply challenges and widening supply gap issues in the very near future."

Demand for uranium from countries like China, South Korea and India is expected to be "astounding" in the future, despite the pall cast by the Japanese nuclear disaster in March 2011.

An earthquake and tsunami caused the Fukushima Daiichi plant's cooling systems to fail and radioactive material to be released. The incident prompted Germany, which represents five per cent of global nuclear generation capacity, to abandon that source of power and other countries to slow their expansion plans.

Japan itself, which represents 12 per cent of worldwide nuclear generating capacity, only has a few reactors operating, but Gitzel said Cameco expects the remaining ones to be brought online starting later this year.

"Fukushima or no Fukushima, the world energy situation remains unchanged. Huge quantities of huge, reliable and affordable electricity will be needed to meet future demand," he said.

Since the 1980s, global electricity consumption has tripled and is expected to more than double again over the next two decades. Nearly two billion out of the world's seven billion inhabitants don't currently have access to electricity, Gitzel said.

Economic juggernaut China has 26 power plants under construction and "many dozens more planned for the future."

And India has announced plans to grow its nuclear power capacity from 5,000 megawatts to 63,000 megawatts by 2030.

"You can take that for what it's worth," Gitzel said. "But even if it's half that much, it's enormous growth."

All that growth is good news for Cameco and the uranium industry as a whole, he said.

"More reactors means more demand for uranium."

But there are some short-term headwinds. Cameco said during its fourth-quarter conference call earlier this month that it expects consolidated revenue in 2012 could be as much as five per cent lower than it was in 2011 due to lower sales volumes in the fuel services business and lower uranium prices. That should be partially offset by higher volumes in its electricity business.

Its profits in the final three months of 2011 grew by 29 per cent to $265 million and quarterly revenue jumped 45 per cent to $977 million from $673 million.

VIDEO - Strathmore CEO David Miller: Uranium Prices to Surge

Published on Saturday February 18 2012 (AEST)

Uranium prices are due to surge as supply cannot meet demand, and that's even without factoring in new power plants coming on line, says David R. Miller, CEO and director of uranium miner Strathmore Minerals, which produces uranium in Wyoming and in New Mexico.

Furthermore, oft-touted power sources like natural gas and alternative energy have their setbacks as well, and soon the world will wake up to the clean attributes of nuclear energy.

"There are 440 operating nuclear power plants and there are 62 more under construction. The existing fleet consumes 180 million pounds of uranium per year. The existing miners produce about 140 million pounds a year. So there's a shortfall right now before we turn on one more nuclear power plant," Miller told Newsmax.TV in an exclusive interview.

Expect supply to fall at least in the U.S., when Russia halts uranium sales in 2013 when a contract expires. 

France To Extend Life Of Nuclear Plants

Published on Monday February 13 2012 (AEST)

French President Nicolas Sarkozy has decided to extend the lifespan of France’s nuclear plants so they can operate beyond 40 years, Industry Minister Eric Besson said in an interview with Europe 1.

A decision to prolong the life of a plant would require approval by nuclear-safety watchdog Autorite de Surete Nucleaire, Besson said. Shutting France’s nuclear plants would increase electricity prices, he said.

Sarkozy on Feb. 9 vowed to keep the Fessenheim nuclear plant in eastern France open in opposition to Francois Hollande, the Socialist Party presidential candidate, who has promised to close the site because of safety concerns.

“The president has decided to ask all the operators to position themselves to be able to prolong the lifespan of our reactors and our nuclear plants beyond 40 years,” Besson said. The decision doesn’t automatically mean an extension because the regulator has the final say, according to the minister.

“It would be a waste to halt our reactors at 40 years,” Besson said. Reducing the share of nuclear in French power generation to 50 percent from 75 percent over 13 years would lift electricity prices by 30 percent to 40 percent, he said.

A nuclear power exit would be “destructive” for French industry because it would “strongly increase” electricity prices and hurt consumer purchasing power, Besson said. “There’s nothing reasonable about it.”

U.S. Approves 1st Nuclear Reactors Since 1978

Published on Friday February 10 2012 (AEST)

WASHINGTON (AP) – The nation's first new nuclear power plant in a generation won approval Thursday as federal regulators voted to grant a license for two new reactors in Georgia.

The Nuclear Regulatory Commission voted 4-1 to approve Atlanta-based Southern Co.'s request to build two nuclear reactors at its Vogtle site south of Augusta.

The vote clears the way for officials to issue an operating license for the reactors, which could begin operating as soon as 2016 and 2017.

STORY: Regulators approve nuclear reactor design

The NRC last approved construction of a nuclear plant in 1978, a year before a partial meltdown of the Three Mile Island nuclear plant in Pennsylvania raised fears of a radiation release and brought new reactor orders nearly to a halt.

NRC Chairman Gregory Jaczko voted against the Vogtle license, saying he wanted a binding commitment from the company that it would make safety changes prompted by the March 2011 nuclear disaster in Japan.

"We've given them a license. They have not given us any commitment they will make these changes in the future," Jaczko said.

The meltdown at the Fukushima Dai-ichi plant led to a series of recommendations by the NRC to improve safety at the 104 commercial nuclear reactors in the U.S. The changes are intended to make the plants better prepared for incidents they were not initially designed to handle, such as prolonged power blackouts or damage to multiple reactors at the same time.

The changes are still being developed, though Jaczko said it is clear that they will be required by the NRC before the new reactors open in 2016 or 2017.

Despite his opposition to the license, Jaczko called the vote "historic" and a culmination of years of work by Southern Co. and the NRC.

Southern Company Chairman and CEO Thomas A. Fanning called the NRC vote "a monumental accomplishment for Southern Company, Georgia Power, our partners and the nuclear industry."

Fanning said the company was "committed to bringing these units online to deliver clean, safe and reliable energy to our customers."

"The project is on track, and our targets related to cost and schedule are achievable," Fanning said.

Marvin Fertel, president of the Nuclear Energy Institute, an industry lobbying group, said the NRC vote "sounds a clarion call to the world that the United States recognizes the importance of expanding nuclear energy as a key component of a low-carbon energy future that is central to job creation, diversity of electricity supply and energy security."

Allison Fisher, an energy expert for the consumer advocacy group Public Citizen, called the NRC's action — less than a year after the Japan crisis — a step in the wrong direction.

"It is inexplicable that we've chosen this moment in history to expand the use of a failed and dangerous technology," she said.

While other countries such as Germany are reversing their commitment to nuclear power, "the U.S. is approving new reactors before the full suite of lessons from Japan has been learned and before new safety regulations that were recommended by a task force established after the meltdown crisis at Fukushima have been implemented," Fisher said.

The NRC approved a new reactor design for the Vogtle plant in December. Utility companies in Florida and the Carolinas also plan new reactors that use the same design by Westinghouse Electric Co.

The planned reactors are remnants of a once-anticipated building boom that the power industry dubbed the "nuclear renaissance."

President Obama has offered the Vogtle project $8.3 billion in federal loan guarantees as part of its pledge to expand nuclear power.

Obama and other proponents say greater use of nuclear power could cut the nation's reliance on fossil fuels and create energy without producing emissions blamed for global warming. A new government permit process strongly encourages utilities to use pre-approved reactor designs rather than building custom models, a strategy intended to make construction easier and less expensive.

The once hoped-for boom has been plagued by a series of problems, from the prolonged economic downturn to the sharp drop in the price of natural gas, due in part to improved drilling techniques that have allowed energy companies to tap previously unavailable underground shale formations.

The Vogtle project is considered by many observers to be a major test of whether the industry can build nuclear plants without the delays and cost overruns that plagued earlier rounds of building decades ago.

Close on the project's heels is South Carolina Electric & Gas Co., which is seeking permission to build two reactors at an existing plant in Jenkinsville, S.C.