Cameco Corp. Receives Skepticism As Global Uranium Supplies Dwindle

Published on Wednesday December 01 2010

Cameco Corp. plans to begin output at the world’s largest untapped uranium deposit in 2013, just in time to make up for a shortfall in global supplies.

The Project’s critics say it won’t happen.

Cameco, the world’s second-largest uranium producer, is developing the Cigar Lake mine in Saskatchewan beneath almost a half-kilometer (1,641 feet) of water-soaked sandstone. The mine, six years behind schedule because of floods, could meet 10 percent of current global needs.

Uranium use will exceed supply through at least 2015, according to the Royal Bank of Canada. China is building 25 nuclear reactors, almost double the number in operation, while Russia ends a program to extract uranium from atomic warheads.

“The world needs Cigar,” said Thomas L. Neff, a physicist at the Massachusetts Institute of Technology, who in the 1990s devised the so-called HEU, or highly enriched uranium, program to decommission the warheads.

Cameco said Nov. 8 it will proceed with an oil-industry technology to freeze the ground at the deposit to prevent more floods. Preventing further delay is crucial to Chief Executive Officer Jerry Grandey’s goal of doubling the Saskatoon, Saskatchewan-based company’s output to 40 million pounds by 2018.

“Since the HEU deal increasingly looks like it will come to a full stop by the end of 2013, it’s important from a global supply perspective that Cigar be there about the same time,” Grandey said in a Nov. 12 interview.

Uranium from the HEU program is responsible for almost 10 percent of U.S. electricity generation, Neff said.

Cigar Lake Joint Venture Partnership

• Idemitsu Canada Resources Ltd., 7.875%
• Cameco Corporation (mine operator), 50.025%
• AREVA Resources Canada Inc., 37.100%
• TEPCO Resources Inc., 5.000%

Earlier Disappointment

Some analysts and investors who track Cameco say it will miss its deadline. Duncan McKeen, a Montreal-based analyst at Macquarie Capital Markets, expects Cigar Lake won’t begin output until 2014. John Redstone, a Montreal-based analyst at Desjardins Securities Inc. who visited the project in September, predicts a 2015 startup.

“When someone has disappointed in the past, you have to discount the guidance they give,” said John Wong, a portfolio manager at New City Investment Managers in London who helps manage $450 million, including 175,000 Cameco shares. “Startup could be six months to a year later than projected.”

Click Image To Access Uranium Stocks Australia

Visit my other site Australian Uranium Investing

Namibia Has Nuclear Ambitions

Published on Tuesday November 30 2010
 

Namibia aims to build a nuclear power plant to fuel economic development in the world's fourth-largest uranium producer.

"It is the expressed decision of the Namibian government to seriously consider the development of nuclear power in order to complete the national energy mix and provide sufficient energy for our development," Mining Minister Isak Katali said yesterday.

"The uranium and nuclear energy policy to be developed will cover the entire nuclear-fuel cycle," Katali said at the country's first stakeholder meeting on plans for a policy on uranium mining and nuclear energy, convened with the help of Finland's nuclear authority.

The policy document and draft legislation were expected to be finalised by the middle of next year, said mining commissioner Erasmus Shivolo. "Nuclear waste will have to be stored in Namibia."

Finding a "convenient storage site" would be part of policy development.

Namibia has previously floated the idea of building a nuclear power plant by 2018 but analysts said it would be hard for it to finish a reactor by then, given the long time it takes to build a plant and the massive investment required.

The government first tabled plans for a nuclear plant in 2007.

Shivolo presented a rough outline of the new nuclear policy with sections on a nuclear-waste management fund, increasing black Namibians' participation in the uranium sector and limiting the use of the country's uranium to peaceful purposes.

Namibia produced 4626t of uranium last year, according to the World Nuclear Association. The government put a moratorium on issuing uranium exploration licences in 2007 because it did not have a nuclear policy.

Four companies hold uranium-mining licences, two mines are operational and two mines are under construction, including one being developed by French energy giant Areva, which plans to start production next year.

Namibia's uranium deposits have drawn increasing interest from France, Russia and other countries as global enthusiasm for nuclear power revives.

Namibia has no nuclear power of its own and relies on South Africa for about half its electricity.

Visit my other site Australian Uranium Investing