U.K. Says Nuclear Plants Will Move Ahead During Study on Safety

Published on Wednesday April 6 2011

The U.K. government will allow work on building new nuclear power plants to progress as it conducts a study of the disaster at an atomic facility in Japan, the minister in charge of climate change said.

There will be no “material delay” in the U.K.’s plan to allow new nuclear generators at eight sites, Climate Change Minister Greg Barker said in an interview in New York. The report, he said, is due to be handed to ministers next month.

Barker’s remarks were aimed at assuaging concerns that Britain’s reactor-building program would be held up while the nuclear regulator studies the accident in Japan, caused when an earthquake and tsunami interrupted power to cooling pumps at a Tokyo Electric Power Co. facility. The U.K. estimates it needs investment of 200 billion pounds ($320 billion) to replace aging generators including nuclear plants by 2010.

“We’re not proposing to build in an earthquake zone, and we’re not proposing to build somewhere prone to tsunamis, but we will be looking to see what can be taken from that terrible crisis,” Barker, a Conservative member of Parliament in the coalition government, said.

E.ON AG (EOAN), EDF SA (EDF) and RWE AG (RWE) are among the companies bidding for work replacing Britain’s aging atomic power stations. Germany halted nuclear stations and said it would review whether it should continue with building more, and China and India also are studying what they should change as a result of the accident in Japan.

Safety Report

Britain’s Deputy Prime Minister Nick Clegg fanned concerns about a delay last week, when he told reporters that the new plants may never be built because of raising costs associated with new safety standards.

Energy Secretary Chris Huhne’s last month asked Mike Weightman, the country’s chief nuclear inspector, to determine what the U.K. can learn about the accident in Japan. Barker dismissed the idea that the report would make any conclusions that would hold up work. 

“We aren’t expecting any surprises and are equally determined to learn any lessons that are applicable in the U.K.,” Barker said. “There’s no change to our timetable.”

It’s too soon to tell if the incident at the Fukushima power plant will affect global emissions targets, he said. “But it will drive an even greater sense of the need to save energy to reduce dependency,” he said. Energy efficiency will be the technology that receives the greatest boost from the disaster at Fukushima, he said.

“We don’t see in the U.K. a need for any major departure from our strategy as a result of Fukushima. Safety remains our paramount concern but we see no reason today to divert from our published plans,” he said.

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Solid Nuclear Fuel Rod Overview

Published on Friday March 25 2011

This gives one a pretty good under standing of the 

Life Cycle of a Nuclear Fuel Rod

A typical solid nuclear fuel rod includes a zirconium alloy tube or “cladding” encasing a single column of uranium fuel pellets. The cladding tube is smaller in diameter than your index finger, and is about 12 feet long. 

The uranium pellets are each about the size of the tip or your pinky finger, with the energy equivalent of 17000 cubic feet of natural gas, 1780 pounds of coal or 3.5 barrels of oil.

The pellets are stacked in the tube with allowance for pellet expansion during fission and heating of the uranium. Once the uranium pellets are loaded into the cladding tube, zirconium end caps are welded in place to form a complete loaded fuel “rod.”

The cladding, pellets and even an individual virgin rod are not hazardous to handle alone, however, multiple loaded rods in close proximity will begin a spontaneous fission reaction. The rods are thus maintained in a non-critical, i.e., a non-fissioning, state during storage or transport by either substantial separation between rods or by control rods or other moderators suitable to absorb neutrons in a more compact rod arrangement.

The fuel rods are then arranged in “bundles” or “fuel rod assemblies”, e.g., 14×14 or 17×17 arrays, which are then inserted into the core with a number of control rods being retractable from the bundle to initiate fission and insertable into the bundle to stop fission. Many rod bundles are oriented vertically in the reactor core with a substantial flow of water passing upward through the bundles to convey the fission reaction heat to a steam turbine for generation of electricity.

The zirconium cladding serves to hermetically isolate the uranium pellets and accumulated fission byproducts from exposure to the water flow in the core or cooling tank or to the atmosphere.

The thin-walled cladding is transparent to radiation but is naturally affected by the high heat stresses and heat loading in the core. The rods are preemptively retired after a finite core cycle, 18 months to several years, to maintain cladding integrity even though only a small fraction of the uranium is “spent.” This finite core cycle is also limited by accumulation of fission byproducts, particularly nuetron absorbers, inside the fuel rod.

A retired or spent nuclear fuel (“SNF”) rod is placed in a water cooling tank for an initial cool-down period during which the more highly radioactive (shorter half-life) isotopes rapidly decay. During this period, the rapid decay still generates substantial decay radiation and heat, albeit only a small fraction of the fission radiation and heat that is generated during reactor operation. After this initial cool-down period, the slower decay of the remaining longer-half-life isotopes generates a moderate amount of decay radiation and heat, which is readily absorbed by a concrete “dry cask” during long-term storage.

A typical nuclear plant can have hundreds of active fuel rod bundles in each core, thousands of SNF rods in short-term cool-down tanks and fuel from tens of thousands of SNF rods in long-term dry cask storage. The cooling tanks at the compromised Fukushima Daiichi nuclear plant collectively house around 11,000 SNF rods with a portion of those housed in the cooling tanks above reactors 1-4.

Water in the cool-down tanks acts as a neutron moderator, radiation shield and coolant, so long as the water level around the rods in the tank is maintained. If the SNF rods are left exposed and uncooled long enough, rapid oxidation (often called “burning”) and extreme heat stress can eventually compromise the cladding, expose the uranium, generate hydrogen, and release fission byproducts. Unmoderated and uncooled SNF rods can produce sufficient radiation and heat that even brief close proximity worker exposure is unacceptable. Should the cooling tank levels drop too low for too long, it could be challenging to restore the cooling tank water levels from a safe distance.

Hopefully, the cooling tank water levels at the Fukushima Daiichi nuclear plant will be restored and the situation stabilized soon.

Australia's Energy Resources (ERA) Suspends Uranium Processing " 12 Week Stoppage "

Published on Friday January 28 2011

SYDNEY Jan 28 (Reuters) - Energy Resources Australia has suspended uranium processing at its Ranger mine in Australia's Northern Territoy as a precautionary measure during the region's annual wet season, the company said.

The 68 percent-owned subsidiary of Rio Tinto said the suspension was likely to last 12 weeks.

"The La Niña weather pattern, which has brought extensive flooding to the eastern states of Australia, has also brought significantly higher than average rainfall to Ranger mine since October 2010," the company said.

As a consequence of the suspension, ERA said it sees 2011 production of uranium oxide at this stage to be at a similar reduced level to 2010, when it produced 3,793 tonnes. 

 Readers Please Note!

I would like to also take special note that this may very well put upward pressure on the current Uranium Spot Market

During 2010, Energy Resources Ranger Mine currently supplied  approximately 8.8% of World supplies and is rated as the worlds Second largest Uranium producing Mine behind Cameco's McArthur River.

Australia Can No Longer Stay A Lone Nuclear Denier

Published on Monday January 24 2011

Last May, at a United Nations conference in New York, the veteran Japanese diplomat and director-general of the International Atomic Energy Agency, Yukiya Amano, glowingly endorsed civilian nuclear power.

He said, "More than 60 countries are now considering the introduction of nuclear power to generate electricity. It is expected that between 10 and 25 new countries will bring their first nuclear plants online by 2030."

Nuclear power "must be accessible not only for developed countries but also for developing countries", he said.

Japan has 54 nuclear power stations, two more under construction and 12 planned. The nuclear share of its electricity generating capacity will increase from about 30per cent today to more than 41 per cent by 2017.

This in an Asian nation that has experienced the horrors of Hiroshima and Nagasaki and which is regularly tested by nature's destructive forces. When I visited Kyoto in 1997, my Japanese colleagues reminded me that the nation's 54 nuclear power stations averted emission of 287million tonnes of greenhouse gases a year. Relying on Australian uranium fuel, this "carbon offset" was then more than all of Australia's emissions.

I recently addressed the World Renewable Energy Summit in Kuala Lumpur. High on the agenda was nuclear power for Asia.

An official paper from Korea entitled A Green Nuclear Utopia reminded delegates that in Korea 20 nuclear reactors produced about 17,700MW of electricity, meeting about 40per cent of the country's needs. Six more were under construction and six more planned.

This would ensure that the nuclear share of electricity generation would be in excess of 60 per cent by 2030.

Korea is now capable of marketing its own nuclear plant design to the world. Its order book for the construction of four advanced pressurised water reactors for the United Arab Emirates represents a contract worth more than $US20billion ($A20.2 billion).

Operation of these plants over the next 60 years is also worth about $A20.2billion. By 2050, the Korea Electric Power Corporation expects to have contracts worth more than $A506 billion.

China now contributes almost a quarter of the world's CO2 emissions.

Its volume of emissions over the past 10 years is greater than that of Brazil, Germany, France, Canada, Spain, Britain, Australia and Italy combined. 

China's energy policy is based on a 74per cent dependence on coal in 2010. By 2030, it is planned to reduce this to 50per cent, mainly by use of nuclear power. This will mean increasing the present nuclear installed capacity of 9000MW electric to about 190,000MW(e). Australia, in a similar bondage to the hydrocarbon industry, must learn from China's vision. It should start by introducing at least 5000MW(e) of nuclear power by 2020 and adopt a fixed carbon tax of between $10 and $20 over the next decade. Only in this way can we meet our United Nations emission reduction obligations.

In India 20 nuclear power plants supply more than 5per cent of its electricity. Four more reactors are being built, and the energy policy seeks at least 20 more by 2030.

A 2008 nuclear cooperation agreement with the US raises the possibility of foreign involvement in projects to generate as much as 63,000MW(e) of nuclear power by 2030.

Vietnam has firm plans for 15,000MW(e) of nuclear power by 2030. Indonesia is budgeting $A8.09 billion for four plants totalling 6,000MW(e) by 2025. The Philippines plans to rehabilitate an established but mothballed plant of 620MW(e) at a cost of about $A1.09billion.

Thailand plans to build at least 4000MW(e) of nuclear power commencing in 2014. Malaysia, which now produces almost two- thirds of its electricity from natural gas, has budgeted $A7.08 billion to build a large nuclear power plant by 2023.

As Asia "goes nuclear"  the new years's challenge for the Australian Government's Climate Change Committee is to tackle the problem of global warming with sound technology and informed realism.

This means re-examining and rejecting the pseudo-scientific and political attraction of "clean coal" and the semantically seductive utopian appeal of the costly "renewables".

Above all it means that the Australian Government must soon accept and endorse a now globally proven principle that at the heart of any successful emissions abatement project is the deployment of safe, secure and cost-effective nuclear power.

In Australia's case, an 80per cent historical base-load energy reliance on fossil fuels and chemical combustion must be replaced by the superb nano-technology of nuclear fission.

Recent polling clearly indicates that support for nuclear power in the Australian community is growing dramatically. Support for the technology is also beginning to emerge from both sides of Federal Parliament and from the offices of state premiers. Australia, the home of the world's nuclear fuels, can no longer sustain an appalling clean energy policy which makes it the sole "nuclear denier" among the planet's top 25 economies.

Professor Leslie Kemeny, a consulting nuclear scientist and engineer, is the Australian foundation member of the International Nuclear Energy Academy.

China Strengthens 2011 Rare Earths Regulation

The Ministry of Land and Resources has designated 11 rare earth mining blocks in Jiangxi as national planning centres

(Beijing) – China has drawn-up national planning regions for rare earth and iron mines to strengthen government regulation over the development of the metals.

According to the Ministry of Land and Resources, the national planning regions are comprised of 11 rare earth mining blocks covering 2,534 square meters in Ganzhou, Jiangxi Province. It also includes 466.94 square meters of vanadium titano-magnetite mining areas in western Panzhihua in Sichuan Province.

Since 2010, the Chinese government has accelerated the consolidation of the country's rare earth resources. According to a plan set by the Ministry of Industry and Information Technology, China will reduce the number of rare earth refining companies to 20 from the current number of more than 100 by 2015.

The Ministry of Commerce set quotas for 2011's first batch of rare earth exports at 14,446 metric tons on December 28, a 35 percent decline from the same period last year.

China accounts for more than 90 percent of the world's supply of rare earths, elements essential for high-tech electronics and electric vehicles.

China Says It Is At Least A Decade From Reprocessing Commercial Nuclear Fuel

Published on Tuesday January 18 2011
 

China's state nuclear power company says it's at least a decade away from beginning large-scale commercial nuclear fuel reprocessing.

The official China Daily newspaper cites an unidentified official with the China National Nuclear Corp. as making the remark at a news conference Monday.

That follows the announcement earlier this month that Chinese scientists had mastered a technology for extracting plutonium and uranium from fuel rods used in nuclear power plants that could potentially provide China with a significantly larger stock of those elements.

Several countries already possess the means to reprocess nuclear fuel, which costs significantly more than using it once and creates extracted plutonium that can be used in nuclear weapons.

Japan Plans To Accumulate 120 tons Of Uranium From 2011 Through To 2015.

Published on Wednesday January 12 2011

Japan will begin this year to stockpile enriched uranium for nuclear power generation purposes in order to meet global demand for nuclear power expected to rise, Japanese media reported.

The Japanese government, in cooperation with the private sector, aim to secure a stable supply of fuels to enhance its energy security and pitch the country's nuclear power generation technologies to emerging economies, Nikkei said.

The paper noted that although utilities currently hold reserves for their own nuclear power plants, the new initiative will mark the first time the government has stockpiled emergency supplies of nuclear fuel, and it plans to accumulate 120 tons through fiscal 2015.

Japan consumes more than 1,600 tons of enriched uranium per year. Japan Nuclear Fuel Ltd. enriches about 4% of domestic demand, while utilities import the remainder from countries such as the U.S., Russia and France.

The government will use two to four storage facilities operated by uranium-processing companies and will cover costs to purchase uranium, as well as the interest on maintenance expenses, the paper said, adding that stockpiling costs are estimated to reach about 24 billion yen (about $290,000,000) over five years, of which the government plans to finance around 400 million yen.

Japan and Jordan signed an agreement in September for nuclear power cooperation, paving the way for the export of Japan's technology in that field. Japan hopes to win more deals to provide nuclear energy technology with other countries in the Middle East including Saudi Arabia, United Arab Emirates and Turkey.

Uranium Juniors - Mergers & Acquisition Inevitable In 2011

Published on Friday December 10 2010

Merger and acquisition activity involving Canadian Uranium Exploration companies is likely to pick up in the coming year, as nuclear firms around the world jostle to ensure access to future supplies of the fuel, said Emil Fung, the vice-president for corporate development at Vancouver-based CanAlaska Uranium.

CanAlaska, which has amassed a sizeable property portfolio and identified a number of early-stage prospects in the uranium-rich Athabasca Basin, has seen a step-change this year in the level of interest in the company and its assets, he said in an interview during a recent visit to Toronto.

The company already has agreements with Japan's Mitsubishi Corporation, a Korean uranium consortium and China's East Resources, and is in “active discussions with several very large parties” on further transactions.

“I think what we see now is a genuine push to actually enter into exploration in Canada. And that's very, very positive for us,” he said.

China alone has 26 reactors under construction, representing a third of the global total and India is also expected to add 12 new facilities by 2020, while other countries including Japan, Korea, Russia and Egypt are also building and planning new reactors, an executive from Cameco said earlier this week.

At the same time, the highly-enriched uranium deal between the US and Russia is widely expected to end when it expires in 2013 – taking a big chunk of secondary supply out of the market.

“There is going to pressure on the uranium price, and there is going to be pressure on who controls uranium, and therefore from the perspective of junior exploration companies you are going to see a lot of M&A activity,” Fung commented.

“I think if you are an executive in the uranium exploration business today and you are not aware of the M&A situation around you, then you are not doing your job.

“It's inevitable, consolidation is inevitable in this game.”

It is possible that the increased uranium prices and interest in the sector could result in more M&A for Canadian junior companies, GMP Securities analyst David Wargo agreed on Thursday.

URANIUM ADDS EDGE FOR REACTOR BUILDERS

The groups that build and market nuclear reactors realise that they can compete much more effectively for contracts if can offer customers uranium supplies to fuel the plants, especially as concern over future supplies of uranium heightens, Fung said.

“If you can sell a reactor, that's a huge GDP builder, and with the world's economy as depressed as it is today, you can't get better bang for the buck than selling a nuclear reactor, in terms of job creation and contribution to GDP

“And the ability to sell the fuel with the reactor is important, so companies that have uranium will be more aggressive in leveraging that in the sale of reactors.”

Countries like China with big nuclear build programmes and plans are looking at the supply picture, and realising the benefits of having a foot in uranium exploration, rather than just looking for available production, he said.

Fung, who began his career as a design engineer on Canada's Candu reactor in the mid-1980s, travels regularly to Asia for discussions with groups there.

“In the old model, buyers just wanted to know if you had uranium to sell,” he said.

“Now we are seeing a lot of interest, not only in China but from other countries as well, specifically in exploration.”

CanAlaska has always had some talks going on in the background for potential joint ventures on its prospects, but the negotiations are clearly now “more commercial”, he commented.

Also, while the firm's existing Japanese and Korean partners approached the investment more from a financial standpoint, the new group are much more operationally capable in terms of uranium exploration and mining.

The company would expect to sign joint ventures that included “heavy operational contributions” from its new partners, including by bringing in skilled people – a resource that is in short supply after several decades of almost no uranium exploration around the world.

Investors easily forget that uranium is a strategic commodity, for which buyers must plan some 20 or 30 years in advance to fuel nuclear reactors, Fung said.

“People are often hung up on what is the spot price today, what is the long-term price?

“If you have got a nuclear reactor, you don't mind paying whatever price it is to keep it running. Because whatever price you pay is a pittance compared with the cost of actually stopping that reactor and not having enough fuel to generate the electricity.”

P.S. Australian Exploration Company's will also, with little doubt become to some Major M&A activity in 2011

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China's Growing Appetite For Uranium

Published on Thursday December 09 2010

Is there any metal or, indeed, commodity in which China is not making the running — where China’s rising demand is not creating a wholly new dynamic in the global supply market? After some thought, one might have ventured uranium, that metal long dependent on the established generating markets of the old order – Russia, France, Japan, the US and, more recently, South Korea. But apparently even the uranium market is rapidly changing. According to an FT article, China is aiming to generate 5 percent of its electricity from nuclear power by 2020, in the process quadrupling its uranium consumption to 50 million-60 million pounds a year, according to UxC forecasts.

That compares with annual global demand of about 190 million pounds today and has seen the Chinese embark on an ambitious and aggressive buying spree at prices some 30 percent over current spot and twice spot prices of a year ago, tying up long-term supply offtake agreements and joint ventures. With minimal domestic production, just 2 million pounds this year, China’s imports have been equivalent to 20-25 percent of global uranium consumption and yet reactor building is still in its early stages with 23 reactors under construction but 120 planned, according to another article.

Ralph Profiti, analyst at Credit Suisse in Toronto, believes China is getting ahead of other consumers and, as with copper and non-ferrous metals, is building up a strategic stockpile before the Americans, Japan or Korea need to do their restocking.

If that is so, the US is particularly vulnerable. The country has over 100 nuclear reactors generating nearly 20 percent of the country’s electrical energy, but the US imports over 80 percent of its uranium supply. If uranium supply goes the way of other commodities, the US could increasingly be a hostage to the fortunes of an increasingly limited supply base as spot prices are driven higher and sources are tied up under long-term supply agreements. Which may explain why US authorities were so willing to pass approval for a Russian state-owned mining company, ARMZ, part of Rosatom power group, to control up to half of US uranium output by the middle of the decade.  The FT this week reported ARMZ has been approved by the Committee on Foreign Investment in the US, the government agency that vets foreign takeovers of US companies for possible national security implications. In November, the US Nuclear Regulatory Commission, which controls the ownership and operation of nuclear power facilities, also gave their go-ahead for ARMZ to take a 51 percent stake in Uranium One. The firm owns resources in Wyoming and plans under ARMZ’s control to ramp up production to between 2 and 4 million pounds by 2015 against a total US production today of about 4 million pounds.

Interestingly, the changing supply landscape has not escaped the investment community. BlackRock, said to be one of the largest investors in commodities, is said to be bullish on uranium, and an exchange-traded fund launched by Global X Funds has increased its holdings to $70 million in just three weeks since launch.

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Uranium Stocks Are Hot

Published on Sunday November 28 2010

Uranium stocks have suddenly turned red-hot and we have one of the best of them on our Canada Report Recommended List.

Cameco Corp. (NYSE:CCJ) is the largest uranium producer in the world. It operates out of Saskatchewan, which is a rich storehouse of commodities that are in high demand right now, including potash and oil.

We first recommended Cameco to Canada Report readers in August 2008 when the shares were trading at $32.66. Within weeks, Lehman Brothers collapsed and the world was plunged into the worst financial crisis since the Great Depression. Cameco stock fell to a low of $12.95 in February 2009 as the price of uranium tumbled.

But all that is history. Cameco shares have moved sharply higher in recent weeks thanks to a surge in world uranium prices. After hovering in the low $40s per pound range for the first half of the year, the price began to move up in August and reached $48 a pound in September. Since then, it has spiked dramatically, trading this week at more than $60 a pound.

TD Securities says the price jump is due to new demand from China and has raised its 2011 forecast to $62.50 a pound with a $75 target in 2012.

The big price move has prompted renewed investor interest in Cameco. As recently as July, you could have purchased the stock for around $21. Now it is trading in the $37 range and is poised to move a lot higher.

The price run-up happened despite a 43% drop in third-quarter net earnings compared to 2009. On Nov. 8, the company reported a profit of $98 million (25c a share) down from $172 million (44c a share) last year (figures in Canadian currency). For the first nine months of the 2010 fiscal year, earnings were $308 million (78c a share) compared to $501 million ($1.29 a share) last year.

However, CEO Jerry Grandey put a positive spin on the results in his comments. “Production volumes are 17% higher than in 2009, while production costs are lower,” he said. “Our U.S. dollar realized prices have also risen, illustrating the strength of our contract portfolio.

“As we advised earlier this year, revenues were lower in the third quarter due to the timing of uranium deliveries. We expect about one-third of our uranium sales will be delivered in the fourth quarter.

“We are on track to double our annual uranium production from existing assets by 2018. Our growth strategy is in place to ensure we remain among the world’s leading uranium suppliers to those who choose to use safe, clean and reliable nuclear power.”

The stock has already made a big move but is still at a level where I consider it to be a buy for those who want exposure to what is shaping up to be a new bull market in uranium.

Visit my other site Australian Uranium Investing

Resistance To Nuclear Power Leaving Australia Vulnerable

Published on Tuesday Oct 12 2010

BRISBANE -(Dow Jones)- Australia's resistance to a domestic nuclear power industry risks leaving the country vulnerable if the world agrees to greenhouse gas emission targets, the head of Canberra's nuclear power body said Tuesday.

Ziggy Switkowski, chairman of the Australian Nuclear Science and Technology Organisation, said the country's current dependence on fossil fuels would leave it exposed if carbon emissions targets are agreed to.

"This is a national vulnerability. If the world moves to clean energy, then what's been a source of competitive advantage for Australia--low-cost fossil fuels--will become a competitive disadvantage," he told a conference in Brisbane.

Australia is home to around 38% of the world's uranium reserves and two of the world's three biggest uranium mines--BHP Billiton Ltd.'s (BHP) Olympic Dam mine and Energy Resources of Australia's (ERA.AU) Ranger mine.

However, it was alone among the world's 28 largest economies in not considering nuclear power as part of a future energy and climate change policy, Switkowski said.

The country's only working nuclear reactor, at Lucas Heights near Sydney, produces medical isotopes.

Around 90% of Australia's electricity is generated from fossil fuels, principally coal, and establishing a nuclear industry would be essential to breaking that pattern, he told Dow Jones Newswires.

"We're just about the highest per capita greenhouse gas emitters in the world, and we are publicly committed to massive greenhouse gas reduction targets.

"But I don't see how we're going to get there without nuclear power in the narrative. I can't make the numbers work."

He suggested that ten 1,000-megawatt reactors could be built by 2050 to deliver a quarter of the country's energy needs, built on the location of existing fossil fuel stations because of their good grid connections, water supply, and the absence of local communities.

However, the result of recent federal elections, after which the Labor government holds power thanks to the support of a Green party MP and three independents, has made the prospects of change more remote, he said.

The Greens are publicly opposed to nuclear power, and two of the three independents have a record of opposition to the nuclear industry.

"I think the election outcome has, if anything, slowed or tempered any enthusiasm for nuclear power at the policy level for some time," he said.

At the same conference, Tsunehisa Katsumata, chairman of Tokyo Electric Power Co. (9501.TO), one of Japan's largest power utilities, said Australia was more suited to nuclear power than his own country.

"You have lots of land where people don't live. You don't have earthquake issues because you have solid geology," he said. "But it is difficult to convince your community on the basis of energy security," since the country has such abundant energy supplies, "and also fossil fuel power generation is very low cost, so it is very difficult for nuclear to compete."

Tepco operates 17 nuclear reactors in Japan, accounting for 40% of the company's electricity output. Its Kashiwazaki-Kariwa plant is the world's largest-capacity reactor.

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Trade Tech Uranium Spot Price Update

Published on Tuesday Oct 5 2010


Uranium Spot Price Update
Uranium prices posted a modest gain last week, industry analyst TradeTech lifting its spot price indicator for the week ending October 1 by US$0.75 to US$47.50. The increase reflects multiple producers entering the market actively seeking uranium for immediate delivery, which one assumes would be to make up contract short-falls.

One utility also entered the market, seeking around 400,000 pounds of uranium for spot deliver and a further 650,000 pounds for delivery next year according to TradeTech. Elsewhere, the group notes two buyers are still evaluating offers for up to one million pounds of material.

In the term uranium market TradeTech notes there has been no new demand or transactions since the end of last month. One US utility is assessing offers for delivery of up to 2.2 million pounds of uranium between 2013-2019, while another US utility is evaluating offers for 520,000 pounds for delivery in 2011 and 2012 and up to 1.1 million pounds per year in 2015 and beyond.

There was one September transaction in the term uranium market, a utility selecting a preferred supplier for delivery of around two million pounds of material to be delivered across a six-year period.

TradeTech's new spot price indicator compared to a price of US$46.75 the previous week and is an increase of US$1.25 from the level at August 31. Prices were volatile through September as earlier in the month TradeTech's spot price had been as high as US$48.00 per pound.

For the month a total of 20 transactions were recorded for a total of 3.1 million pounds equivalent of uranium, while year-to-date volume now stands at 32.6 million pounds uranium equivalent.

Falling prices in recent months attracted new buyers into the market, though TradeTech notes the impact of this increased buying interest was offset by new supplies hitting the market.

Factoring in September's market activity sees no change to TradeTech's medium-term price indicator of US$50 per pound. The group has lifted its long-term price indicator to US$62 per pound from US$60 per pound previously. The increase to the long-term price indicator reflects both increasing demand for material and recent offers and transactions.

URANIUM --- Resource Capital Research

Published on Saturday Oct 2 2010

-- The uranium spot price is currently trading at US$46.50/lb, up 14% from 3 months ago (US$40.75/lb).

-- The Fund Implied Price (FIP) is US$47.50/lb, which compares with US$46.00/lb Jan '10.

-- The long term contract uranium price is US$60.00/lb. It is up from US$58/lb 3 months ago.

-- There are 493 new nuclear reactors planned or proposed globally as of August '10.

-- Global supply 2H10 is expected to increase, with stronger production from Kazakhstan, Ranger,Olympic Dam and continued ramp-up at Kayelekera.

-- There is potential for production to decline in Niger where Areva is understood to have withdrawn expat staff following a series of kidnappings in the country.

-- Utility purchases remain discretionary though timing of demand from long term Chinese inventory build remains a factor and will continue to influence short term market trends, as will, increasingly, Japanese and Indian utility purchases.

Resource Capital Research ("RCR"), an equity research company which focuses on small and mid size resource companies, today launched its major quarterly research report covering 17 global uranium exploration and development companies.

The quarterly report typically reviews companies listed in Australia, Canada, USA and UK and active in established uranium districts globally, including Australia, Canada, USA, Argentina, Peru, Mongolia, Zambia, Tanzania, Niger and Namibia.

To access the free summary report or to purchase the complete 98 page comprehensive report, go to www.rcresearch.com.au/reports. RCR also publishes gold, iron ore, and tin-tungsten sector reports.

Equity market performance

The market valuation of Australian companies with one or more uranium projects is up 18% over the past month, up 29% over the past 3 months, and up 18% over the past 12 months. This compares with Canadian companies with one or more uranium projects, up 22% over the past month, up 28% over the past 3 months, and up 43% over the past 12 months.

In the past 1 month, the uranium mining majors have had mixed share price performance: Cameco (CCO) is up 5% (3 month performance +18%), Denison Mines (DML) is up 14% (3 month performance +26%), Uranium One (UUU) unchanged (3 month performance up 28%), Energy Resources of Australia (ERA) up 1% (3 month performance -5%) and Paladin (PDN) down 4% (3 month performance -3%). The UUU three month price increase (+26%) is attributable to the announced ARMZ transaction; and ERA's 6 month price decline (-30%) is attributable to a number of factors including the impact to sentiment of the decision to subsume nearby uranium deposit Koongarra (Areva) into Kakadu NP.

The Merrill Lynch Uranium Equity Index (a basket of uranium equities) is up 4% over the past month, up 9% over 3 months and down 17% over the past 12 months.
Uranium price outlook

The uranium spot price is currently trading at US$45.50/lb, up 14% from 3 months ago (US$40.75/lb) and compares with US$44.50/lb at the start of the year. The Fund Implied Price (FIP) is US$47.50/lb, which compares with US$46.00/lb Jan '10. The FIP has generally been a good leading indicator of near term spot price performance.

The uranium spot price is expected to find a floor around US$45-50/lb. The gradual downward drift in spot and contract prices over the past 12 months reflects in part the tremendous growth in new mine supply from Kazakhstan's ISR projects. Recent price influences driving the spot market up to US$48/lb are not entirely clear, though traders point to purchases from major producers. Utility purchases remain discretionary though timing of demand from long term Chinese inventory build remains a factor and will continue to influence short term market trends, as will, increasingly, Japanese and Indian utility purchases. WNA expects the market to remain in modest surplus through 2013/14.

Supply 2H10 is expected to increase, with stronger production from Kazakhstan, Ranger, Olympic Dam and continued ramp-up at Kayelekera, partially offset by a potential decline in production in Niger where Areva is understood to have withdrawn expat staff following a series of kidnappings in the country.

The long term contract uranium price is US$60/lb, up from US$58/lb three months ago. It is down from US$61/lb Jan '10, though has been relatively stable since peaking at US$95/lb from May '07 to March '08.

Kazakhstan ISR production is forecast to reach 47mlbs in 2010, up from 36mlbs in 2009 (+30%) and potentially rise to 78mlbspa U3O8 by 2018. At the recent WNA conference in London, Kazakh officials indicated they will expand production capacity only so far as demand and price warrant.

World planned and proposed nuclear power reactors

Currently there are 440 nuclear power reactors in operation and 59 under construction. There are 493 new nuclear reactors planned or proposed globally as of Aug '10, up from 435 Dec '09 (+13%). A total of 84 new reactors are scheduled to be commissioned by 2017.

As of Aug '10, countries with the largest number of planned and proposed new nuclear reactors are: China 153; India 60; Russia 44; USA 31; South Africa 27 (mostly smaller modular reactors); and Ukraine 22.

Since Dec '09 the largest increases in announced planned and proposed new nuclear reactors are in India, increasing from 38 to 60 (+22, up 58%); and China increasing from 125 to 153 (+28, up 22%).


Events of the past 3 months include:

-- Greenland Minerals and Energy -- Greenland Government amended the
Standard Terms of Exploration Licenses that allows for the inclusion
of radioactive elements as exploitable minerals for exploration and
evaluation. This allows GGG to advance the world class Kvanefjeld rare
earths and uranium project through DFS (expected 2011).

-- The Australian federal government has scrapped the formerly proposed
RSPT -- resource industry super profits tax -- which was to apply to
all mining resource sectors, and in its place is proposing the scaled
down Mineral Resource Rent Tax (MRRT) which is applicable only to the
iron ore and coal sectors.

-- Aura Energy announced (Aug '10) enhanced metal extractions from
bioleaching at the large multi-metal Haggan Project, Sweden. Initial
test results indicate Alum Shales may be amenable to bioheap leaching
at low capex and opex. The project's Inferred Resource includes
291mlbs U3O8 grading 162ppm.


"Producer buying has driven the spot price from ~US$40/lb three months ago to a recent high of US$48/lb, and is currently US$46.50/lb. With stronger global production anticipated 2H10, there is potential for the spot price to fall back slightly though we expect the long term price to remain well supported on strategic inventory purchases from China, India, Japan and Germany," John Wilson, Managing Director of RCR, said.
About Resource Capital Research

Resource Capital Research ("RCR") (www.rcresearch.com.au) was founded in 2004 and is based in Sydney. RCR provides investors with in-depth reports on current investment opportunities in the mining sector both in Australia and globally. The focus is on small and mid cap resource companies, within the gold and uranium sectors, ranging from exploration stage through development and production. John Wilson the principal of the firm and analyst has over ten years' experience analysing mining companies in Sydney and on Wall Street including for major investment banks.


The report is available at www.rcresearch.com.au. The next Uranium Sector Review will be published in the December Quarter, 2010. RCR also publishes the Gold Company Review, Iron Ore Company Review, Rare and Minor Metals Company Review; and a Copper Company Review -- out soon.