BHP Billiton A Bad Uranium Play

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Any reason seems a good one these days to buy BHP Billiton (BHP) shares. They flirted with the $30s last week and closed at $29.50 on Friday. Who still remembers the days when one could snatch them up for $9-something?

Anybody can come up with a handful of reasons of why investors should have BHP shares in their portfolio. Record high copper prices. An ongoing ‘China is hungry for resources’ theme. And maybe, just maybe, the current craze for everything that has a distinct relationship with uranium and/or gold may play a role as well.

BHP is sitting on the world’s largest unmined uranium reserves at its Olympic Dam mine. For those willing to play the uranium fad there’s some disappointing news. BHP Billiton’s current uranium contracts are locked in until 2010. That doesn’t mean they cannot increase their current production of course, but it won’t happen overnight

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