Uranium Week: Interest Continues To Build

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By Greg Peel

America has a problem. While China is leading the global charge to add nuclear power capacity to its “green” energy quota, by rapidly building plants featuring the latest technology, and other emerging markets such as India are also ramping up their plans, the ageing fleet of US reactors is reaching a point of accelerating retirements.

Five US reactors have recently been retired, at least three more are scheduled for closure shortly, and there is a risk up to 15-20 plants will shut down over the next 5-10 years. Speaking at a nuclear power summit hosted by the US Department of Energy, the Energy Secretary declared the time will come – perhaps five to ten years from now – when nuclear power is going to have to see a substantial resurgence.

If the US is to reach its 2030 emission reduction targets, a greater proportion of nuclear power generation will be required than is currently on line. But many new reactor builds will be required just to maintain the current number in the face of retirements, let alone to actually increase capacity. The risk is a more expedient solution to replacing lost power generation through nuclear plant closures is to replace them with the latest technology in gas-fired plants. While gas is a much “greener” solution to electricity generation than coal, it is not zero-emission, as are nuclear plants once up and running.

Replacing nuclear with gas will only add to net emissions, not subtract.

While this dilemma was being pondered at the industry summit, the spot uranium price continued to ratchet up last week, industry consultant TradeTech reports. Utilities, intermediaries and producers all came to the market as buyers, while traders dominated the sell-side. As buying interest builds, sellers are happy to keep backing away their offer prices.

A total of 960,000lbs U3O8 equivalent changed hands last week. TradeTech’s weekly spot price indicator has risen US75c to US$28.85/lb.

One transaction was reported in term markets last week. TradeTech’s term price indicators remain unchanged at US$29.25/lb (mid) and US$42.00/lb (long).

In Australian news, Toro Energy ((TOE)) has released the results of preliminary benefication test work which imply the potential for the uranium feed grade at the company’s Wiluna project in WA to increase by 4.5 times. Toro was the first company to receive uranium mining approval in the the state, which previous governments had banned.

Wiluna is estimated to contain 80.5m pounds of U3O8 – enough to suggest a 20-year mine life.

The Botswanan government has granted approval for that country’s first uranium mine. Australia’s A-Cap Resources ((ACB)) filed a mining licence application last year for its flagship Letlhakane project. Letlhakane has an official reserve of 65.7m pounds U3O8, offering a potential 18-year mine life.

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