Published on Thursday October 27 2011
CHINA over the next decade is tipped to do for uranium what it has done for iron ore, with demand to rise significantly.
Interest in the energy source is increasing again after a decline due to last year's Fukushima nuclear disaster in Japan.
CRU Strategies associate consultant Alan Trench told yesterday's Mining 2011 Resources Convention in Brisbane that Chinese demand could transform the uranium market over the next decade, just as it had shaken up iron ore.
The consensus among keynote speakers yesterday was that uranium was the commodity to watch. The mood was less positive about the iron ore price, which had softened in recent weeks.
Peter Kerr, chief financial officer of uranium takeover target Bannerman Resources, said the sector was definitely improving after a difficult year following the Japanese disaster.
China's Hanlong Group made a $145 million bid for Bannerman in July. The target rejected the offer as too low but is talking to the suitor and other parties about developing its Namibian project.
Mr Kerr said the discussions had covered growth in China and its nuclear power ambitions.
"It gives us, as a junior uranium developer, some comfort that there are people in China saying this is not a slowdown and that there is evidence that there is real driving growth here," he said.
Global mining giant Rio Tinto put its weight behind the sector with its $C578m ($549m) bid for Canadian uranium junior Hathor Exploration. The market is also waiting for Extract Resources to be taken out as a result of China's Guangdong Nuclear Power bidding for the Namibia-focused company's major shareholder, Kalahari Minerals.
"It has been tough because of the political comments that have been made, but when you look at the fundamentals of what the big developing countries want to do, the fundamentals are very strong," Mr Kerr said.
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