Friday, December 28, 2012

Borshoff Says Two WA Mines Best Case

Published on Friday December 28 2012 (AEST) 

Paladin Energy chief executive John Borshoff has balked at Premier Colin Barnett's suggestion the State could have four operating uranium mines by 2023, saying two mines is a best-case scenario. 

The industry stalwart, who has been involved in uranium for more than 35 years and sits on the board of the Australian Uranium Association, told WestBusiness some companies with prospective projects in WA were living in a fantasy world. 

"I don't think the four deposits (Mr Barnett mentioned) will happen," Mr Borshoff said. "With Cameco's Kintyre and Yeelirrie projects, one of them could get up, maybe. (Mega Uranium's) Lake Maitland project will never happen. It's an inappropriate, low-grade and small deposit . . . it's a dead man walking. "Toro has a chance if the price of uranium goes up, so, realistically, that's two mines, maybe." Paladin, which has two operating mines in Africa, has the Manyingee and the Oobagooma projects in WA. Mr Borshoff said a uranium spot price of $US80 a pound would be needed before those projects were given the green light. 

Uranium is currently priced at $US43.37/lb. Reflecting on the year, in which uranium prices dropped to 2 1/2 -year lows and Paladin's shares to seven-year lows, Mr Borshoff said an impending supply gap would create a "tipping point" for the spot price. He predicted a price of $US65/lb by the end of next year and an upswing in Paladin's share price. In a wide-ranging interview, Mr Borshoff also weighed in on the green tape debate. 

This was brought to the fore in the uranium sector last week after Federal Environment Minister Tony Burke delayed making a decision on Toro Energy's Wiluna project. Mr Borshoff said that sort of inaction put companies in "suspended animation". "Businesses are trying to justify to banks and partners to invest and get capital, well, decisions like that just create unnecessary risk," he said.

Click Image To Access Uranium Stocks Australia


Tuesday, December 18, 2012

Labor Environment Minister Tony Burke Fails To Grant Toro Enery Green Light For Uranium Mine

Published on Tuesday December 18 2012 (AEST)  
Greg Hall managing director of Toro Energy.

Yet again we see the Australian Federal Labor Government playing games with the Mining Industry

Uranium aspirant Toro Energy has been dealt a blow on the eve of the Christmas break, with Environment Minister Tony Burke refusing to approve the company's plans for Australia's next uranium mine at Wiluna. While Mr Burke has not rejected the proposal, he has not approved it today as many in the market had expected. 

Instead he has told Toro that more information on certain matters is required before the mine - located in Western Australia's harsh interior - can proceed. Mr Burke has extended the deadline for a decision to be made to March 31, 2013, but has also indicated he may give his ruling earlier than that. Toro chief executive Greg Hall told BusinessDay this afternoon that it was not yet clear what extra information was being sought by Mr Burke. 

''We need to clarify that ... once we find that out we will know for sure,'' he said. ''Toro is very surprised and extremely disappointed with this further delay.'' While the market may not have expected a delay to approvals for the Wiluna mine, environment groups had been confidently predicting for some time that Toro had not done enough to satisfy the approval conditions. 

A recent consultant's report commissioned by the Conservation Council of Western Australia predicted that certain measures around storage of tailings were not adequate to meet federal approval. Council spokeswoman Mia Pepper said Mr Burke's decision was prudent and responsible. ''The Toro project is ill-conceived,'' she said. Australian Conservation Foundation spokesman Dave Sweeney said Toro was a small company that would struggle to raise the funds needed to get the Wiluna project off the ground. Toro will have a change of leadership in February when Mr Hall steps down and is replaced by Dr Vanessa Guthrie. 

That transition has already made headlines for making Toro what is believed to be the only ASX company with an-all female leadership, given that its chairman is Erica Smyth.

Click Image To Access Uranium Stocks Australia



Saturday, December 15, 2012

Japan's Election Could Revive Uranium Sector's Fortunes

Published on Saturday December 15 2012 (AEST)  

JAPAN goes to the polls this weekend in an election that will be watched closely by Australia's uranium and liquefied natural gas companies. If the major opinion polls out of Tokyo are anything to go by, uranium stocks could be the big winner to come out of the election. And Australia's LNG players, already facing headwinds in the form of escalating costs and increased competition, may have something else to worry about. The Liberal Democratic Party, which historically has been more pro-business and pro-nuclear than its key rivals the Democratic Party of Japan, looks likely to take office from the DPJ. 

While the debate around nuclear energy remains a highly sensitive one in Japan, the LDP has been campaigning on a platform far more nuclear-friendly than its rivals. The LDP has been proposing a three-year review that would determine which of Japan's 48 idled reactors are sufficiently safe to restart, raising the hopes of uranium miners and explorers eager to see Japanese uranium demand restored. The vote could well deliver a big boost to a uranium sector that has struggled to attract investor support since the Fukushima nuclear disaster last year. The subsequent shutdown of Japan's nuclear reactor network heralded a substantial fall in the price of uranium and the shares of the companies working in the uranium sector. Paladin Energy, for example, was trading at about $5 a share before the earthquake and tsunami that led to the Fukushima disaster but is now worth just 89c a share. 

The subsequent fall in the uranium price has dented the profitability of those already mining uranium, and the price is now considered too low to justify the development of new sources of supply. Greg Cochran, the managing director of Perth-based, Namibia-focused uranium explorer Deep Yellow, believes the election of the LDP could lead to a gradual restart of Japan's nuclear capacity, offering hope to the uranium sector. "While it's politically challenging -- and it's understandably a sensitive issue -- ultimately the rational outcome is for Japan to go back to nuclear," Mr Cochran told The Weekend Australian. Since shutting down its nuclear output, Japan has dramatically stepped up its reliance on imported coal, LNG and oil as a means of meeting its power needs. That, Mr Cochran said, had had an adverse effect on the country, environmentally and economically. "Japan's carbon dioxide emissions have increased dramatically since Fukushima, and that's in a world in which their industrial production is down," he said. "That's simply a result of the fact they're burning more oil and gas and coal to replace the 30 per cent of supply they had from nuclear. "The importation of all that additional carbon-based fuels is also meaning they're running significant trade deficits. It's a really challenging situation.

" While investors still are not pouring back into uranium stocks ahead of the election, Mr Cochran noted that Deep Yellow had been able to raise another $12 million in equity in recent months. Besides the increasing likelihood of Japan restarting its nuclear capacity, 2013 is also the year the long-running highly enriched uranium agreement -- which saw Soviet-era nuclear warheads from Russia recycled into nuclear reactor feedstock -- draws to an end. Mr Cochran noted that the HEU agreement accounted for about 15 per cent of the global uranium supply, and its expiry could be the catalyst for a further uranium price rebound. Uranium's election-inspired gain could be the LNG industry's pain. Japan's increased appetite for LNG in the wake of Fukushima helped drive a surge in spot LNG prices, providing a handy fillip for those producers with spare cargoes. 

The prospect of Japan abandoning nuclear forever also opened up the potential for the country -- which already ranks as the world's single-biggest buyer of LNG -- stepping up its appetite even further. Those hopes will look much more remote if indeed the LDP triumphs tomorrow. Japan's potential nuclear restart adds another layer of uncertainty to the LNG demand outlook. 

The market is already under pressure as buyers eye the potential to secure cheaper gas supplies out of North America, and China works hard to prove up what are expected to be vast domestic supplies of shale gas and coal-seam gas. Speaking to The Weekend Australian, CLSA's head of Asian oil and gas research, Simon Powell, said Australia's LNG projects looked increasingly likely to be caught in a pinch between rising costs and worsening market dynamics. "Australian LNG projects are an awful way up the global cost curve relative to other projects, number one. Number two, demand for LNG beyond 2015 may not be as much as people predict," he said. 

"China will prove up a lot more unconventional gas than people actually think, the Japanese could potentially restart their nuclear program as their demand for electricity rises. "And a prolonged economic malaise in Europe means we're already seeing European LNG cargoes end up in Asia." But before uranium players begin to celebrate and LNG companies start to fret, there is an important reason to keep calm. Assuming a change in leadership this weekend, Japan will have had seven prime ministers in just five years. Given that record, it is easy to see how major policy changes may never be far away.

Click Image To Access Uranium Stocks Australia



Monday, December 10, 2012

Pro-Nuclear Liberal Democrat Party Favored To Win Power In Japanese Election

Published on Monday December 10 2012 (AEST)  

TOKYO — Japanese voters look likely to hand victory to a party that favors nuclear power in the first election since the March 2011 Fukushima radiation disaster - a result a baffled Greenpeace activist likens to one of the “wonders of the world.” But even if the main opposition Liberal Democratic Party (LDP) wins the Dec 16 election, it will not reflect any groundswell of popular support for nuclear power. Instead, it would underline a lack of credible anti-nuclear political standard bearers in Japan and the ability of the LDP to focus the debate on security matters and the stalled economy. 

An LDP win would also signal successful lobbying by Japan’s “nuclear village”, a web of vested interests including utilities, bureaucrats and lawmakers that remains powerful despite the world’s worst radiation crisis in a quarter century. “This is the first election since the Fukushima nuclear disaster and if it does not result in an anti-nuclear government, that will be one of the wonders of the world,” said Kazue Suzuki, a campaigner at environmental group Greenpeace. “Since Fukushima, Germany rejected nuclear power and Italy rejected nuclear power. 

If Japan can’t, the world will be amazed.” The March 11, 2011 massive earthquake and tsunami killed nearly 19,000 people and devastated Tokyo Electric Power Co’s Fukushima Daiichi plant, triggering meltdowns, spewing radiation and forcing some 160,000 people to flee their homes, many never to return. The disaster destroyed a carefully cultivated myth that nuclear power was cheap, clean and safe. It also mobilised Japan’s often apathetic voters in huge anti-nuclear demonstrations during a summer of discontent. Media surveys have shown a majority of Japanese want to exit nuclear power by 2030 if not sooner. But opinion polls also show the pro-nuclear LDP with a big lead over Prime Minister Yoshihiko Noda’s Democratic Party of Japan (DPJ), although a hefty chunk of voters remain undecided ahead of the lower house election. “The LDP is the likely winner and is pro-nuclear, but it will not win because it is pro-nuclear but because the DPJ is so hapless and the economy is in trouble and people figure it is time for a change,” said Jeffrey Kingston, director of Asian studies at Temple University’s Japan campus. The DPJ swept to power in 2009 for the first time, promising to put more money in the hands of households through such steps as child allowances and to boost the economy by re-orienting spending and cutting waste. But critics say its promises were honored mostly in the breach, and the economy is now widely believed to be in its fourth recession since 2000. Former Prime Minister Shinzo Abe, who as LDP head aims to get his old job back after quitting in 2007, is calling for hyper-easy monetary policy to rescue the economy and tough diplomacy toward a rising China as the core of his campaign. “It’s as if public opinion doesn’t matter at all,” Kingston said, referring to the sidelining of the nuclear issue by the main opposition party. “It reinforces perceptions about Japan’s democracy deficit.” The small Japan Communist Party and tiny Social Democrats are firmly against nuclear power but unlikely to win many seats given that few voters back their anti-capitalist ideologies. A group led by former DPJ leader Ichiro Ozawa joined a new party launched last Tuesday by Yukiko Kada, the female governor of Shiga Prefecture in western Japan. The new party has made opposition to nuclear power a key plank. Ozawa is seen as the force behind Kada’s party. Critics say the veteran deal-maker Ozawa, who quit the DPJ over Noda’s plan to raise the sales tax to curb debt, lacks credibility given his checkered record of political flipflops, although Kada might offset his negative image and help bring together disparate anti-nuclear mini-parties. Noda, for his part, is trying to strike a contrast between the Democrats as committed to phasing out nuclear power and the LDP, which promoted atomic energy during its nearly six decades in power and remains vague about the future even now. 

The LDP says it will decide gradually on restarting reactors deemed safe by a new regulatory agency over the next three years and reach a conclusion on Japan’s “best energy mix” in 10 years. In its campaign manifesto, the DPJ included a pledge to aim to cut Japan’s reliance on nuclear power to zero by the 2030s, echoing a government strategy unveiled in September after months of public and expert debate. That sharp shift in energy policy was met with howls of criticism from business lobby Keidanren. Before the Fukushima disaster, Japan had planned to boost atomic power to more than half of electricity supply from nearly 30%. Manufacturers argue the DPJ’s shift would raise electricity rates and force production and jobs offshore. Days after unveiling the strategy in September, Noda’s government stopped short of fully endorsing it in a cabinet meeting although Noda said the target stood. “Noda is trying to emphasize nuclear policy to distinguish the Democrats from the LDP. 

Unfortunately, as a standard bearer for getting out of nuclear, Noda lacks credibility,” said Andrew DeWit, a professor at Tokyo’s Rikkyo University who researches energy policy. “Keidanren pulled out all the stops and made it very difficult for them to stand their ground.” A new party set up by popular Osaka Mayor Toru Hashimoto to woo disaffected voters also blotted its anti-nuclear copybook by dropping a target for ditching nuclear power after merging with a small pro-nuclear party led by former Tokyo Gov Shintaro Ishihara. 

Whether an LDP victory would spell business as usual for energy policy, however, remains far from clear. Some changes are already afoot, including the introduction of a feed-in-tariff (FIT) program under which utilities must buy power from suppliers of renewable energy sources such as wind and solar power at pre-set premiums for up to 20 years and moves toward more competition in the utilities sector. “There are a number of factors that would likely stand in the way of a return to business as usual. But it’s not impossible,” DeWit said. “I think we can’t dismiss the capacity of the nuclear village to ram through a ‘back to the future’ scenario.” 

Click Image To Access Uranium Stocks Australia