Published on Wednesday December 01 2010
Spot uranium is now sitting at $US61 a pound, a dramatic improvement since June when it only just found support level at a whisker over $US40/lb.
URANIUM prices continue to surge on the back of a looming new wave of investment by China in nuclear power.
So the news today that some Labor federal politicians now want the party to have a serious debate on the subject of nuclear power in Australia - which, unlike wind or solar power, provides base load, reliable electricity at an economic cost - comes just as it is starting to dawn on investors that uranium demand is about to take a big leap.
The latest report from the commodities team at Canada’s Scotiabank notes that China’s 12th five-year plan will call for the doubling of nuclear energy’s role in the country. The report says it is clear that a renaissance in nuclear energy is genuinely under way. China’s National Development and Reform Commission’s Energy Research Institute estimates that the number of nuclear reactors will grow from today’s 13 to the equivalent of more than 80 by 2020. The details of the new five-year (2011-2015) will be released in the first months of next year.
Also boosting spot uranium prices was news of large, long-term supply agreements: one, France’s Areva will supply 52 million pounds at $US67/lb to China Guangdong Nuclear Power Corp; two, Canada’s Cameco will sell that Chinese company 25m pounds (along with 23m pounds to China National Nuclear Association; and, three, the state-owned nuclear power company in Kazakhstan will also supply China Guangdong with 63m pounds by 2020. As Scotiabank notes, these contracts will tie up considerable quantities of uranium.
World production totals 140m pounds a year.
