May 02, 2008
U3O8.biz Weekend Wrapup
Publisher: U3O8.biz
Author: Luke Brocki


Next week could be pivotal for the nuclear industry. Hundreds of nuclear executives will flock to Chicago to gab policy at the Nuclear Energy Institute's 55th annual Nuclear Energy Assembly. And across the pond, detailed offers are expected for British Energy, a company central to the British government's plans for a new generation of nuclear power plants.

Downtown Chicago will host the three-day forum May 5 to 7. This year it's all about energizing the world's low-carbon future. Talks of the industry's record performances at existing power plants are expected to be flanked by discussions of plans for new nuclear plants across the United States.

According to the Nuclear Energy Institute, the nuclear energy industry's policy organization, the first four to eight new U.S. reactors are expected to start operating come about 2016. Nuclear proponents hope this new generation of reactors will help feed a country increasingly hungry for power---projections estimate a 30-percent increase in U.S. electricity demand between now and 2030.

Nuclear power is attractive to American investors thanks to great performances in 2007: that country's 104 existing reactors generated a record-breaking 806 billion kilowatt-hours of electricity last year.

New investment is already flocking in. The U.S. Nuclear Regulatory Commission has received license applications for 15 potential reactors and more applications are expected to come in through 2008.

Now over to the UK. The Telegraph newspaper reported Thursday the deadline for the next round of bids for British Energy has been brought forward. It seems that country's government wants a quick decision on the future of its nuclear industry.

Several European energy juggernauts are thinking of bidding for British Energy, which owns eight nuclear reactors in the UK on land that could prove invaluable when the time comes to build new power stations.

France's EdF, Germany's RWE and Britain's Centrica, the owner of British Gas, have already submitted proposals. John Hutton, the UK secretary for business and enterprise, told the Telegraph that Britain's proposed new nuclear push would create 100,000 jobs. But Centrica was quick to warn that would only be possible with direct involvement of a UK company with control over the new technology's intellectual property rights.

In Canada, provincial bans on uranium mining are again the talk of the town. This, after a moratorium on mining in parts of Labrador and reaffirmations of long-standing uranium exploration bans in Nova Scotia and British Columbia.

In the latest development, the government of New Brunswick feels the majority of its constituents support nuclear power, albeit in silence, while opponents are vocal in expressing health and environmental concerns.

Donald Arseneault, that province's natural resources minister, says uranium exploration doesn't pose any dangers, even in light of the recent bans in other jurisdictions. The Times & Transcript, a daily newspaper based in Moncton, New Brunswick, reported Tuesday the Conservation Council of New Brunswick continues to host public info sessions across the province and faces hundreds of residents opposed to nuclear development.

And according to Arseneault, New Brunswick must do more to educate the public on uranium exploration as well. More info sessions, these in collaboration with the province's mining association, are planned in the near future.

Meanwhile, on Canada's west coast, the Association for Mineral Exploration (AME) in British Columbia is disappointed the province didn't consult the mining industry more before its reaffirmation of the ban on uranium exploration.

The AME feels safe and environmentally sound uranium exploration is already underway in six Canadian provinces and three territories; the association feels uranium is a key element in the global pursuit of green energy sources.

But the BC government was very clear: under the province's commitment of no nuclear power, the government will ensure all uranium deposits remain undeveloped and its "no registration reserve" will exclude rights to uranium from any future exploration claims.

The recent round of moratorium talks started earlier this month, when the Nunatsiavut Assembly voted to ban uranium mining on Labrador Inuit Lands for the next three years. The ban still allows for exploration in the region, but nonetheless sent uranium junior miners scrambling to change their regional strategies.

The spot price of uranium remained unchanged this week at US$65 a pound U3O8, but recent price drops have taken their toll on the sector, which is now mired in bearish sentiment, with investor buying interest fading while nuclear reactor demand is nowhere to be seen.

Reuters reported the bearish sentiment has now spread to the long-term contract price of uranium, which fell $5 for the first time in 11 months to $90 this week, after news that many nuclear reactors have now topped up their supplies.

According to Reuters, the main driver behind the spot price has been the speculative community believing in a nuclear renaissance, but that's proven tougher than expected during poor macroeconomic conditions... a.k.a. a global credit crunch.

According to analysts, the market should improve in the next three to five years, as demand from new reactors comes online and delays in new supply become a reality.