U3O8 Uranium.

(Thanks DUB)

Uranium to be supply driven rather than inventory driven
By: Rhona O'Connell
Posted: '11-JAN-05 07:00' GMT © Mineweb 1997-2004



LONDON (Mineweb.com) -- At the inaugural Uranium Mining Conference held in London on January 10th by stockbrokers Hargreave Hale in conjunction with LM Associates and at which six uranium producers or explorers / developers presented (of which more later this week), the Keynote address concerned the changes in and outlook for the uranium market itself.

The paper was delivered by Dustin J. Garrow, President of International Nuclear Inc., and a seasoned member of the market, with over thirty years’ experience in the uranium and nuclear power industries. His primary conclusions were that the international uranium market is in transition from being inventory-driven to production-driven.

Demand is set to outstrip supply by a considerable margin, the inventories built up during the period of excess (effectively from 1945 to 1986) will not be sufficient to supply the developing shortfall and the uncertainty over potential uranium supply through to 2010 suggests the development of shortages. He contends that the future price trend will accordingly be determined by the price necessary to support new production centres and that a term uranium price at or above US$30 per pound (of U3O8) is not unreasonable.

He also stressed that it is important, when looking at the market, to consider the long-term contract prices that are being struck rather than the spot price, as not much more than 10% of uranium transactions are concluded at spot with the rest in term contracts.

Secondary uranium sources are rapidly declining, notably the US-Russian highly-enriched uranium programme, which has been delivering uranium to the market at the rate of 24m lb per annum and this level is not thought to be viable for the future. In addition China is in transition from being a uranium exporter to importer. And critically, of course, the collapse in market prices through the 1980s and 1990s following record levels at the end of the 1970s (reminiscent of another highly-priced metal) has meant that there was a dearth of exploration during the 1980s and the first half of the 1990s. This was a key feature of some of the producers’ presentations as a number of them have picked up cheap properties and are now looking to develop or joint venture (see separate piece later this week).

As a consequence of market developments, uranium mine production dropped significantly in the first half of the 1980s from approximately 150M lb at the start of the 1980s, when it just exceeded demand, to below 100m lb per annum during the 1990s, while consumption was rising from roughly 150M lb towards 175M lb per annum.

Nuclear power generation has been on the increase over the past decade although during the 1990s there was little freshly commissioned greenfield capacity. This has been due to improved reactor performance, increased fuel burn-up (i.e. the amount of energy recovered from the fuel bundles), extended fuel cycles, and capacity increases of between 5 and 15% at existing plants. The average load factor in the United States has risen from approximately 65% in 1990 to roughly 90% by 2000, while the extension of the fuel cycle now means that the period between refuelling the core in the reactors has extended significantly and now runs at between 18 and 24 months, whereas in the 1970s it could be as short as twelve months. In addition, the average capacity factor for nuclear plants stood in 2003 at 89.6%, compared with 70.6% for coal, while the natural gas-fired plants were operating at only approximately 40% of the time – and renewable, wind-powered plants only operated for one-third of the time.

These increases in efficiency have resulted in considerable cost reduction and in the US nuclear power is now competitive with coal and natural gas ($31-46/MWh post absorption of early plant costs, against $33-41/MWh for coal and $35-45/MWh for batural gas). This is one of the factors that have led to a renais

Uranium prices are set to climb

By Matt Chambers Bloomberg News Wednesday, January 5, 2005
Supplies dwindle even as Asia builds more nuclear reactors

MELBOURNE Prices for uranium, used to generate 16 percent of the world's electricity, may rise by a quarter this year as stockpiles of the nuclear fuel decrease and demand is set to rise from reactors being built in China and India.
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"You have gone from a buyer's to a seller's market," said Bob Mitchell, who holds physical uranium worth more than $26 million for Adit Capital Management in Portland, Oregon. "Most reactors under construction haven't secured long-term supply and there is no inventory left among utilities."
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Commercial stockpiles of the fuel dropped 50 percent between 1985 and 2003 because mine output could not keep up with demand, according to a September report by the Massachusetts Institute of Technology. Mine expansions may not meet demand, pushing up prices for uranium at miners such as Cameco, the world's biggest, and Energy Resources of Australia.
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Cameco shares rose 68 percent last year and Energy Resources of Australia, which is 68 percent-owned by Rio Tinto Group, surged 94 percent. Paladin Resources, an Australian company that plans to mine uranium in Namibia, rose ninefold.
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China is preparing to award an $8 billion contract to build four reactors in the world's biggest nuclear power construction program. The country plans to build 27 plants to meet a target of raising nuclear energy output fivefold by 2020. India aims to build 17 reactors to triple nuclear power capacity by 2012.
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"Uranium prices will advance in 2005," said Mitchell at Adit Capital, who also owns Cameco shares as part of the $200 million he helps manage at another fund, Touchstone Investment Managers. "In China, they'll have to build a couple more reactors a year."
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Concern about supply shortages helped increase spot prices of uranium to $20.50 a pound as of Dec. 31, according to Metal Bulletin. That is the highest since 1984, according to a report by Jeff Combs, president of Ux Consulting, based in Roswell, Georgia, which publishes spot uranium prices.
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The spot market, which makes up about 12 percent of uranium sales, according to the World Nuclear Association, sets a price reference for long-term contracts between miners and utilities. Uranium prices rose to a record of more than $40 a pound in the late 1970s, according to Combs at Ux Consulting.
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Contract prices paid by power companies may rise to $27 a pound this year from $20 a pound last year, a National Bank Financial analyst, Ian Howat, said in a Nov. 24 report. Long-term prices may rise to $26 a pound, a Goldman Sachs JBWere analyst, Ian Preston, said in a Dec. 14 report after attending a uranium conference in Sydney.
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"It looks like current prices are here to stay and possibly rise significantly," Craig Kinnell, acting chief executive of Energy Resources of Australia, the world's third-biggest uranium miner, said in an interview Dec. 31.
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"Inventories are falling and there has been little response to that in the way of more mine supply. Our contract prices have risen to reflect the spot price rises."
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China aims to double total power generation capacity by 2020. It needs to add two reactors a year by then to meet a target of generating 4 percent of its power from nuclear plants.
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Demand from China may help uranium prices double in the next two years and may triple demand for nuclear power by 2020, said Quinton George, managing director of Trinity Asset Management. The company owns 18 percent of Afrikander Lease, which holds South Africa's biggest uranium deposit.
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"The supply deficit will affect this market for at least the next 10 years," Geroge said. "In the next two years we could well see uranium touching historical highs, at least doubling current prices."
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China has begun talks with Australia, which holds the world's largest uranium reserves, to enable the fuel to be exported by Rio Tinto, the world's third-biggest miner, and WMC Resources, which owns the biggest d

That's 83 and 82

Thanks Dynofish,


Australia's Uranium Deposits and Prospective Mines:

http://www.uic.com.au/pmine.htm#westmor

73. 73. Fly like a butterfly, sting like a bee.

I'm fortifying my bunker with gold bars, the 5000 day of reckoning beckons.

isnt it like the whole 200o thingy with the comps
self implosion emolation, or just a big fizz dunno, but maybe it will all subside once over and done with lol
counting down with glee
tracker

It's a prophecy come true. The God of Ramping has uranium in his sights, and what can you make with enriched uranium? You guessed it. Not only do we know the end is nigh come 5000, we know how it's going to happen. I shall now line my gold bar fortress with lead.

ABDAB, indeed you are unworthy. Gold has the same properties as lead. This gold that you have accumulated will protect you from the curse of this dreaded uranium. There is no need to purchase this usefull metal lead at high cost. Use up this useless yellow metal against this evil new commer. Your mate MACDUNK

I praise Allah for your wise comments O Scottish One, I will buy more gold to stave off the famine and pestilence that will engulf this world come 5000.