‘Uranium shortage serious issue’

NEW DELHI: Reiterating their total opposition to the India-U.S. civilian nuclear cooperation, the Left parties on Friday said their discussions with the government were still going on.

“At the last meeting of the UPA-Left joint committee on the nuclear deal, we were told that there is a shortage of uranium and reactors were working at 50 per cent of their level of production,” Communist Party of India (Marxist) general secretary Prakash Karat told reporters here.

The next meeting of the committee on the nuclear deal is scheduled for May 28. “We have not yet completed our discussions with the government on the IAEA safeguards. We have not gotten the text of the agreement but have studied whatever we could get hold of. We have to see what the government says and then decide,” Mr. Karat said.

After a meeting of the four Left parties that reviewed the progress of the discussions on the nuclear issue with the government, Mr. Karat said the government was trying to convey through the media that in the absence of the India-U.S. nuclear deal the country was not getting enough uranium to operate the reactors.

“We are unable to understand how the shortage is taking place. The government is conveying a picture that the Indian nuclear energy programme is short of fuel and only the India-U.S. nuclear deal can bail India out of this shortage. External Affairs Minister Pranab Mukherjee, Convener of the UPA-Left Committee on the nuclear deal, made such remarks while stating the case for seeking the IAEA Board’s approval for the India-specific safeguards agreement,” Mr. Karat said.

He said the question was if the shortage of uranium was a temporary one or created through lack of proper planning.

“Neither the Department of Atomic Energy nor the government has given the nation any explanation of how this current shortage has come about, when we have known reserves in the country to sustain a nuclear energy programme of at least 10,000 MW,” a statement by the Left parties said.

The shortage of uranium was a “serious issue” for which the government owed an explanation to the country, the Left parties said.

It was disturbing to “paint the temporary shortage as a permanent scarcity in order to push the India-U.S. nuclear deal.”

They sought clarification from the government as to what it was doing to address the gap between the demand for uranium and supply.

Demand has outstripped supply by 139%, and it’s growing by the day.
In fact, uranium production is near an all-time low. The reasons are simple: After the Cold War, nuclear arms production ground to a halt. There was enough uranium to feed existing reactors for many years. And, in 1993, the U.S. signed a deal with Russia to feed U.S. nuclear reactors from dismantled Russian warheads.
So uranium prices fell … It became economically unfeasible for companies to speculate on new mines or processing operations. The market just dried up…
But now ready-to-use uranium is at an all-time low, and uranium producers haven’t moved nearly fast enough to take advantage of the soaring demand. The commercial reserves that were expected to fuel reactors for “many years” fell by more than 50% in less than 20 years, according to International Nuclear, Inc.
Unlike oil, there just isn’t enough uranium to go around … and so the market forces that quintupled the price of uranium in the last five years show no signs of slowing down.
And the World Nuclear Association estimates that it will take eight years for a new mine to go
“online” and produce quality uranium, assuming that the company can find a viable supply to mine. This puts an extra-high premium on the biggest and most efficient uranium mines that already have plenty of capacity in place.

http://www.investmentu.com/research/uraniumstocks.pdf

Disclaimer: I am invested heavily in the Uranium sector

I too am heavily invested in Uranium -- just got in last month.

Over the last decade, the world has been using nearly 200 million pounds of Uranium per year, but only mining about 100 million pounds. The difference has been made from decommissioning Cold War nuclear warhead stockpiles. These stockpiles are running out over the next few years.

Meanwhile, with the (fraudulent but affective) global warming concerns and with the massive upswing in the economies of China and India, and the overall general economic prosperity of the last two decades, there has been an increasing need for new sources of energy.

China for example has been buying up exclusive long term contracts for uranium around the world, in anticipation of moving an increasing percentage of their energy needs to nuclear power. India has been unable to keep its nuclear power plants at full power, for lack of enough uranium.

With the recent spike in oil prices, this has become acute again, leading to discussions around the world of building more nuclear power plants, and to an upswing in Uranium stocks.

The following numbers come from a the September 2007 Update to the Uraniumletter International. Beware the strange typos throughout the report, such as Chernobyl stated as happening in 2006, not 1986, and Three Mile Island in 1929, not 1979.

As of March 2007, there were about 400 nuclear power plants in production. One to a few hundred more plants will likely be built in the next decade or two. Each new plant needs 1 or 2 million pounds of uranium, for the initial load and startup inventory, and about a half million pounds per year ongoing.

Combined with the existing shortfall in Uranium production, and the dwindling stockpiles from the Cold War, we are facing a major shortage of Uranium production.

There is plenty of Uranium in the ground; I see various estimates that there are 50 to 100 years of known uranium reserves in the ground, at the current planned rate of expansion of nuclear installations. The shortfall is in the mining and production of the uranium, not in the known reserves.

Currently coal provices 40% of the worlds energy needs, hydro 19% and nuclear 16%.

A key factor for investors will be when and to what extent the demand for Uranium outruns the supply. As we've already seen, the long lead times in new Uranium mining and new nuclear power plants lead to dramatic short term instabilities in the price. Us little investors are like mice, attending the mating of two old elephants. One can become much richer, or much poorer ;).

China to buy Australian uranium (BBC, April 2006)

Australia and China have signed a nuclear deal allowing Beijing to import Australian uranium for power stations.

The agreement was signed under the gaze of both countries' prime ministers.

Australia, which has 40% of the world's known uranium deposits, sells uranium only to members of the Nuclear Non-Proliferation Treaty.

Australia has three working uranium mines, one in a national park

World Uranium Mining (World Nuclear Assoc, July 2007)

Over half of the world's production of uranium from mines is from Canada, Australia and Kazakhstan.
An increasing proportion is produced by in situ leaching.
After a decade of falling mine production to 1993, output has generally risen since then and now comprises 61% of demand for power generation.

Canada produces the largest share of uranium from mines (25% of world supply from mines), followed by Australia (19%) and Kazakhstan (13%). Australian and Canadian production was depressed in 2006 due to particular problems.

Western World Uranium Production and Demand 1945-2004

Exposed: The World's Best Kept Uranium Secret (Stock Interview, April 2006)

World Mine Production by Country, 2002

State of the Industry Review: Uranium (Global InfoMine, June 2007)

Since the development of the first atomic bomb in the 1940's by the US government, uranium has become a critical, peaceful energy source. Indeed, concerns over shortage of oil and gas with resulting high prices in these fossil fuels, along with environmental issues regarding greenhouse gas emissions, has fuelled a new interest in nuclear energy as the source of power to meet current and future global demand for electricity. p> Over 40,000 tonnes was produced in 2004, the two largest producers being Canada (29%) and Australia (22%). Cameco, a Canadian company and the world's current largest uranium producer, produced over 8,000 tonnes. The future, however, is centered more on Australia which contains 28% of known reserves, followed by Kazakhstan (18%).

Read the complete uranium industry review, courtesy of Uraniumletter International.

Uranium Mining Is Important for Securing America's Energy Future (The Heritage Foundation, March 2008)

Increasing Demand for Uranium

Increasing production of nuclear power and higher production efficiency (which results in more fuel usage) inevitably mean a higher demand for uranium. Uranium production from mines eclipsed 39,000 tons in 2006. According to the World Nuclear Association, uranium requirements for fuel reactors could surpass 100,000 tons by 2020. Given that more than half of the world's uranium production comes from three countries, the U.S. faces substantial incentives to increase access to domestic uranium mining.

A nuclear renaissance is emerging worldwide. Countries like the United Kingdom, China, India, and Russia are planning significant expansions of nuclear energy; other nations are also planning new reactors. Indeed, some 35 reactors are under construction today throughout the world. U.S companies are planning to build up to 30 new reactors--though none have actually started construction.

From my favorite analyst, James Dines, a report on Uranium from last year, at The Bull and Bear:

Uranium prices have soared to new all-time time highs continuing what James Dines, editor of The Dines Letter predicts will be one of the greatest bull markets in economic history.
Dines turned bullish on uranium in the mid-1990s leading his subscribers into uranium-mining stocks.
“Each of us should work to get our political leaders to grasp that wind power won’t work when the wind stops, and that solar is useless at night, so nuclear should not be an afterthought but the main theater. The world is about to switch to nuclear whether it likes it or not, knows it or not, recognizes it or not,” says Dines. Here’s the latest from “The Original Uranium Bug”
       “The second phase of our prediction is based on the fact that nuclear power already produces 16% of the world’s electricity, in 442 nuclear-powered reactors, with around 250 new plants already being built – and we stand by our old prediction that thousands will be constructed so as to create fantastic demand for uranium. By humanity’s sheer luck the fact of the matter is that There is enough uranium for centuries to come. That there is so much uranium around is the really great news, because without it humanity would be SOL. But it’s no simple matter to build a uranium mine, which can take anywhere from 5 to 10 years, not to mention the processing of the uranium and building the infrastructure for example to switch automobiles to non-polluting hydrogen power.
       “That is why, when we first began to recommend uranium-mining stocks, they were in the basement, flat on their backs, selling for pennies, the vast majority of Analysts skeptical that they would survive or that the world would ever change enough to accept nuclear power – and some of you have already informed us that you have made fortunes. Laramide for example rose from 10 cents (Cdn) in Aug 2003 to as high as $11.24 (Cdn) on 24 Jan 07, a mind-blowing gain of 11,140%; $1,000 would now be worth $112,400! Mega Uranium has been one of our favorites. First recommended two years ago, it has returned a stunning profit, a $10,000 investment would now be worth around $1,924,000.

A Veritable Tsunami of Profits

       “So is it “too late to buy” uraniums? We still believe that this uranium bull market will be recorded as a veritable tsunami of profits, with money enough to be made for everybody, and that we are nowhere near a Top Formation because “The Coming Uranium Buying Panic” has only just begun.
       “Those are two of the great phases that we foresee: first the recognition of global warming as a major milestone, and next the shift from fossil fuels to nuclear fuels. But what does that portend for oil? Are prices going to crash? We very much doubt that, despite near-term weakness, and that ties into our geopolitical discussions that are important in forming our judgments about energy? The war for the last drops of oil has already begun, and countries such as Russia, China and India and Japan will not be willing to stand aside and let America keep the lion’s share of an asset that is in their own backyards. America cannot seriously hope to combat all the armies on the Eurasian landmass, so it should be assumed that America will be pushed out at some point, back to our own and long-neglected hemisphere. The Middle East will still be the most valuable real estate on the planet, at least until our prediction that Australia takes its rightful place as the Saudi Arabia of nuclear energy comes true, along with Canada. It would be ridiculous to assume that motorists would be allowed to use the last drop of oil, so we have for decades predicted that governments would ultimately seize all remaining supplies for military purposes; indeed, Russia has already called a “strategic asset” that is increasingly off limits to foreigners. But the geopolitical world is also confronted by civil wars within every religion on the planet, already having broken out in Iraq, Gaza and Lebanon, as examples of the mitotic polarization going on worldwide. For the Muslim world to be convulsed by a savage civil war between what we call the “orthodox” and the “seculars” – we here at The Dines Letter are strictly neutral – means that oil supplies could be cut off at any moment, either by terrorism or vituperative anger from nations such as Iran and Venezuela. In other words, not only would it take decades to switch to nuclear power, but we could not even be assured of oil while in the transition to it!”

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.