COMMENTARY—ProspectingJournal.com—What’s going on with the Chinese and uranium? If you haven’t heard, the Chinese recently announced that they have created a new technology that will make nuclear materials 60 times more efficient. This amazing recycling technology, conveniently a well-guarded “secret,” would enable uranium materials in China to fuel the country for a few centuries, instead of the currently projected 30-50 years.
“With the new technology, China’s existing detected uranium resources can be used for 3,000 years,” claimed China Central Television. “We’re among the few countries that can implement the recycling of nuclear fuel. As such, we, to some extent, lead the world in this field.”
That’s some technical wizardry! Which is why it could be geopolitical bluffing, an attempt to confuse the market. Perhaps they believed that an outrageous claim like this would spark a massive sell-off. Although the Chinese media reported the claim, Lin Boqjang, Director of the China Centre for Energy Economics Research at Xiamen University, said the technology is still at an early stage.
If markets had believed this technological claim, the price would have nosedived. Instead, the announcement saw the spot price rise, fall, repeat. Overall, not much has happened:
Until the technology comes into being, China needs uranium–now. With 12 nuclear power plants currently operating and another 25 mega plants under construction, uranium demand is expected to reach 20,000 tonnes annually by 2020 (China will only be able to produce 2,400 tonnes by then). China’s Nuclear Energy Association said that it will boost economic capacity by up to 8 times by 2020, while India’s Atomic Energy Commission said it is shooting for 13 times current levels by 2030: between the two giants, this means they will lead an estimated 46 percentage increase in uranium consumption by 2020.
So, once again, now is a good time to be looking into uranium stocks. Canada’s Cameco recently announced its plans to increase production in Australia by nearly a third, which will help the Company reach its goal of doubling uranium by the end of the decade. As Cameco now accounts for 14% of global uranium production, their ambitious production target puts them at odds with China’s so-called technology. Rio’s recent acquisition of Hathor Exploration in the Athabasca Basin has also stirred up hopes that a revived uranium industry is around the corner. And Uranium One also announced that its quarterly production rose 62 percent, with most coming from its mines in Kazakhstan.
For uranium explorers and producers, China’s announcement sounds more like a plea to bring the price of uranium down, something nobody wants after the massive drop in 2011. Judging by the production targets for the major producers and the growing activity from the exploration sector, I am betting on a steady comeback for the nuclear commodity, as energy demand pushes prices up and China is forced to pay more.
China’s Uranium “Miracle”: A Pump to Dump?
COMMENTARY—ProspectingJournal.com—What’s going on with the Chinese and uranium? If you haven’t heard, the Chinese recently announced that they have created a new technology that will make nuclear materials 60 times more efficient. This amazing recycling technology, conveniently a well-guarded “secret,” would enable uranium materials in China to fuel the country for a few centuries, instead of the currently projected 30-50 years.
“With the new technology, China’s existing detected uranium resources can be used for 3,000 years,” claimed China Central Television. “We’re among the few countries that can implement the recycling of nuclear fuel. As such, we, to some extent, lead the world in this field.”
That’s some technical wizardry! Which is why it could be geopolitical bluffing, an attempt to confuse the market. Perhaps they believed that an outrageous claim like this would spark a massive sell-off. Although the Chinese media reported the claim, Lin Boqjang, Director of the China Centre for Energy Economics Research at Xiamen University, said the technology is still at an early stage.
If markets had believed this technological claim, the price would have nosedived. Instead, the announcement saw the spot price rise, fall, repeat. Overall, not much has happened:
So, once again, now is a good time to be looking into uranium stocks. Canada’s Cameco recently announced its plans to increase production in Australia by nearly a third, which will help the Company reach its goal of doubling uranium by the end of the decade. As Cameco now accounts for 14% of global uranium production, their ambitious production target puts them at odds with China’s so-called technology. Rio’s recent acquisition of Hathor Exploration in the Athabasca Basin has also stirred up hopes that a revived uranium industry is around the corner. And Uranium One also announced that its quarterly production rose 62 percent, with most coming from its mines in Kazakhstan.
For uranium explorers and producers, China’s announcement sounds more like a plea to bring the price of uranium down, something nobody wants after the massive drop in 2011. Judging by the production targets for the major producers and the growing activity from the exploration sector, I am betting on a steady comeback for the nuclear commodity, as energy demand pushes prices up and China is forced to pay more.
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Chris Devauld
ProspectingJournal.com