| Taking your electrical needs for granted? A new | | | | versus anything else." And now, the Chinese plan |
| five-year plan announced by the Chinese | | | | to build up a strategic reserve of uranium for |
| government may put the reliability of your | | | | their aggressive nuclear program. |
| electrical supply at risk. China may snap up all the | | | | In another interview, also published in April, Gene |
| available uranium over the next few years. U.S. | | | | Clark, CEO of TradeTech LLC warned us, "In |
| utilities depend upon uranium to power their | | | | reality, the U.S. utilities, which tend to wait longer |
| nuclear reactors, which provide 20% of your | | | | to contract, may be the ones on the losing end |
| electricity. | | | | because the Chinese and the Indians will contract |
| According to China's Ministry of Land Resources, | | | | early. The implication of current group-think is that |
| China plans to build up "sufficient reserves" of | | | | the Chinese and Indians are not going to be able |
| uranium and other minerals, in a new five-year | | | | to find enough uranium for their new plants. But, |
| government plan. The ministry said it would be | | | | they are committing for supplies way out into the |
| stockpiling strategic reserves of uranium, copper, | | | | future. When the U.S. utilities come to the market, |
| aluminum and other key minerals because of rising | | | | they're going to look around say, 'Oh blankety- |
| demand for those commodities. The Chinese also | | | | blank, what happened? Where's the uranium?' |
| wish to avoid supply disruptions by hoarding | | | | They'll be the ones that sat around. I think that is |
| uranium and other minerals, over the next few | | | | what's going to happen unless things really change |
| years. | | | | in the way contracting is done in the United |
| Until now, you've probably taken for granted a | | | | States." |
| steady, reliable source of electricity. A large part | | | | U.S. utilities have been cautioned, warned and |
| of your dependable energy came about because | | | | advised that the Chinese demand for uranium |
| of the nuclear energy generated by the 103 | | | | could very well create a serious energy crisis for |
| nuclear reactors in 30 states. Without a steady | | | | the U.S. grid. Nuclear reactors help supply the |
| supply of uranium to power those nuclear | | | | baseload generation for the U.S. electrical grid. |
| reactors, the U.S. electrical transmission network | | | | Nuclear power plants provide stability to the |
| suffers a 20 percent loss. China's new five-year | | | | electricity transmission network. About one-fifth |
| plan to stockpile uranium had better be a | | | | of electrical generation is derived from nuclear |
| Wake-Up Call to U.S. utilities. If they missed the | | | | power. Nuclear plants are running at more than 89 |
| import of China's announcement, we are all going | | | | percent capacity. U.S. utilities are fiddling around |
| to be in a heck of lot of trouble before this | | | | like Nero, who watched Rome burn, hoping that |
| decade ends. | | | | promises of increased uranium production will |
| Since June 2004, we have warned of supply | | | | stem the dramatic uranium price rise. |
| disruptions for uranium. David Miller, who has since | | | | Severe strains in natural gas supplies, combined |
| become President and Chief Operating Officer of | | | | with the ongoing uranium supply squeeze, could |
| Strathmore Minerals, argued at the time, "In my | | | | very well put U.S. consumers on rations for their |
| opinion, no one has any extra uranium to sell on | | | | electricity. Can't happen, you say? Ask the Brits |
| the spot market. There's just not excess | | | | about how business was conducted in their |
| inventory that people are unloading in the spot | | | | country, in late 1973 and early 1974, during the |
| market." We interviewed Miller again in November | | | | Arab oil embargo crisis. Or more recently, |
| 2005, for an article entitled, "China Demand for | | | | California's rolling brownouts. |
| Uranium, World Growth in Electricity Demand to | | | | An electrical energy crisis is in the making, while |
| Drive Uranium Price Higher." Miller warned us, | | | | U.S. utilities are patiently hoping or praying the |
| "China is the future wild card… what they | | | | price of uranium stop climbing. UxC President Jeff |
| are planning for nuclear is probably the most | | | | Combs wasn't kidding when he urged U.S. utilities, |
| aggressive program in the world." Miller added in | | | | during our interview, to "support the expansion of |
| his explanation, "All the new production is already | | | | (uranium) production in the United States." And if |
| factored into the future market for uranium. | | | | you don't let your local utility know about the |
| We're underwater right now without building one | | | | upcoming electrical energy crisis, then perhaps it |
| more nuclear power plant." | | | | will be your lights they may someday be turning |
| In mid April, during an interview with Sprott Asset | | | | out. The irony of ironies: All of those sweet |
| Management Market Strategist Kevin Bambrough, | | | | anti-nuclear folks in Vermont, who depend upon |
| we asked him about the Chinese. He answered, | | | | nuclear energy for more than 70 percent of their |
| "Why shouldn't they have strategic uranium | | | | electricity? They'll be the first to suffer the most, |
| reserves to supply their nuclear reactors? It | | | | if U.S. utilities don't respond to China's five-year |
| makes sense to have a good stockpile of uranium | | | | plan. |
| considering the relative cost of nuclear power | | | | |