| One bonus of the global recession is that it wiped | | | | reliable supplies must needs look to the “Big |
| a lot of incompetent hedge fund managers and | | | | Three.” |
| energy speculators from the canyons of Wall | | | | Kazakhstan contains the world's second-largest |
| Street. As the Gordon Gecko sycophants regroup | | | | uranium reserves, estimated at 1.5 million tons. In |
| and look for the next Big Thing, maximizing profit | | | | 2006 it produced 5,279 tons of uranium, 21 |
| while minimizing risk, the landscape looks very | | | | percent more than in 2005. |
| different than it did a year ago. In such a climate, | | | | But Kazakhstan has ambitious plans to massively |
| it is uranium, not oil and natural gas that would | | | | boost its output of the silvery metal, as |
| seem to have the brightest future for one simple, | | | | evidenced by this year’s production. |
| overriding capitalist principle – supply and | | | | Kazatomprom, the country's national nuclear |
| demand. | | | | corporation, said in a press release last month |
| Whatever agreements are reached at | | | | that the country boosted uranium output an |
| December’s global climate warming summit in | | | | eye-watering 61 percent year-on-year in |
| Copenhagen, they can only boost uranium’s | | | | January-September to 9,535 tons, 3 percent |
| appeal, as the carbon footprint of a nuclear power | | | | above the government’s target for the |
| station consists primarily of the carbon cost of | | | | period. Part of the reason for |
| mining uranium fuel, not a nuclear power plant | | | | Kazakhtatomprom’s success was opening |
| (NPP)’s operation. According a University of | | | | five new mines last year. According to |
| Wisconsin study, NPPs only emit about 17 tons of | | | | Kazatomprom’s statistics, global uranium |
| carbon dioxide per megawatt, little more than | | | | output in 2009 is projected to be 11,000 tons in |
| wind and geothermal power, the lowest sources. | | | | Canada, 9,430 tons in Australia and 12,800 tons in |
| In contrast, coal has the highest carbon emissions | | | | Kazakhstan. |
| at about 1,000 tons per megawatt. Accordingly, | | | | Kazakhstan is not only increasing its mine |
| expect to see many nuclear power cheerleaders | | | | production, but moving to develop fuel fabrication |
| emerge in Copenhagen. | | | | facilities in an effort to move from mining to the |
| Consider – two years ago, London’s | | | | higher value-added production of nuclear fuel |
| World Nuclear Association in May reported that | | | | fabrication. |
| worldwide, 256 reactors were either in the | | | | Kazakhstan’s nuclear fuel issue will be of keen |
| planning stage or under construction. Even Ukraine, | | | | interest in Moscow, as it is currently a world |
| site of the infamous 1986 Chernobyl disaster, has | | | | leader in the technology. Despite its technological |
| announced plans to build 22 new nuclear power | | | | mastery, unlike its dominant position in the |
| stations, while the United States, site of the 1979 | | | | world’s oil and natural gas market, |
| Three Mile Island partial meltdown accident, has 23 | | | | Russia’s footprint in the global uranium market |
| reactors being proposed. These new reactors | | | | remains relatively small. Russian state holding |
| would be in addition to the 439 nuclear power | | | | company Atomprom is the world’s |
| reactors worldwide in 31 countries generating | | | | seventh-largest holder of uranium ore reserves, |
| 372,000 megawatts reported by the International | | | | the third-largest producer of nuclear fuel but only |
| Atomic Energy Agency, an increase of 58 | | | | the world’s fifth-largest miner of uranium. |
| percent, all needing fuel. | | | | Current Russian production is only 3,000 metric |
| According to the Wall Street Journal on | | | | tons of uranium ore out of an annual requirement |
| November 29, “Iran announced a massive | | | | of 18,000 metric tons. |
| expansion of its nuclear program. President | | | | Russia's oldest operational nuclear power facility, |
| Mahmoud Ahmadinejad unveiled in a cabinet | | | | Novovoronezh-3, came online in 1971. The Russian |
| meeting plans to build 10 more nuclear facilities for | | | | Federation now operates 10 nuclear power plants |
| enriching uranium.” | | | | with a total of 31 reaktor bol'shoi moshchnosti |
| The nuclear issue even impacted last year’s | | | | kanalnii reactor units, which supply approximately |
| U.S. presidential election, as Republican nominee | | | | 16 percent of Russia's energy needs. Except for |
| John McCain committed his administration, if | | | | the Bilbino Nuclear Power Plant in eastern Siberia, |
| elected, to begin planning for the eventual | | | | the other nine complexes are all located in |
| construction of 45 new nuclear power plants in | | | | European Russia. Putin’s administration is |
| the United States by 2030, twice the number | | | | committed to expanding Russia’s nuclear |
| currently on the drawing boards. | | | | energy use, noting in his 2007 annual address, |
| Europe is also interested in expanding its nuclear | | | | “Over the entire Soviet period, 30 nuclear |
| power industry, which represents 45 percent of | | | | power plant units were built, but we plan to build |
| the world's currently operating nuclear facilities and | | | | 26 such units over the next 12 years, and to do |
| 33 percent of new reactor construction. European | | | | so using the most advanced technology |
| nations currently operate 197 nuclear power | | | | available.” |
| plants generating 169,842 megawatts, and 12 | | | | As with its oil industry, Kazakhstan has actively |
| European countries are planning or considering | | | | courted foreign investment for its mining |
| proposals for up to 67 additional reactors. | | | | operations. Kazakhstan has signed multiple |
| The story is the same in Asia. South Korea relies | | | | contracts, including technology transfer |
| on nuclear energy to produce 45 percent of the | | | | agreements, with companies from Canada, Japan, |
| country’s electricity and Japan is not far | | | | France, and China. The world’s leading |
| behind, relying on nuclear power for 30 percent of | | | | producer of uranium oxide, Canada’s Cameco, |
| its energy needs. | | | | has a 60-percent share in Kazakhstan’s Inkai |
| Asia’s economic powerhouses China and India | | | | uranium mining operation, while the state atomic |
| are interested in nuclear energy as well. India is | | | | energy agency, Kazatomprom, the world’s |
| increasingly interested in nuclear electrical power | | | | fourth-largest producer, also has a stake in Inkai. |
| generation despite the fact that nuclear currently | | | | Nor is the investment one way; Kazatomprom, |
| accounts for a paltry 3 percent to 4 percent of | | | | flush with cash, has proposed purchasing a |
| the country’s power needs; India has 19 | | | | 10-percent stake in the U.S. company |
| planned and proposed nuclear power reactors. | | | | Westinghouse Electric. |
| Like India, China is a relative newcomer to nuclear | | | | While the price of uranium in the last several |
| power generation, deriving only 2.3 percent of its | | | | years has been volatile, the overall trend of the |
| electricity from nuclear power, compared with the | | | | last decade has been strongly upwards. In 2001 a |
| United States' nearly 20 percent. Of China's 11 | | | | pound of uranium sold for between $5 and $10. |
| current NPPs; the oldest, Qingshan-1, only came | | | | Current prices in the spot uranium market have |
| online in 1991. China's Commission of Science | | | | trended between $40 and $50 all year after |
| Technology and Industry for National Defense in | | | | having soared to $140 along with oil in 2007. The |
| its 11th Five-Year Plan for the Nuclear Industry | | | | 2007 price resulted from the end of Russian |
| said China will prospect for and develop indigenous | | | | dumping, surging apparent increases in demand |
| uranium deposits in order to expand the | | | | plus massive liquidity via hedge funds and |
| nation’s ability to produce 40 gigawatts of | | | | participation certificates, plus, combining with the |
| nuclear power electrical generating capacity by | | | | difficulty of valuing uranium stocks. Despite these |
| 2020. | | | | variables, given the projected construction and |
| Further accelerating China’s move towards | | | | demand of NPP plants worldwide over the next |
| nuclear power, on 26 November Prime Minister | | | | decade, even a cashiered Wall Street analyst |
| Wen Jiabao announced his country’s plan to | | | | might be able to conclude that the price trend is |
| cut carbon-emissions intensity 40 to 45 percent | | | | likely to be upwards. |
| by 2020 compared to 2005 levels. Carbon | | | | Rio Tinto's listed uranium subsidiary, Energy |
| intensity is the emissions produced per unit of | | | | Resources of Australia CEO Rob Atkinson, |
| economic output, and in order to meet the target, | | | | recently commented in The Australian that |
| China is apparently committing itself to | | | | current relatively low uranium spot market prices |
| implementing ambitious energy-efficiency and | | | | combined the effects of the global recession are |
| fuel-switching policies. Since most renewable and | | | | hampering mine development in a number of |
| alternate non-fossil energy is in the power sector, | | | | countries, setting the scene for a future uranium |
| this would mean a much higher percentage of | | | | shortage, noting, “Given production issues that |
| China’s total electricity generation to meet | | | | are going on across the world and the |
| these goals will need to come from non-fossil fuel | | | | (longer-term) demand from power stations, spot |
| sources, including renewables and nuclear energy. | | | | prices seem a bit out of kilter at the |
| To be on the safe side, China is also developing a | | | | moment.” Atkinson’s comments echoed |
| national uranium reserve, to commence in 2010. | | | | an earlier report, as the Royal Bank of Canada |
| Despite Beijing’s ambitious attempts to | | | | Capital Markets noted in a study, "Investing in |
| expand uranium production in Xinjiang and | | | | Uranium Companies," that a supply gap will exist in |
| elsewhere however, local sources will be | | | | uranium after 2013. As |
| insufficient to meet domestic needs despite | | | | NPPs are licensed to run for 40 years, with many |
| country-wide prospecting. Analysts predict that | | | | re-licensed for another 20 years, new NPPs will |
| within less than a decade China's planned nuclear | | | | not be replacing existing plants, but only adding to |
| power reactors will consume 44 million pounds of | | | | demand. |
| uranium annually, as more than 16 provinces, | | | | Kazakhstan’s nuclear policies have won it |
| regions and municipalities have announced | | | | plaudits in the international community, beginning |
| intentions to build nuclear power plants within the | | | | when it voluntarily relinquished its Soviet-era |
| next eight years -- a total of 77 planned and | | | | nuclear arsenal. Now the IAEA is considering |
| proposed new reactors. | | | | Kazakhstan’s proposal to host a nuclear fuel |
| The revival of interest in nuclear power in the | | | | bank on its territory, a gesture that might yet cut |
| wake of record high oil prices and despite | | | | the international Gordian knot of Iran’s civilian |
| environmentalists’ opposition will prove a boon | | | | nuclear program. |
| for uranium-producing nations. Current global | | | | In short, Kazakhstan is fast becoming a major |
| production of uranium is approximately 40,000 | | | | player on the world nuclear stage, even in the |
| tons annually. The math of the analysts quoted | | | | diplomatic sphere and its potential to increase its |
| above on China’s needs means that without | | | | share of the world’s uranium market is a |
| increased production, China alone would consume | | | | certain bet over the next few years, as it has its |
| 55 percent of current world output within a | | | | influence in the global oil market. Its |
| decade. | | | | government’s relative stability and investor |
| Canada currently leads world production, with 25 | | | | friendly climate are added pluses, but for those |
| percent of the world's output, followed by | | | | Wall Street Masters of the Universe disinclined to |
| Australia. Kazakhstan is currently the world's | | | | deal with President Nazarbayev’s regime, |
| third-biggest uranium miner. The three countries | | | | there are always profits to be made in Namibia |
| currently account for more than half of global | | | | and Niger. |
| uranium production. Other uranium mining nations | | | | And, of course, China, Japan, South Korea and |
| include the United States, the Russian Federation, | | | | India are only too willing to pick up the slack. |
| Portugal, Namibia and Niger, but those seeking | | | | |