Uranium Investing News

Investors would be hard-pressed to find a better home for nuclear projects than the United States. That’s according to a research report commissioned by the UK government and completed by Ernst & Young. World Nuclear News reported the UK, China, and South Africa are next-best places, in that order. The States leads the pack largely thanks to government backing and financial support.

A summary of the report was presented at a summary of which was presented in London Wednesday, by that country’s department of business and enterprise during an inaugural Financing Nuclear Power conference. Attendees were also told investors are embracing the world’s new nuclear markets with confidence and another presentation of research findings stated nuclear power is the cheapest source of electricity generation, assuming the reduction of carbon costs is a prime objective. Delegates also heard that investors around the world are embracing nuclear power projects because they’re profitable.

Meanwhile, at the 2008 Australasian Institute of Mining and Metallurgy’s International Uranium Conference, delegates heard Australia could have a uranium conversion industry in the next five to 10 years. Uranium conversion—the process of turning Australian-made yellowcake into uranium hexafluoride—is the next logical step for the Australian nuclear industry, which now entertains serious discussions about moving to the next step in the uranium fuel cycle, delegates were told.

Over in Canada, Saskatchewan, the world’s largest producer of uranium, is looking to enter the nuclear power game. Bruce Power, a joint venture spearheaded by local uranium behemoth Cameco, will study the feasibility of a nuclear reactor in the province.

Saskatchewan Premier Brad Wall has is a strong supporter of nuclear power, often comparing Saskatchewan’s uranium reserves to the oilfields of Saudi Arabia. But critics of the plan, including that province’s opposition party, say Bruce Power’s new announcement is a move to turn Saskatchewan and neighbouring Alberta against each other in a race for nuclear power.

Indeed, earlier this year, Bruce Power filed an application with the Canadian Nuclear Safety Commission for approval of as many as four reactors near Peace River, Alberta.
The Canadian Press reported Bruce would begin its analysis this summer and issue a report by the end of 2008.

Finally, the spot price of uranium is holding steady at US$60 a pound U3O8 according to price publisher Tradetech (or at US$59 a pound U3O8 according to rival Ux Consulting), but some investors are getting impatient. It seems a constant and exciting stream of global investing news has yet to boost the uranium market above current—and widely regarded as depressed—levels.

The National Post newspaper, for example, interviewed RBC Capital analyst Adam Schatzker, who argued that if low uranium prices continue, investor will lose patience and look to put their money elsewhere, taking with them the funds required for future exploration and development of the sector.

Schatzker worried the absence of equity market participation in the uranium industry could cause uranium demand to outstrip uranium supply, which could then negatively affect reactor build programs from utilities around the globe. As it stands, uranium bulls will tell you uranium prices are already strengthening. Others expect the usual summer slowdown could hold the metal’s prices down, but feel the return of buying from utilities in the fall will help drive prices upward.