Uranium’s reaction to a nuclear future

The uranium market’s roller-coaster ride has left many investors with their fingers burnt, and has raised questions about whether the so-called nuclear renaissance – a push by governments around the world to build new nuclear power stations – will be economically viable.

John Busby, who wrote ‘After Oil’, a report on alternative sources of energy, said the experience of sky-high uranium prices over the past couple of years could put off private enterprises from constructing new nuclear power stations.
“Generators will be hard put to find the fuel for the current fleet of nuclear power stations, let alone to supply new entries to their fleets.

Lack of uranium is likely to be the main factor in the discarding of the nuclear renaissance,” Busby said.

Some analysts say that while there has been welcome relief for buyers of uranium in the past few weeks, its price is still high by historic standards.

And the swings in price will be unattractive for the nuclear industry, which invests billions of pounds to build reactors which last for 50 or more years.

Bulls in the uranium market believe its price will rebound, though probably not to the heady levels of earlier this summer.

Gary Stoker, marketing manager for Nufcor International, the world’s biggest uranium trader and a shareholder in Nufcor Uranium, said: “The price got a bit frothy, accelerated by what was happening in the wider market, but the fundamentals have not changed.”

These fundamentals, according to Stoker, are that demand for uranium will continue to climb but 40 per cent of supply by about 2012 will depend on new mines which have yet to be constructed.

“There is a lot of speculation in those production plans,” Stoker said.

Namibian