The spot price of uranium tumbled US$2 to US$69 a pound U3O8 this week, after price publisher Tradetech reported just four transactions in the spot market, with supply exceeding demand by about 50 percent.
The publisher stated that although recent purchases have absorbed some supply from the market, new supply continues to emerge, exerting downward pressure on the spot market.
Rival price publisher Ux Consulting agreed with Tradetech, dropping its uranium spot price US$3 to US$68 a pound. After this latest drop, the price is now sitting at half of last summer’s high of $136 a pound; the metal’s spot price has now receded to levels seen at the end of 2006, before the parabolic rise and fall.
Reuters reported there’s no immediate demand from utilities on the spot market, and their absence makes prices soft. After a slump in late 2007, spot price activity picked up again in February and March, with buyers willing to pay more than $70 per pound U3O8, but they’ve since disappeared.
Bloomberg reported the current spot slump has to do with increased uranium output from Australia, Kazakhstan, and Russia combined with a slump in the US economy. Of course, the metal’s long-term price remains steady at $95 a pound, as it’s done for nearly a year now, which suggests demand is healthy in the term market.
This week also saw another chapter in the story of resistance to uranium mining, in Nova Scotia, Colorado, and New Mexico. Nova Scotia banned uranium exploration in 1982, after rural residents complained about environmental risks associated with that industry. According to CBC News, the Nova Scotia legislature has just reaffirmed its support for the moratorium.
A standing committee passed the motion unanimously even after the Mining Association of Nova Scotia, that province’s main mining association, gave a two-hour presentation on why the ban should be lifted. Interestingly, the new motion also called on the province to think about what would happen to exploration for other minerals if one of those projects were to find uranium.
It seems that decision falls on the shoulders of Nova Scotia’s provincial government, which is now expected to appoint a committee to review whether it's possible to mine other minerals without disturbing uranium deposits.
The Chronicle Herald newspaper reported MLAs from all parties agreed Tuesday Nova Scotia should consider changing the ban on uranium exploration to allow companies to look for other minerals.
Other opponents of the ban feel Nova Scotia is sacrificing millions of dollars in possible exploration revenue by banning uranium mining. They argued that Nova Scotia spends just $10 million a year on mining exploration, compared to the $160 million spent in Newfoundland. The latter houses many uranium exploration projects.
Last week, Labrador’s Nunatsiavut Government voted eight to seven in favour of a three-year moratorium on uranium mining on Labrador Inuit Lands, which caused massive stock slides of companies heavily invested in that region.
It’s worth noting there’s no mining taking place in Labrador today and none scheduled in the next three years. Furthermore, the ban still allows for uranium exploration activities to continue, but the decision was nonetheless a shocker to Canadian junior explorers invested in the region, whose investors worried it could derail plans for proposed mining projects.
That ban is regarded as a way to stall uranium mining in Labrador until the Nunatsiavut Government, the Government of Newfoundland and Labrador, and regional planning authorities agree upon a land-use plan for the region.
Moving on to Colorado, which is getting closer to tightening uranium mining regulation after a bill aimed at doing so received unanimous (7-0), bipartisan support at that state’s Senate Local Affairs Committee this week. Under the legislation, uranium miners would need to prove they could return groundwater to either pre-mining conditions or levels in line with existing state standards.
The move was fuelled by concerns that a proposed uranium mine northeast of Fort Collins—which is to use in-situ leaching, a process where water and chemicals are injected into the ground to buoy uranium to the surface—could pollute groundwater in the region. The bill, dubbed HB 1161, now heads to the Senate Appropriations committee before returning to the floor for a second round of votes.
Then on Friday, the US Nuclear Regulatory Commission faced the announcement of an historic challenge in federal appeals court for its approval of a license for an in-situ leach uranium mine. The opposition comes from the Navajo communities of Crownpoint and Church Rock in New Mexico, who plan to fight the commission and the permitted company to stay off Navajo lands.
Now let’s talk long term, where the news is largely positive, thanks to the continued growth of acceptance of nuclear power in the global energy sector as shown by ever-increasing investments in nuclear energy.
A $3.5 billion uranium enrichment plant near Piketon, Ohio, is another step closer to being built. The company in charge of the project said Thursday it has finalized the plant’s initial machine plans.
According to the Associated Press, USEC Inc. (NYSE: USU, Bullboard) of Bethesda, Maryland, says its testing program is finding reliable and consistent operations. Demonstrating the new technology and securing financing for the plant are the next steps.
Company officials expect the plant to start operating in late 2009. Come late 2012, the plant is expected to be in full production, with 11,500 centrifuges enriching uranium to be used in nuclear power plants for electricity generation. Centrifuges are much more efficient in enriching uranium than the gaseous diffusion methods developed in the 1950s.
That news broke the same day as US President George Bush announced he has put the United States on a path to slow, stop, and reverse the growth of greenhouse gas emissions by 2025—with the help of nuclear power.
Bush pointed to billions of dollars the US has already invested in nuclear technologies and called for addressing regulatory and political barriers between the nuclear sector and new technologies.
In other industry news, GE-Hitachi has withdrawn from the nuclear procurement process in Ontario, citing the need to focus on licensing efforts with the US Nuclear Regulatory Commission and on existing customer commitments.
That leaves Areva (OTO: ARVCF, Bullboard), Atomic Energy of Canada Limited (AECL), and Westinghouse participating in the next step of the process.
Hitachi’s (NYSE: HIT, Bullboard) withdrawal comes fast on the heels of AECL’s decision to withdraw from a design assessment process in the UK to focus on Canadian opportunities. The vendors still in the running to grab future UK nuclear contracts are Areva, GE-Hitachi, and Westinghouse.
Ontario’s procurement project is part of a 20-year energy plan launched by Ontario’s provincial government in 2006, which called for maintaining that province’s 14,000 MWe of nuclear capacity. Given that a number of plants are now facing retirement, new ones will have to be build to share the load.
In the UK, that country’s Nuclear Installations Inspectorate will examine the three remaining designs concurrently. Once a design is accepted, a hopeful builder would then secure a site certification and make a formal application to build a plant.
And the US and UK aren’t the only ones enthused about nuclear power this week. According to World Nuclear News, EU energy commissioner Andris Piebalgs told the European Nuclear Assembly in Brussels this week that nuclear energy is vital in the world’s fight against climate change.
He also added that investment is vital in replacing Europe’s aging power reactors, many of which will reach the end of their life cycles come 2030. Piepalgs feels fresh investment is a necessary ingredient to maintaining safety and security and thus public and political acceptance of Europe’s nuclear industry.