Cameco delay means u3o8 shortfalls until 2011Cameco delay means uranium supply shortfalls until 2011
Publisher: U3O8.biz
Cameco Corp.'s flooded Cigar Lake will remain flooded longer than expected. So said a company news release Wednesday. The mine, which flooded last October, will now take until 2011 to come back online. Given the news of recent days, it's a serendipitous turn of events. Remember the talk about bottlenecks a few days ago when a rebel army captured a Chinese uranium executive in northern Niger and the area was declared a war zone?
The increased instability in the area was expected to bring uranium production to a standstill in the Akouta and Arlit mines, which, according to the World Nuclear Association, produced roughly 3,400 tonnes of uranium last year---more than eight per cent of global production. The incident brought comparisons in the media to the flooding of the Cameco mine, which flooded and put a squeeze on uranium supply last year.
Well, the Tuareg-led rebels released the executive Tuesday... but talks of supply squeezes continue with Wednesday's Cameco announcement. If the 2011 timeline is correct, global uranium production is expected to drop by nine million pounds through 2010.
Can you say Schadenfreude? Supply has caught up with demand for now and a squeeze from the world's largest publicly traded uranium producer could be just what the doctor ordered for investors, given its likelihood to boost uranium prices.
The Cameco news didn't break until just before 7pm EST Wednesday, but company shares fell by $1.50 to close at $52.83 on the TSX. They fell a further 68 cents to close at $52.15 Thursday.
In other news, Australia may be closer to seeing its first nuclear reactor come online. That's according to the Courier-Mail, a Brisbane daily newspaper, which reported Thursday that the high price of uranium could force the creation of a uniform policy for mining the metal. Still, it's expected to take another 15 to 20 years before Australia goes through the planning and environmental scrutiny and joins the legion of 31 countries that use nuclear power.
An interesting comment was made by Marin Katusa, an investment strategist with Casey Research, who said Thursday that the uranium bull market has been driven by the price of the underlying commodity of late, with few significant drilling results to report.
Katusa felt investors are still awaiting a major discovery.
As for the markets, there was an overall surge thanks to corporate earnings news, with the Dow setting a record close and the blue chip index and Nasdaq both leaping to new territory as retailers Target and Wal-Mart reported higher sales... but that didn't seem to matter much for uranium. The Resource World uranium stock index fell more than 12 points to close at 1212.95.
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