Crisis won't curb uranium demand, research findsJAPAN'S nuclear crisis is unlikely to curb demand for nuclear powerand global uranium companies can still look forward to buoyant growth, newresearch finds.
"Growth in the sector is expected to remain buoyant, albeit on aflatter trajectory than previously thought, driven by strong fundamentals,including the global need for low carbon, base load electricity generatingcapacity,'' Capital Research (RCR) managing director John Wilson said. RCR, an equity research company, todaypublished its major quarterly report that covers 17 global uranium companies. "It is evident that older reactors,certainly those over 30 years, will be under increased scrutiny,'' Mr Wilsonsaid of the washup of the Japanese nuclear crisis at Fukushima. "The key lesson from Japan's nuclearcrisis may point to the need for, and benefit of, greater transparency andaccountability of government and stricter oversight of government nuclearagencies.''
The report found that the global index ofuranium equities had dropped 19 per cent in value in the past month, sinceJapan's earthquake and tsunami damaged the Fukushima nuclear plant, However, strong fundamentals remained as majorusers China, India, Russia and the US all reaffirmed their commitment tonuclear energy. The uranium spot priceis about $US60 a pound ($A58.26) after falling to $US49/1b ($A47.58) inmid-March. This compares with thelong-term contract price $US73/1b ($A70.88) at February 28.
Mr Wilson said any Japanese impact on the uranium price was expected to betemporary. He said prices were expectedto return to US$70/lb plus territory, the price necessary to support developmentdecisions at advanced projects. MrWilson said other factors driving nuclear growth included high oil, gas andcoal prices, carbon pricing, growth in world energy demand and uncertaintyaround renewable energy technologies. Thereport said that about 75 per cent of all nuclear reactors in operationworldwide are more than 20 years old, 25 per cent more than 30 years old. Germany has temporarily shut down pre-1980commissioned reactors (seven out 17) after the Fukushima accident.