Breaking News from The Globe and Mail repost.Hope it has not been posted earlier because I have not read any earlier postings of going back awhile.
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Breaking News from The Globe and Mail
Cameco anticipates boom in uranium demand from China
SHAWN McCARTHY
Thursday, November 30, 2006
OTTAWA — Cameco Corp. says it is laying the groundwork for an expected boom in uranium demand from China, as the Chinese and Canadian governments pursue talks that would facilitate Canadian exports to the nuclear weapons state.
But Canada is lagging Australia, its main competitor in the uranium exporting business, which signed a deal earlier this year with its Asian neighbour that will allow for exports and for Chinese investment in uranium mining there.
On his trip to Beijing earlier this month, Natural Resources Minister Gary Lunn agreed with his Chinese counterparts to pursue negotiations on a framework deal — including issues of non-proliferation — that would open the door for Canadian uranium sales to China.
Saskatoon-based Cameco, the world's largest uranium producer, has encouraged Ottawa to reach a deal with the Chinese, and is maintaining its own marketing effort. But it is not expecting a sudden boom in sales.
“We see China as more of a long-term opportunity because of its ambitious nuclear energy program,” Cameco's Lyle Krahn said Thursday. “And we have established regular contracts with them, and meet with them periodically.”
He said China consumes about three million pounds a year of uranium, less than 2 per cent of the world market. That demand will grow exponentially if the country proceeds with plans to build 18 new reactors over the next decade. It now has nine reactors in operation.
“Whether we sell to China or some other company sells to China, ultimately [its growing demand] takes uranium out of the market, and ultimately is beneficial to us anyway,” Mr. Krahn said.
China is a signatory of the Non-Proliferation Treaty, and Australia's deal to export uranium to the rapidly growing Asian power provoked little controversy in the United States. Critics there were far more concerned about the U.S. government's decision to begin nuclear co-operation with India, which is not a member of the treaty.
But Norm Rubin, of Toronto-based Energy Probe, said the sale of uranium to any nuclear weapons state is immoral and wrongheaded.
“If you think nuclear weapons are part of the problems of the world and one of the threats to civilization, then the idea of sharing the life blood of that stuff with the people who are using that life blood for a pursuit you perceive as evil makes you evil.”
Mr. Rubin said he doesn't accept the argument from Cameco and other uranium exporters that they are selling only for the civilian purposes of nuclear energy. The imported uranium allows military powers to devote their own sources of uranium to supply weapons systems, he said.
The anti-nuclear activist also questioned the projections of a nuclear renaissance, noting that very few of the reactors that the industry claim will come on stream in the next decade have actually received approval.
Cameco, itself, sounds a cautionary note, even as it forecasts a major jump in reactor construction, with 82 new reactors expected to be built by 2015.
“It is difficult to know whether these trends and the national debates on the long-term future of nuclear power will result in more or less favourable conditions for the nuclear industry,” the company said in its most recent annual report.
One analyst predicted the market for uranium will continue to boom after years of low prices discouraged production and boosted consumption. Spot prices for uranium have risen 75 per cent this year to $63 (U.S.) a pound and show no signs of easing, said Jeff Combs, president of Ux Consulting Co., which tracks uranium markets.
Mr. Combs said U.S. utilities have concerns about China's growing appetite for uranium because the Asian giant has the capacity to lock up supplies through long-term contracts, thereby sending prices on the spot market even higher.
“It would just put pressure on a market that is already suffering from underproduction,” Mr. Combs said. “It's like other things: The Chinese basically are going out and buying oil and steel and a lot of other commodities, and driving up prices.”
© The Globe and Mail