UK Decides to Back Nuclear PowerJanuary 11, 2008
U.K. backs new nuclear power capacity
Publisher: U3O8.biz
Author: Luke Brocki
As anticipated, Britain backed a new generation of nuclear power
plants Thursday---the first new plants in nearly 15 years. The move
leads the EU's bid to give nuclear another shot at solving the world's
energy woes.
British Business Secretary John told media the first new plant could
be operational before 2020, with no limit to how much power nuclear
plants can contribute to the grid.
There's lots of room to expand nuclear power in England: according to
BusinessWeek magazine, Britain's 16 reactors produce just 18 per cent
of the country's electricity, with four of the plants coming offline
in 2010. In contrast, the World Nuclear Association says 30 per cent
of Europe's energy already comes from nuclear power.
This government nod will make planning and site selection easier for
new reactors in hopes of luring private investors to commit to
building reactors in the UK. Just the same, no subsidies will be given
for construction and the government is only committing to provide
public funds for a reactor in an emergency.
The move has already attracted foreign energy giants: following the
announcement, French energy behemoth Électricité de France said it
plans to build four nuclear plants in the UK come 2017 and Germany
giant E.ON also expressed interest in the newly open British market.
France and Finland are already building new nuclear plants, while
companies in the US are filing applications for operating licences.
Technically, new nuclear plants need no government backing to come
online, but government nods tend to go a long way to assure investors
their colossal financial risks are worth it.
So while investors cry in dismay and tear hair from their heads as
uranium's spot price continues to descend, (industry indicator
Tradetech dropped its spot price $1 to $89 a pound U3O8 last week)
they should remember how strong the metal's fundamentals are.
The long-term price for uranium remains at $95 a pound U3O8 until the
end of January, with reports of comfortable market activity expected
to keep it buoyant beyond that date.
And that's not all. Thursday also marked China's first entry into
Canada's uranium market, as Chinese steelmaker Sinosteel signed a
memorandum of understanding with Canadian explorer Ditem Explorations.
Reuters reported the move could lead to it taking an equity stake in
the firm.
Still, this week was a tough one for uranium plays and all five major
producers closed with losses. Surprisingly though, the Resource World
uranium price index gained some ground Thursday, climbing 26.33
points, or two per cent, to 1,332.53.
There were, of course winners on the TSX, but mostly of the penny
stock variety: Commander Resources was up three cents, or 15.8 per
cent, to 22 cents, after announcing the sale of its Despinassy project
in Quebec to majority partner Alto Ventures for $375,000 and 1,875,000
treasury shares of Alto. The move was seen as a positive one, with
Commander securing some nice cash for a non-core property.
Altershot Resources gained 2.5 cents, or 20 per cent, to 15 cents,
after sampling significant uranium concentrations on its Kariba
uranium project in southern Zambia.
Analysis of the 20 samples collected found 13 had values greater than
200 ppm U3O8 with three greater than 1,000 ppm U3O8.
Marum Resources saw a gain of 3.5 cents, or 19.4 per cent, to 21.5
cents, on record trading volumes. Company stock gained nearly 40 per
cent since Marum arranged equity financing worth $120,000 on January
3.