Waseco Resources Inc V.WRI

Uranium Demand Grows

[mamoth]

China planning on increasing nuclear energy targets while Sweden does an about-face on its nuclear policy

There are two stories in the World Nuclear News (“WNA”) this morning, which provide further evidence that the medium to long-term outlook for uranium demand is robust.

The first story reports that the Chinese government is looking into possibly expanding its nuclear capacity target for 2020, to 70 Gigawatts, from the current target of 40 Gigawatts. Currently, China has a nuclear capacity of approximately 9 Gigawatts.

If the Chinese government were to expand its nuclear capacity to 70 Gigawatts, it would increase its uranium demand to roughly 42.6 million lbs of U3O8 from its current level of approximately 5.2 million lbs of U3O8. We estimate that 42.6 million lbs of U3O8 represents approximately 23.5% of the current demand for uranium.

In the other WNA story, the Swedish government has reversed its policy of banning the construction of new nuclear power plants. In 2007, the Swedish government reversed a law that called for the orderly shutdown of the country’s nuclear power plants by 2010. With the latest move, the government is now prepared to give permission to utilities that want to replace

existing nuclear reactors that are at the end of their economic lives.

We estimate that Sweden represents approximately 2% of the world’s demand for uranium.

We also note that during the current economic global downturn, uranium is the only commodity (with the possible exception of gold) that has seen demand enhancement, not demand destruction.

Analyst Coverage: Patrick Donnelly- SALMAN PARTNERS