Waseco Resources Inc V.WRI

Uranium Shortages Forecast

[mamoth]

The Royal Bank of Scotland stated Tuesday that uranium demand will rise and exceed supply in 2014 as China and Russia add nuclear power stations, benefiting producers like Paladin Energy and Energy Resources of Australia, as reported by Bloomberg. In a bold statement, the RBS analysts said the spot price of uranium will more than double from its current level to a peak of US$95 a pound in late 2011. Yes, late 2011 is two years away and that may seem like a long-time but it’s not for the major consumers of uranium and the larger producers who need to plan many years ahead. This bodes well for the smaller producers and project developers with attractive assets. The global government entities and large producers aren’t going to wait until prices double to scope up supply. The RBS analysts highlighted that some 48 reactors are being built right now (increase of 41%), compared with 34 in 2008 and 32 in 2007. Supplies are “inconsistent” with “logistical, statutory and operating bottlenecks” in Canada, Namibia and Australia, RBS said. Adding that demand will climb steadily, leading to “a deficit market from 2014 on.”