Cameco/China Guadong/UEXRecent News:
Saskatoon, Saskatchewan, Canada, November 23, 2010
currency: Cdn (unless noted)
Cameco (TSX: CCO; NYSE: CCJ) announced today it has signed an agreement with China Guangdong Nuclear Power Holding Co., Ltd. (CGNPC) to supply 29 million pounds of uranium concentrate under a long-term agreement through 2025.
CGNPC, China's largest clean-energy enterprise, operates three nuclear power stations and has the largest number of nuclear power plants under construction in the world. CGNPC indicates it has about 17,000 megawatts (MW) of nuclear capacity under construction and expects to have over 50,000 MW on line by 2020.
"This long-term supply agreement with China Guangdong Nuclear Power is a significant step for our company in the world's fastest growing uranium market," said Cameco CEO Jerry Grandey. "China Guangdong Nuclear Power has 14 nuclear power units currently under construction and is commencing preliminary work on another nine units. This deal leaves us well positioned to serve the company's growing uranium requirements."
Reports from China indicate the country plans to increase its nuclear capacity from the current 11 gigawatts (GW) to at least 80 GW by 2020. A further increase to 120-160 GW or more is planned by 2030.
"This agreement is further evidence that our plan to double uranium production by 2018 aligns well with China's remarkable nuclear reactor construction program," added Grandey.
Today's agreement follows the June 24, 2010 signing of a framework agreement with CGNPC. The long-term supply agreement with CGNPC is subject to Chinese government approval.
New News:
China Investment Corp., the country's sovereign wealth fund, is opening an office in Toronto, only its second outside the mainland. The reason seems clear: they want to diversify their reserves by investing in Canada's natural resources. The CIC has $300 billion to spend.
I post this in response to another poster that had made what I consider to be a preposturous remark that no one would be interested in acquiring UEX.
I have been invested in several Aussie companies that have ownership stuctures where the Chinese have 30% -50% of the company and 1 or 2 other companies own the balance. The Chinese have either accepted country restrictions on foreign ownership and or like the incentive risk spread this gives them. As pointedout previously the Chinese have a huge growing on going need for U. They have a desire for at least partial ownership of the company/assets they are going to need. In this case UEX is a sexy piece of tail for them to oggle IMHO. UEX has a readily available short term substantial and growing 43-101 shallow asset in spitting distance of two U mills.
A strong but minority partner/ownership position by Cameco whom already has partnered with the Chinese on a long term supply agreement.......
Now for someone to deduce that no one would want to own/takeout/JV UEX because of the Cameco
ownership to me is mind boggling. In the case of China that is a flashing green light..... For a fraction of the $300 billion the Chinese could nail down a significant chunk of the U needs for years! If they act fast they can virtually steal them due to the shady manipulation of the brokerage houses and the short term focus of some UEX investors.
Note: I have worked for and negotiated with Chinese companies for over 15 years (NOT IN THE U AREA) however I don't see any reason why they wouldn't covet and seek out ownership in UEX.