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Juggling Uranium

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  • Juggling Uranium

    Hi Guys

    Some interesting facts(presumably) about uranium and where the future of our electricity may come from.

    By Sven Lorenz

    I was about 10 years old when tragedy struck at Chernobyl.
    At the time I did not grasp the full extent of the
    consequences of this event, only that my beloved excursions into the woods to collect mushrooms were put on hold.

    But the nuclear disaster at Chernobyl affected much more than a few mushrooms. It killed many people and sickened thousands more, in the process creating global panic over nuclear power.

    The accident sharply increased reservations about using
    nuclear energy. But nuclear power, and the plants that
    harness it, have staged a Renaissance since Chernobyl…and for good reason.

    Today nuclear generators are operated for energy production in 31 countries. The 439 power plants worldwide make up 16% of the world's energy consumption.

    Keith Parker, chief executive of the Nuclear Industry
    Association, points to a statement by James Lovelock, one of the founders of Greenpeace: "Only nuclear power can halt global warming".

    Considering the rate of today's global energy consumption, the goals of the Kyoto Protocol cannot be reached without nuclear energy. In addition, the reduction of greenhouse gases must not be seen in the context of a constant, never changing demand for energy.

    Besides the ambitious goals of the Kyoto Protocol, another aspect contributes to the pro nuclear energy argument: A large part of the global oil and gas reserves are found in regions that are politically unstable or have the potential to be.

    For example, the largest proven oil fields, and
    consequently, gas fields, are located in Saudi Arabia, Iraq and Iran.

    Even nuclear energy is dependent on natural resources - not on oil or gas, but uranium. Unlike oil and gas, uranium is found in stable countries like Canada and Australia. More than 50% of the world's uranium is produced in these two countries.

    With oil prices soaring and supply depleting, it is no
    surprise to some that we are building nuclear power plants around the world at a ferocious rate.

    In Asia, nuclear power is dominating the development of new power plants. Of the 30 most recently completed, 20 are found in Asia.

    China is currently planning the development of 30 nuclear power plants. By 2020, their capacity is predicted to increase by 500%. Other experts, however, expect energy derived from nuclear production to account for only 5% of the energy mix by the emerging superpower. The growth potential for China is therefore enormous.

    Japan, Taiwan and South Korea are planning additional
    nuclear power plants. Russia also has several plants in
    development. For the next ten years, a total of 69 nuclear power plants are to be developed and 38 are planned to be shut down. At the end of the day, the number of operational nuclear power plants will rise significantly.

    The USA currently operates 103 nuclear power plants. The superpower has gone through a wide-ranging consolidation process forced by the necessity to reach economies of scale. The ten largest providers control 61% of the entire sector. Under the Bush administration, plant operation life was recently significantly extended. In total, 74 power plants have been granted or will shortly receive a 20-year extension.

    By now, dear reader, you might be asking yourself how you can best profit from this growth in nuclear energy?

    Buy uranium - the fuel of any nuclear power plant! Uranium can only be bought indirectly as it is not an available market commodity. In contrast to gold, silver or platinum you cannot really put a kilogram of uranium in your safe - and if you did, it is most likely that you would shortly be visited by the National Security Agency of your home country...

    Now, I won't completely rule out that a few of you might
    find the thought of making friends with the National
    Security Agency entertaining. But for the rest of you, I
    suggest to take a look at the shares of uranium producers.

    The worldwide market for uranium is dominated by a handful of producers. The largest among them are Rio Tinto, WMC and Cameco. The Australian WMC corporation was just recently taken over by BHP Billiton.

    The price of uranium steadily fell in the second half of
    the 1990s. In the year 2000, prices were as low as US$7 per pound despite production costs of approximately US$10.
    Since then, prices have more than tripled. In the year 2004 alone, the price for uranium rose by 43%. Currently, the price is quoted at more than US$29 per pound!

    The low prices of the 1990s made the extraction of uranium rather less enticing. The uranium producers held back investments in new uranium mines because it would simply not have paid.

    The consequence is that far more uranium is consumed than can be produced! While worldwide uranium production rose from 93 million pounds in 2003 to 104 million pounds in 2004, this was matched by a global consumption of 180 million pounds!

    All this may lead some investors to think that juggling
    some uranium may not be as hazardous as first thought.
    Source: thedailyreckoning.com

    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx