Canadian and American uranium investors celebrated their countries' birthdays on July 1 and July 4, respectively, but they also celebrated something together: the first spot uranium price increase of 2008. Price publisher Tradetech raised its spot estimate US$1 to US$58, after reporting that market momentum appeared to be shifting. Rival price publisher Ux Consulting followed suit a few days later, raising its price US$2 to US$59 a pound U3O8.
Tradetech reported six transactions in the spot uranium market last week, with everyone from traders and investors to producers and utilities looking to buy the metal. Tradetech also reported that while demand remained discretionary, new buyers had emerged in the market and their arrival had caused savvy sellers to increase prices of the metal.
But bearish analysts cautioned the celebrations weren't complete, for term prices of uranium have again declined. The International Business Times reported Ux Consulting dropped its term price US$10 to US$80. For the time being, Tradetech seemed happy with its term price estimate of US$85 a pound U3O8, which remained unchanged. Still, uranium bears fear the term price may continue to tumble as utilities eager to replenish their inventories hunt for bargains.
But we're not seeing that just yet, and sellers in the spot market are reportedly not having any trouble unloading material; some are even raising prices as they encounter more and more willing buyers. It will be interesting to see where the majority of transactions will be conducted in the coming weeks as the gap between spot and term prices of uranium is expected to narrow further.
Canadian uranium giant Cameco Corp owned the papers last week, with a flurry of news and the biggest stock jump of 2008 to date. Last Tuesday the company jumped C$3.10, or 7.6 per cent, to close at C$43.80. The jump was fuelled in part by uranium's aforementioned first spot price jump of the year, which interrupted a seven-month drop during which the metal lost more than a third of its value. Cameco stock flip-flopped for the rest of the week, closing Friday at C$42.28, just as the company was making headlines again.
The Canadian Press reported Cameco has acquired a colossal shipment of yellowcake from Iraq in a secret transaction led by the US military. Cameco reportedly bought 550 tonnes of yellowcake---a stockpile that was allegedly the last remaining pat of Saddam Hussein's defunct nuclear program.
And Cameco is finally gearing up to pump water out of its flooded Cigar Lake mine. The StarPhoenix newspaper reported the process is expected to take several months, but Cameco has already received approval from the Canadian Nuclear Safety Commission and several Saskatchewan ministries to de-water the flooded uranium mine.
Cameco will again appear before the safety commission in September, when it will apply for a second mine shaft and other improvements at the Cigar Lake project, which has yet to produce any uranium despite being widely regarded as one of the richest uranium mines in the world; it has been flooded since October 2006, after construction activities triggered a rock fall. Cameco plans to start production at the mine in 2011.
Striking while the iron is hot, Cameco CEO Jerry Grandey called on Ottawa to show leadership regarding nuclear power, if it's to help Canada reduce greenhouse gas emissions. Grandey told the Globe and Mail newspaper the federal government must do more to encourage new nuclear construction in the country, or risk falling behind other nations more receptive to nuclear activities, in particular the United States, which has recently been praised by pundits for its friendly uranium policies, loan guarantees, and simple permitting processes.
However, the grass is always greener in the neighbour's yard, and the United States has nuclear troubles of its own. According to a recent report, current US policies are still not sufficient to give nuclear power a leading role in climate protection. According to data from the US Energy Information Administration's Annual Energy Outlook 2008, current policies promote a 15-per-cent rise in nuclear power capacity by 2030, but overall American energy use is expected to grow by 19 per cent.
It's clear that if nuclear power is to wean us off our oil addiction, its projected growth rates cannot remain flat. Analysts now hope the recent jump in spot uranium prices will reignite some much-needed nuclear discussions among governments and regulators.
Over in Europe, that may already be happening, with a recent survey showing European support for nuclear power has grown by seven per cent in the last three years and now nearly balances opposition. Furthermore, the poll showed that more than a third of remaining opposition would vanish with a better understanding of nuclear waste solutions.
Today's figures of 44 per cent in favour and 45 per cent opposed to nuclear power in the European Union's 27 member states were seen as an improvement by nuclear proponents, given that nuclear power enjoyed just 37 per cent EU support in 2005. The figures come from the latest in a series of Eurobarometer polls, which monitor public opinion in the European Union. World Nuclear News reported roughly 30 per cent of the EU's electricity comes from 146 nuclear reactors operating in 15 member states.
In other industry news, Canadian miner Uranium One reported a new credit deal, improved second-quarter production, and permission to boost production at its Kazakhstan mine, but the news wasn't enough to excite investors and company stock finished in the red week-to-week, closing Friday at C$4.26.
The Canadian province of New Brunswick has amended its rules for uranium exploration to appease growing opposition to the explosion of uranium exploration in the province. According to the Canadian Press, under the new rules, uranium explorers and miners are no longer allowed to work in watersheds, in municipalities, or within 300 metres of residential or institutional buildings. But opponents feel the new rules are soft and inadequate and are calling for a full moratorium. The number of claims for uranium in New Brunswick has more than tripled since 2005.
Finally, the European Commission opened an antitrust probe into mining giant BHP's hostile takeover of rival Rio Tinto amid worries the deal---which would create a matchless global commodity behemoth---could stifle competition in global commodity markets. The commission is expected to rule by November 2008 on whether to block the US$147-billion-takeover.
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