TradeTech is reporting a spot market uranium price of $50.75 per pound, with no change from the previous period. Japan’s approval of the restart of units 3 and 4 at Kansai Electric’s Ohi nuclear power plant has infused some optimism into the industry, but the announcement has not yet resulted in higher spot market prices or transaction volumes.
It is expected that unit 3 will recommence operations on July 4 “at the earliest,” reaching full nuclear power generation by July 8. Unit 4 will follow slightly behind, beginning generation on July 20 and reaching full power by July 24.
Further approvals for Japanese nuclear reactor operations could soon follow. In a recent statement, Takashi Imai, chairman of the Japan Atomic Industrial Forum, suggested the country face will face an electricity shortage of approximately 10 percent this summer. Additional fossil fuel imports to offset this deficit are expected to cost approximately $40 billion per year. The marginal impact of increasing carbon emissions will bring levels 14 percent above the 1990 range, which served as a policy benchmark for the Kyoto protocol.
Cameco‘s (TSX:CCO,NYSE:CCJ) Port Hope conversion facility received a comprehensive study report from The Canadian Environmental Assessment Agency. The report requests public review and participation and follows in accordance with the Canadian Environmental Assessment Act, which requires that such projects receive a federal environmental assessment (EA) in the form of a comprehensive study.
The report’s aim is to identify the potential environmental impact of the project during all decommissioning, demolition, and remediation phases, and to focus on potential accident scenarios. The study also reviews existing environmental conditions and the Canadian Nuclear Safety Commission’s conclusions and recommendations regarding appropriate mitigation measures.
Public participation and comments on the report are welcome until July 25. Peter Kent, the environment minister, is expected to announce his EA decision following the period, taking into consideration the report and public contributions.
Paladin Energy (TSX:PDN,ASX:PDN) intends to sell minority stakes in as many as three of its development projects by the end of October. While Paladin operates uranium mines in Namibia and Malawi, it is also currently developing uranium resources in Australia, Canada, and Niger. The company expected to find a strategic joint venture partner to help fund the development of one of its Australian uranium projects by the end of March.
Denison Mines (TSX:DML,AMEX:DNN) has delayed the development of its planned uranium mine in Zambia until uranium prices rise above $65 per pound. The company expects uranium prices to start improving by late 2013, when the termination of the Megatons to Megawatts nuclear warhead program is likely to result in a supply deficit. Denison was planning to mine about 18.8 million tonnes of uranium ore from the Zambian project, according to information submitted to the Zambian environmental management agency.
Investors will be interested in these developments as they highlight important current themes in the uranium mining and nuclear power industries. Cameco’s delays indicate some of the potential increased environmental costs and regulatory delays that post-Fukushima global nuclear reviews and safety audits may require. Both Paladin and Denison are deleveraging uranium developmental project risks, but each company is employing a different strategy; while Paladin is seeking joint venture partnerships to share costs and mitigate risk, Denison is awaiting positive price dynamics before concentrating its capital on developing its resource.
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Securities Disclosure: I, Dave Brown, hold no direct investment interest in any company mentioned in this article.