Commodity Online
NEW DELHI: In India, Uranium is a hot commodity because the nation needs it to run its nuclear reactors idling 50 percent as of now as is the case with many others building nuclear reactors. The Indo-US nuclear deal has brought the commodity into sharp focus here.
Several analysts are bullish on the commodity uranium now whose peak was a year ago near $140 while now it is trading at around $57. This led to the coining of the term “Uranimania” by Bob Bishop, according to Dr Russel McDougal in Investor's Daily Edge.
However, uranium is not something that can be brought and sold by the common man. . It trades almost entirely by private contracts. Private parties have to come to terms for delivery of present or future uranium supplies. There is a massive gap between the current “spot” price and what many uranium experts believe is a more realistic price.
The only option for the ordinary investor is to invest in Uranium stocks which have been doing fairly well recent times There is a fantastic opportunity in the uranium exploration and mining shares, write McDougal.
The uranium market does not solely depend on the US figuring out that nuclear energy is clean, cheap and safe. China, India and multiple others are already in progress, McDougal adds.
Uranium mining faces an uphill battle. Miners are not poised to bring forth sufficient supply to meet current demand until 2018, at the earliest. In situ miners (those who use an environmentally friendly extraction process) are running into problems finding enough attractively priced sulfur to bring forth the uranium. Exploration, permitting and mining is an exceedingly long process. There remains tremendous resistance to uranium mining in many jurisdictions. Supply will lag demand for an extended period.
Nuclear plants release very little carbon. There is insufficient primary uranium supply to meet current needs. Only 60 percent comes from present mining operations, with the rest supplied by decommissioned nuclear warheads. Russia is the foremost supplier and they don’t have an endless supply.
Uranium mining supply faces an uphill battle. They are not posed to bring forth sufficient supply until 2018 at the earliest. In situ miners (an environmentally friendly extraction process) are running into problems finding enough attractively priced sulfur to bring forth the uranium. Exploration, permitting and mining is an exceedingly long process. There remains tremendous resistance to uranium mining in many jurisdictions. Supply will lag demand for an extended period of time, writes McDougal.
The world is turning towards uranium as it does not contribute to global warming. The French based International Energy Agency wants 32 plants built per year around the globe between now and 2050. As many as 145 new nuclear plants are presently on the table between now and 2030. China could build 45, 18 in Russia, 17 in India and 15 in the U.S. The U.S. presently has 104 in use. Europe has 197 plants in use and 13 under construction.
Meanwhile, the UPA government in India which has won the no-trust vote has categorically said that it will try to finish the Indo-US deal which it says is vital for energy security of the country. The Director of Bhabha Atomic Research Centre (BARC) has also announced significant additions to nuclear generation capacity in India.
At present there is an aversion to uranium as a commodity but the “uraniphobia” won’t last. This is because Uranium is underpriced now and its supply-demand fundamentals are robust.
