The Energy Report: Will the no-longer hypothetical restart of the Japanese nuclear reactors move uranium prices into the production range?
Leigh Curyer: The restart of the first reactor since Fukushima is very good for our business, psychologically. Japan does not have the capacity to fill its power grid with fossil fuels. It needs nuclear power to provide the country with sustainable and cheap power. On top of that, the carbon emissions from fossil fuels are not sustainable globally. Another positive of the reactor restart, beyond the psychological effects, is the fact that there was a fear that Japan was going to flood the market with some of its stockpiled uranium. But that fear has now been predominately removed. There are a number of Japanese reactors in the final stages of safety review and approval, which should only help to eliminate that risk of Japan’s stockpiles entering the spot market.
“Because Arrow is high grade, basement-hosted and land-based, we believe it will also be competitive on the global stage.”
The demand side issue is much bigger than Japan. There are 63 reactors under construction worldwide. Nuclear energy is forecast to grow at 2–4% per annum globally according to both the International Energy Association (IEA) and the World Nuclear Association (WNA). On the supply side, roughly 90% of the world’s primary production is either under a severe technical or sovereign risk. There have been major interruptions on the supply side, with Energy Resources of Australia Ltd.’s (ERA:ASX) Ranger Deeps not going ahead, and supply interruptions at the Olympic Dam mine (BHP Billiton Ltd. [BHP:NYSE; BHPLF:OTCPK]) and also at the Rössing mine. Obviously, the world needs more uranium mines to come on line—particularly mines with low cost structures from stable jurisdictions. Saskatchewan is arguably the best jurisdiction in the world for mining, and specifically uranium mining. …read more