The Energy Report: Mick, some prime assets are available in the junior market, but uranium prices continue to languish by and large. In Japan, the Kyushu Electric Power Co. Inc. (9508:TYO) recently restarted a Sendai reactor on the west coast of Kyushu. It is the first start-up of a nuclear reactor in Japan since 2013, in the wake of the Fukushima meltdown in March 2011. How does Haywood view the impact of this news on near-term uranium prices?
Mick Carew: The start-up of the nuclear reactors in Japan is definitely considered a positive for the uranium sector. But there are uncertainties in terms of the backlog of uranium stored in inventory in the country. With the reactor fleet being offline for four years now, Japan certainly has a significant supply of uranium on hand. How much it will purchase in the spot market in the short to medium term is uncertain. Needless to say, with the reactor restart and a good likelihood of further reactors to follow suit, demand is now lifting.
TER: The Canadian government recently granted an exemption to foreign ownership restrictions on producing uranium mines. Do you see consolidation as a dominant theme in the uranium space, especially in Canada, in the near and medium terms?
MC: We’ve seen the beginning of consolidation in the sector, which includes the recent merger of Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.MKT; EFRFF:OTCQX) and Uranerz Energy Corp. [Editor’s note: On July 6, Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT) and Fission Uranium Corp. (FCU:TSX) announced a consolidation agreement as well.] It is certainly a ripe environment for consolidation, with uranium prices the way they are, having plummeted following the Fukushima disaster.
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The number of players in the uranium sector …read more