Media - Uranium Industry Headlines

Below are news items that appeared in the Nuclear Market Review.

Moniz Confirmed as US Secretary of Energy
The US Senate on May 16, unanimously confirmed Ernest J. Moniz as Secretary of Energy. Moniz, a physicist and professor at the Massachusetts Institute of Technology, replaces Secretary Steven Chu, and served as an undersecretary of energy during the Clinton administration. Senator Ron Wyden (D-Oregon), chairman of the Senate Energy Committee, said Moniz is “solution-oriented” and is “smart about energy policy and savvy about Energy Department operations,” according to a Washington Post report. “We congratulate Dr. Moniz on his confirmation as Secretary of Energy and look forward to working with him to ensure that nuclear energy continues to play a vital role in our nation’s energy and environmental policy…We urge Dr. Moniz to move expeditiously on [the planned repository at Yucca Mountain, Nevada] and other nuclear energy priorities for the betterment of our nation’s energy security,” the Nuclear Energy Institute said in a May 16 statement. [top]

Kazatomprom Opens US Office
Kazakh uranium producer Kazatomprom launched the official opening of its US office this week in Washington, DC, with a one-day conference that included presentations on the company’s current and future nuclear fuel activities. Sergey Yashin, deputy chairman for Kazatomprom, opened the conference by welcoming the attendees on behalf of Kazatomprom President Vladimir Skolnik, who was unable to attend. Yashin then outlined the company’s role in “Kazakhstan Strategy 2050,” the country’s three-pronged policy of universal economic pragmatism. The economic development plan, released by Kazakhstan President Nursultan Nazabayev in December, seeks to define new markets for Kazakh partnerships, create a favorable investment climate, and develop effective public-private sector partnerships, with the aim of placing Kazakhstan among the 30 most developed countries in the world by 2050. Yashin stated his desire for Kazatomprom to be candid and transparent in its activities and approach to the market, which included a plan to increase trade with the USA. “We have resources, expertise, staff, and finances. We have a strong position in Asia and Europe, but where we are not strong is the US and we want to increase our market share to be a world-class supplier and become a reliable supplier to US utilities. To do so we understand that we need a physical presence, and thus, the opening of the US office.“

Kazatomprom, which is 100 percent owned by the Kazakh government, wishes to double its share of the  US uranium market, currently estimated to be approximately 4 percent, within the next few years. Yashin introduced Yerbol Bekmyrza who will serve as director for Kazatomprom’s Representative Office in the USA. Kazakh Ambassador to the USA Kairat Umarov addressed the audience and expressed his hopes for a beneficial partnership with the USA. Presentations from Kazatomprom joint venture partners followed, including AREVA of France, Canadian producer Cameco, Russian-owned Uranium One, and trading company NUKEM.

Kazatomprom has indicated a desire to become vertically integrated through involvement in all aspects of the nuclear fuel cycle. The company has funded continued investment in exploration and development of new uranium deposits, has pursued a joint venture with Cameco for a domestic conversion plant, and is conducting ongoing negotiations with Russia’s state nuclear entity Rosatom to acquire a stake in the Urals enrichment facility. Kazatomprom is the world’s largest uranium producer and produced 46 million pounds U3O8 in 2012. [top]

Cameco Starts Production at North Butte Uranium Mine
Cameco announced on May 13, that production began at its North Butte in-situ recovery (ISR) uranium mine in Campbell County, Wyoming.
The mine is a satellite facility to the Smith Ranch-Highland ISR mine in Converse County, Wyoming. Uranium-bearing resin from North Butte will be transported to an existing central processing plant at Smith Ranch-Highland for uranium concentrate production. North Butte is anticipated to provide about 300,000 pounds of uranium concentrate in 2013, then ramp up to over 700,000 pounds of annual production by 2015. [top]

Japan Panel to Request Tsuruga Plant Closure
A panel of seismologists commissioned by Japan’s Nuclear Regulatory Authority (NRA) said this week it will request the closure of Japan Atomic Power Co.’s (JAPC) two-unit Tsuruga nuclear plant because it sits on an active fault line, which increases the risks of operation. The finding is expected to be endorsed as early as next week, and the NRA will have to determine the actions to take when new reactor regulations go into effect in July. The new regulations would allow for legal enforcement of the current guidance of no nuclear plants built on active fault lines. “It is very regrettable and unacceptable that such a decision was made,” according to a JAPC statement, as reported by Bloomberg. The company maintains the fault line is inactive and the report is not based on “objective facts and data.” JAPC plans to complete its own investigation by June 30. Unit 1 (340 MWe BWR) at the Tsuruga plant began operating in 1969, while Unit 2 (1,108 MWe PWR) was put into service in 1986. Both units have been shut down, along with most other nuclear plants in Japan, following the Fukushima crisis in March 2011. The panel is also reviewing five other nuclear plants operated by Hokuriku Electric Power Co., Kansai Electric Power Co., and Tohoku Electric Power Co., which are considered to be on active fault lines. [top]

Uranium One Reports Q1 Loss, Increase Production
Toronto-based Uranium One has reported a US$9.5 million loss for its first quarter ended March 31, compared to $4.5 million earnings in the same quarter a year ago. First quarter revenue, inclusive of joint venture revenue, was down to $62.6 million, compared to $95.9 million in the same quarter last year. Revenue was based on sales of 1.4 million pounds at an average realized sales price of $45 per pound U3O8, with the average total cash cost per pound sold of $17 per pound, compared to $14 per pound in the same period in 2012. Total attributable production from the company’s uranium mining assets in Kazakhstan, the USA, and Australia rose to 3.1 million pounds for the first quarter of this year—up 10 percent (2.8 million pounds) from the first quarter of 2012. Total attributable production for 2013 and 2014 is estimated to be 12.5 million and 13 million pounds, respectively. Inventory for Uranium One and its subsidiaries at quarter end was 0.8 million pounds, which includes work in progress and finished product ready to be shipped or in transit. Inventory held by the joint ventures was 4.5 million pounds as of March 31.On January 13, Uranium One entered into a definitive agreement with its largest shareholder, Russia’s Atomredmetzoloto, which would take the company private pursuant to a Plan of Arrangement. The transaction is expected to close by June 30. [top]

Paladin Energy Reports Q3 Loss, High Sales Volumes
Australia’s Paladin Energy has posted a net loss after tax of US$247.7 million for the nine months ended March 31, mainly due to the $98.2 million derecognition of the Kayelekera Mine net deferred tax asset, $140.8 million impairment associated with the writedown of the Kayelekera Mine assets, as well as the $13.7 million inventory impairment at Kayelekera and finance costs on outstanding convertible bonds and project finance loans. The company’s gross profit for the nine-month period dropped to $28.9 million, compared to $30.3 million in 2012, as a result of lower prices, partially offset by a 33 percent increase in sales volumes. Combined production at Paladin’s Langer Heinrich mine in Namibia and the Kayelekera operation in Malawi for the nine months totaled 6.1 million pounds U3O8, up 26 percent over the same period a year earlier. The company continues to forecast Fiscal Year 2013 of 8 to 8.5 million pounds U3O8. In its interim financial report for the quarter, Paladin noted a $200 million payment received from Electricité de France pursuant to a long-term offtake contract. Furthermore, the company secured two mid-term offtake agreements for a total of 6.3 million pounds U3O8, deliverable in the 2012-2015 period, at about 2 million pounds per annum from both the Langer Heinrich and Kayelekera mines. Pricing will be determined mainly by market-related prices at the time of delivery (without floor or ceiling limitations), while a minority portion of the delivery prices are comprised of a series of specified fixed prices that exceed current spot uranium prices. [top]

EIA Recaps 2012 US Uranium Market Activity
A total of 58 million pounds U3O8 was purchased in 2012 by US nuclear plant owners and operators, which included deliveries from US and foreign suppliers, according to data released by the US Energy Information Administration (EIA) on May 16. The EIA’s Uranium Marketing Annual Report reported that the weighted-average price paid was US$54.99 per pound U3O8—442 percent higher than the 2001 average price of $10.15. Seventeen percent of all uranium delivered last year was of US origin, at an average price of $59.44 per pound U3O8; foreign-origin material accounted for 48 million pounds U3O8 (83%) of deliveries at an average price of $54.07 per pound. Spot market activity again dominated new purchase contracts last year, with 31 spot contracts and two long-term contract signed, with 2012 deliveries of 12 million pounds at an average price of $55.16 per pound. As of year-end 2012, maximum uranium deliveries for 2013-2022 under existing contracts totaled 252 million pounds U3O8, while total unfilled requirements for US commercial reactors were reported as 255 million pounds U3O8 for the same period.

Together, these contracted deliveries and unfilled US reactor requirements represent the maximum expected market requirements of 508 million pounds U3O8 over the 10-year period. The full Uranium Marketing Annual Report is available on the EIA’s Web site at: http://www.eia.gov/uranium/marketing. [top]

CGNPG Renames to China General Nuclear Power Group
China Guangdong Nuclear Power Group (CGNPG), China’s largest nuclear power company, announced on May 15, it will change its name to China General Nuclear Power Group (CGN) to clarify itself as being a state-owned enterprise. The current name of CGNPG has often led to it being mistaken for a provincial-level firm in China’s Guangdong Province. CGN will remain based in Shenzhen, Guangdong Province. CGN reported total assets of ¥268.9 billion (US$43.7 billion) for its first quarter, and uranium reserves totaling 338,000 tU (878 million pounds U3O8). The company holds interests in several overseas uranium projects, including those in Kazakhstan and Namibia. In addition, it has an installed nuclear power generating capacity of 7.2 million kWh, which is 53 percent of China’s total. [top]

LDP Pledges to Restart Japanese Nuclear Plants
A draft of the Liberal Democratic Party’s (LDP) platform for July’s Upper House election calls for the restart of about 50 Japanese nuclear plants that went offline after the Fukushima accident in March 2011, provided the reactors can pass safety requirements. The LDP plans to determine within three years whether the reactors can resume operation. Japanese electric utilities have been turning to thermal power and fossil fuels imports to fill the generation supply gap, while nuclear plants remain idled. The LDP returned to power in Japan’s Lower House in December and, if successful, with this summer’s Upper House election, will take full control of the Diet. The draft platform will be finalized later this month and includes about 300 policies. [top]