Uranium's dirty past, present - and future?
Although investors currently aren't buying uranium shares, and mine projects have been closing down, the metal's spot price has climbed in recent weeks.
According to one analyst, global nuclear reactors require an estimated 170 million pounds of uranium annually, but this year's supply will be more than a third below this target level.
With predictions that mergers and acquisitions (M&As) will soon "sweep" the uranium market, yellowcake's prospects all depend on "supply and demand fundamentals."
The companies claim they can make the supply, but will the power utilities make the demand?
More important - to what extent will justified concerns, over the uniquely damaging legacy of uranium mining,. curb the recent enthusiasm of some governments for nuclear power?
Or deter the licensing of new mines - as in Namibia, where people already have a decidely mixed experience of the impacts of uranium extraction?
Just last month yet another community, this time in the US, took a stand against uranimum mining, fearful of its potential impacts on water supplies. But, meanwhile, Russia has signed an inter-national deal with India, to increase the Asian state's capacity to expand its nuclear power.
Uranium wastes, dumped in Kyrgyzstan, were named in 2006 by the Blacksmith Institute as constituting one of "the world's worst places" - potentially threatening the health of millions of people. See:http://www.minesandcommunities.org/article.php?a=845
Earlier that year, Kyrgyzstan villagers were reported to be "mining" these dumps in order to extract silicon. See: http://www.minesandcommunities.org/article.php?a=1861
Last month, the UNDP estimated that around 6,500 hectares of land in the country have been exposed to radioactive contamination, with 92 hazardous waste dumps holding 475 million tonnes of waste, including radionucleides and other toxic substances.
Despite the massive problem posed by these wastes there yet seems no consensus on whether the dumps should be removed or "stabilised" in place. One Russian official is quoted as claiming that the wastes "could be stored for more than 1,000 years without any harm". Even if this were true (which is highly doubtful) such a short period accounts for only a fraction of the time during which radioactive emissions are likely to continue.
[Comment by Nostromo Research, London]
Uranium stocks poised for surge on Tornto Stock Exchante(TSX)
With the uranium price up 25 percent over the past five weeks, stocks are yet to pick up and analysts are looking to the sector for good increases.
9th November 2008
OTTAWA - Uranium miners have found themselves with a hearty recipe to power a stock market revival: rising prices for the nuclear fuel, strong demand, and supply disruptions. The only ingredient missing is investors.
The spot price for uranium UX-U3O8-SPT has surged 25 percent over the past five weeks, a performance unmatched by the stocks of companies in the uranium sector. From a basket of 56 stocks tracked by Haywood Securities, for example, 42 fell over the last week, three were unchanged, and just 11 saw gains.
"These companies are putting out news that is good for the supply and demand situation, but hurts the individual companies," said Dundee Securities analyst David Talbot.
Supply is shrinking as uranium producers, stung by the global financial crisis, have been closing mines, delaying developments and cutting production forecasts.
"Almost every single producer has downgraded their forecast for 2008 production guidance," said Haywood Securities analyst Geordie Mark. "It's something like 5.5 million pounds already downgraded ... when production last year was around 107 million pounds, it's a big deal."
With a tighter supply, the spot price for uranium climbed another $2 to $55 per pound this week. That's up from a two-year low of $44 touched in October, when funds and investors sold off uranium supplies and equities.
Spot prices peaked at $136 a pound in June 2007, compared with $7 in 2000.
The world's nuclear reactors require an estimated 170 million pounds of uranium annually, said Talbot, who forecasts supply at 107 million pounds this year.
There are nearly 440 nuclear reactors producing electricity around the world, with construction under way on 35 plants, notably in China, South Korea, Japan and Russia, according to the World Nuclear Association. Construction of a further 60 reactors is forecast in the next 15 years.
Against that backdrop, Talbot said the time is right for investors to warm up to uranium stocks.
"These things trade on the spot price and the spot price seems to have bottomed at $44. Now it looks like it's rising due to supply-demand fundamentals," he said.
"What we notice, when the stocks rise, is that they rise fairly quickly. You would rather be in the space early than sitting on the sidelines."
Among producers, he likes Paladin Energy , which recently hiked estimates for its Kayelekera project in Malawi and its Langer Heinrich mine in Australia. He said Uranium One could benefit from its low-cost operations if uranium prices do not continue climbing.
Among juniors, he prefers "cashed-up" UR Energy, which sees production at its Wyoming project in 2010, and Athabasca Basin explorers UEX Corp and Hathor Exploration .
Talbot also likes Strateco Resources , which he said is the only junior currently in the permitting stage. It is seeking permits for its Matoush project in Quebec.
Inventory funds, such as Canada's Uranium Participation Corp, are a good way to enter the sector with lower risk, Mark said.
"The metal is already there, it's housed, so all you're doing is (being) exposed to changes in, effectively, the metal price, which we think will rise over the coming year."
Analysts also say merger and acquisition activity is set to sweep the sector, in deals with potential to enrich investors. Buyers appear willing to pay prices well above stock market valuations for assets, said Talbot, pointing to Forsys Metals , which was sold recently at a 51 percent premium.
"We're right at the cusp, in the sense that the companies are getting closer and closer to being cash-strapped and requiring financing," Mark said. "M&A is going to happen, particularly because there are very few new players that are going to be producers in the next five years." (Reporting by Susan Taylor; editing by Peter Galloway)
© Thomson Reuters 2008. All rights reserved.
KYRGYZSTAN: Landslides threaten radioactive waste dumps
11th November 2008
MIN-KUSH - Residents of the village of Min-Kush in Naryn Province, central Kyrgyzstan, are worried that a mudslide could destroy a nearby radioactive waste dump and contaminate the local river.
The Soviet-era radioactive waste dump is about 2km from Min-Kush and close to the River Tuyuk-Suu.
"We are afraid of a huge mudslide triggered by heavy rain. It could destroy the radioactive waste dump, leading to contamination of the river. What will we do?" asked 35-year-old Saparkul Burkokbaeva from Min-Kush.
The area is mountainous and earthquake prone, and Ministry of Emergencies experts say torrential rain could trigger potentially devastating landslides which could change the course of the River Tuyuk-Suu, and/or wash away the waste dump, one of the biggest identified. It contains about 450,000 cubic metres of radioactive waste.
"The problems of Min-Kush village need an urgent decision. We have had a lot of rain and there is a risk of landslides blocking or altering the course of the Tuyuk-Suu river," said Emergencies Minister Kamchybek Tashiev.
Many radioactive waste sites in Kyrgyzstan - a legacy of the Soviet Union - are in areas prone to earthquakes and landslides, and thus pose an environmental safety hazard to Kyrgyzstan and the Central Asian region.
Kyrgyz Prime Minister Igor Chudinov was quoted by Kyrgyzstan's AKIpress news website on 5 November as saying there were a considerable number of toxic radioactive waste dumps in the country, and that they posed a contamination threat to the whole Central Asian region.
Some 6,500 hectares of land in Kyrgyzstan have been exposed to radioactive contamination. The country has 92 hazardous waste dumps holding 254 million cubic metres (475 million tonnes) of waste, including radionuclides and other toxic substances. Dormant mines, untreated tailing dumps and untreated rock debris pose a risk. The most urgent clean-up measures needed to render the tailings safe would cost up to US$40 million, the United Nations Development Programme has estimated.
If radioactive waste were to be washed into the River Tuyuk-Suu, contamination could flow, via other rivers, into the River Syrdarya - a trans-border river that flows through Kyrgyzstan, Uzbekistan, Tajikistan and Kazakhstan - and thousands of people might be affected, the Kyrgyz Emergencies Ministry said.
Experts have yet to come up with viable solutions to ensure the safety of the waste dump near Min-Kush and thus the local community. One option is to move the waste to a safer place, but some scientists oppose the idea.
"We studied all the data and came to the conclusion that we should not disturb the radioactive waste by moving it. It is better to build a new riverbed [for the River Tuyuk-Suu] and strengthen the dams that hold the actual waste. In this way we will prevent uranium waste seeping into the river and soil," said Anatoliy Svirdukov, a senior Russian Federation official from the Federal Agency on Nuclear Energy, who visited the area in October.
"Uranium waste was dumped at Tuyuk-Suu between 1959 and 1963. More than 50 years have elapsed since the first professionally structured storage facilities were developed. If proper storage standards are maintained, uranium waste could be stored for more than 1,000 years without any harm. The local authorities should monitor and secure it," Svirdukov said.
"But there are no fences or signs warning of the danger to people or livestock," he said.
Prospect of uranium mining concerns Virginia Beach
30th November 2008
VIRGINIA BEACH, Va. - The resort city of Virginia Beach is prepared to take a stand against uranium mining, fearful it could threaten its water supply. The city, as well as other Hampton Roads localities, draws its water from Lake Gaston. The lake on North Carolina's border is approximately the midway point between Virginia Beach and Pittsylvania County, where the massive uranium deposit is located. Twenty-five years ago, Virginia put a moratorium on uranium mining. Earlier in November, the Commission on Coal and Energy agreed to study the impact of uranium mining. The study will center on a deposit that contains 119 million pounds of uranium ore valued between $8 billion and $10 billion. Virginia Uranium Inc.., a Chatham company, wants to begin mining the yellow cake ore as U.S. interest in nuclear power is rekindled.
At a meeting last week, the City Council was told that a hurricane or tropical storm could potentially disturb radioactive mining waste. Thomas Leahy, the city's director of public utilities, said that could include contamination of downstream waterways and Lake Gaston. "It seems that Virginia Beach is in position to be a big loser," said Councilwoman Barbara Henley. The city would get the risk without the economic benefit, she said. Mining supporters said the state study will look at that issue. "We drink the water here, and we wouldn't want a situation where a tailings system could be impacted by a hurricane or any other type of disaster," said Walter Coles, who owns the land where the mine is proposed. He has formed Virginia Uranium Inc. to explore mining the uranium. "It should be an unbiased study," Coles said. "We'll just wait for the study, and we hope uranium can be mined in Virginia just like it's being mined in other parts of the world today." The City Council will consider an official resolution against mining in December.
Uranium - a blessing or a curse?
by Herbert Jauch
5th December 2008
Over the past few months, the debate about the costs and benefits of uranium mining has been re-ignited.
Following the release of a uranium study by the director of the Labour Resource and Research Institute, Hilma Shindondola-Mote, earlier this year, mineworkers and environmental organisations have raised concerns.
At the heart of the dispute is whether a mushrooming uranium mining industry is a curse or a blessing for Namibia.
There may be several benefits associated with increased mining activities.
These include employment for a few hundred workers and tax income for the Namibian government, which has announced that it plans to increase the royalties payable by mining companies for the extraction of the country's minerals.
For almost 30 years, Roessing was the only uranium company in the country.
This scenario has changed.
A second uranium mine, Langer Heinrich, became operational in 2007 and 40 exclusive prospecting licenses and 12 mining licenses had already been issued by September 2008.
A "uranium rush" seems to be under way, based on the assumption that nuclear power might fill the world's current energy gaps.
Namibia's uranium oxide is exported in its raw form and enriched in countries with uranium converters such as France, the US, Canada and China.
But the cons must be factored into the equation.
Exposure to even relatively low levels of radiation over a long period can be extremely harmful to the health of workers and communities living around uranium mines.
Several workers who spent long years working at uranium mines developed serious health problems.
Cancerous strains are commonplace as workers are exposed to dust and radon gas daily and thus develop diseases such as TB and lung cancer.
lthough mining companies usually deny any responsibility and refuse to compensate workers, there is increasing evidence of a link between uranium mining and workers' health problems.
Uranium mining uses an enormous amount of water.
In a recent article in The Namibian, the writer pointed out that the proposed uranium mine by the Canadian company Forsys Metals, would use 1 million litres of water each day.
Situated on the Valencia farm in the Erongo region, the mine would consume in only three months the amount of water that the current users in the area would consume in 36 years.
Given that all existing and envisaged uranium mines are in the Namib desert, one needs to ask if it is wise to spend Namibia's most scarce resource - water - on mining operations that may only ring short-term benefits.
All existing and proposed uranium mining sites are in the Namib desert, mostly in the protected area of the Namib Naukluft Park.
Besides using huge amounts of water, uranium mining also leaves large craters as it relies on open-pit operations.
Once mining activities cease, the huge holes remain.
Furthermore, radioactive dust particles may be blown over many kilometres.
This brings mining into direct conflict with tourism ventures that rely on Namibia's natural beauty as a main attraction.
International minerals' prices have a direct impact on the viability of mining operations.
The globe is experiencing a plummet in copper prices.
Copper firm Weatherly International has just recently announced that it will retrench 643 workers in Namibia due to this slump.
Similarly, uranium oxide prices dropped by almost 70 per cent between July and October 2008.
This raises doubts about the viability and sustainability of uranium mining.
Few countries are considering an expansion of their nuclear energy programmes due to the costs and risks involved and this has a direct impact on uranium prices.
Namibia currently does not have a comprehensive legislative framework to deal with all the implications of uranium mining.
This makes the country open to abuse by companies who pursue an agenda of short-term profits and pay very little attention to the long-term consequences for the host country.
The Ministry of Mines and Energy is finalising a new law governing uranium mining, but close monitoring will also be required to prevent abuses.
This requires a high level of technical competence and political will.
It is telling that Canadian and Australian mining companies seem to spearhead the new rush for Africa's uranium.
Despite high quality uranium deposits in their own countries, they are focusing on Africa's uranium resources, with Niger, Malawi, Tanzania and Namibia the main targets.
There seems to be only one explanation for this paradox: labour costs are higher, and environmental restrictions are more stringent in Australia and Canada.
In April 2006, the managing director of Paladin stated that "the Canadians and Australians have become oversophisticated in their environmental and social concerns over uranium mining.
The future is in Africa.
This makes a proper cost-benefit analysis of uranium mining an absolute necessity.
The disastrous Ramatex investment has shown that blind faith in investors can cost workers and the host country dearly.
When assessing the prospects of uranium mining, there is a need to look beyond the short-term effects and consider the long-term implications for Namibia.
- The author works as a senior researcher for the Labour Resource and Research Institute (LaRRI)
Mega uranium deal with Russia
by Sandeep Dikshit
6th December 2008
NEW DELHI: India and Russia on Friday signed agreements that would eliminate the supply-demand mismatch in uranium and enable the setting up of more state-of-the-art nuclear power plants in India.
At a summit meeting with Prime Minister Manmohan Singh, Russian President Dmitry Medvedev put the final touches on a mega agreement to supply nearly 2,000 tonnes of uranium. This would catapult the capacity utilisation of the existing plants to 90 per cent from an unhealthy 40 to 60 per cent due to shortage of the raw material.
Cuts short visit
Mr. Medvedev later cut short his visit and returned home following the death of the patriarch of the Russian Orthodox Church, considered a part of the ruling establishment, except for the interregnum during the Soviet era, since the time of Peter the Great.
The two sides agreed to set up four more power plants at Kudankulam, where Russia is already assisting in installing two plants. They also agreed to explore the possibility of setting up more nuclear plants, possibly two.
The contract for the supply of the raw material for the existing as well as upcoming nuclear plants at Rawatbhata is in addition to the deal struck with France to provide 300 tonnes of uranium for two proposed 1000-MW light water reactors by Areva of France at Jaitpur in Maharashtra's Ratnagiri district.
Significantly, Mr. Medvedev said he discussed the development and leasing of nuclear powered submarines. He admitted that the military relationship had both problems and prospects but dismissed the differences on purchase of military platforms as "nothing special" that could be resolved by "adjustments" by both sides. India also signed a contract for the import of 80 military helicopters for the Indian Air Force.
The space agencies of both nations agreed on plans for cooperation in manned space flights. This is in addition to their resolve to cooperate in Chandrayaan II, a key part of India's lunar space mission.
In all, the two sides signed 10 agreements, with the ones on nuclear cooperation, defence and space exploration being of substantial nature. Other pacts were signed on cooperation between stock exchange regulators, customs institutes and anti-money laundering agencies. It was also agreed to step up ties in tourism.
The two sides also came out with a joint declaration.
India is exploring uranium mining possibilities in Meghalaya, Rajasthan and Andhra Pradesh-Karnataka region but environmental clearances take time and the sophisticated mining equipment is hard to obtain.
At present, mines at Singhbhum in Jharkhand are the only source of the country's nuclear power plants but the quantity is inadequate to run the plants at full capacity. This was recently corroborated by Nuclear Power Corporation of India Limited chief S.K. Jain. He was quoted as saying that unless India was lucky to explore new reserves, shortage of fuel may jeopardise the country's nuclear energy growth plans.