Iran’s Nuclear Ambitions and Uranium Mining Implications

- October 19th, 2010

A joint venture uranium mining project in Namibia operated by the dually listed Australian and London mining giant Rio Tinto (NYSE:RTP) is considering what to do with a 15 percent stake held by the Iranian government since 1975.

By Dave Brown – Exclusive to Uranium Investing News

Iran is ready to return to nuclear discussions with major powers as early as this week but only if the subject of the negotiations is clarified in advance.  Last week, the European Union proposed a three day negotiation in Vienna for mid-November between Iran and the United States, Russia, France, Britain, China and Germany.  Iran’s terms are that a greater variety of states should participate in the discussion; the parties must say whether they seek friendship or hostility with Iran and they must state their view on the alleged nuclear arsenal of Israel.  Iran’s Atomic Energy Organization said it had launched a large-scale prospecting operation in central and southern regions of the country to locate new deposits of uranium to fuel its nascent nuclear power industry.

The Russian-built 1,000 megawatt Bushehr reactor is due to start supplying Iran’s first civilian nuclear energy in early 2011, after years of delays.  Iran insists it has every right to peaceful nuclear technology and is not endeavoring to manufacture a nuclear bomb. The country has stated that it plans to build as many as 20 reactors during the next two decades.

Mining Developments

A joint venture uranium mining project in Namibia operated by the dually listed Australian and London mining giant Rio Tinto (NYSE:RTP) is considering what to do with a 15 percent stake held by the Iranian government since 1975.

In June, the U.N. Security Council adopted a resolution which bans the sale of any stakes in uranium mines to Iran, as well as shares in any commercial operations linked to the production of nuclear materials or technology. It also says that “all states shall prohibit such investment.”  An obvious question remains on whether any previously held Iranian stakes in uranium mines or other nuclear-related operations should be divested.

Rossing Uranium Limited is in consultation with the Government of Namibia to find a solution to deal with the U.N. Resolution requirements.  The Rossing Uranium Mine in the South African country of Namibia is one of the world’s largest open-pit uranium mines. Rossing Uranium Limited sells its uranium to nuclear power plants in North America, Europe and throughout Asia.

Current Events

The Nuclear Energy Institute (NEI) is currently hosting the three day International Uranium Fuel Seminar in Savannah, Georgia which is expected to finish by Wednesday afternoon.  In the past participants have been uranium producers, utility fuel managers, nuclear fuel brokers, traders and consultants, transport operators, nuclear energy equipment and services suppliers, economists, analysts, government policymakers and regulators.

Spot Price Continues to Climb

The spot uranium market was relatively busy again this week with eight transactions reported, with utilities, producers and intermediaries all participating as buyers. Transactions involving delivery next year or in Europe were concluded at notably higher prices than deliveries in North America and before year-end.  Prices in transactions concluded this week covered a broad range depending upon delivery date and location.

A utilities company based in the US is seeking 180 thousand pounds of uranium with offers due October 25. Another utility is seeking about 400 thousand pounds for spot delivery and a forward contract for 650 thousand pounds equivalent for delivery next year.

The increase in spot activity along with significant demand in the mid- to long-term sector is exerting upward pressure on prices. Sellers continue to raise offer prices and transactions are being concluded at prices above last week’s closing spot price. As a result, the Uranium Spot Price increased to $48.25, a $0.25 premium from last week’s value.












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