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As one of the smallest economies in the Middle East, Jordan is looking to expand it’s nuclear capacity, transforming the country from an energy importer to an electricity exporter.
By Dave Brown — Exclusive to Uranium Investing News
The Jordanian Atomic Energy Commission (JAEC) is reviewing competing bids to build a nuclear reactor in the country. Offers have been made by Russian nuclear company Atomstroyexport and a French-Japanese partnership including AREVA (EPA:AREVA) and Mitsubishi Heavy Industries Ltd. (TYO:7011).
Jordan, which has one of the smallest economies in the Middle East, also has limited access to water resources and other energy supplies. An earlier attack last month on a natural gas pipeline in Egypt disrupted gas supplies to the country for the fourteenth time since the Egyptian revolution last year.
This news will be of interest to uranium investors as the country may expand its nuclear capacity with an additional three reactors, all of which could transform Jordan from an energy importer to an electricity exporter. Other Middle Eastern countries with planned or proposed nuclear reactors include Saudi Arabia with 16 nuclear reactors proposed and the United Arab Emirates with ten proposed and four planned.
Currently, Jordan generates the majority of its energy from fossil fuel sources, 95 percent of which are imported from neighboring Arab countries. Although the expectation is that nuclear facilities will not be operational until 2019, it is seen as important for the country to secure a reliable energy source.
A cheaper alternative
Senior policy makers in Jordan indicate that as the result of an expanding population with an emerging industrial presence, nuclear energy is the best choice to provide energy to meet electricity demand, which is rising by more than seven percent each year. The relative cost of electricity for the country is estimated at one-quarter of its gross domestic product.
Company news
Cameco Corp. (TSX:CCO,NYSE:CCJ) reported strong first quarter earnings and operational results. The uranium producer reported a 45 percent increase in first quarter profit, selling more uranium at a higher average price. The results beat analysts’ expectations, as the company delivered adjusted earnings of 31 cents per share compared with the Thomson Reuters estimate of 28 cents a share.
In the management discussion and analysis filing, the company acknowledged that lower income taxes also contributed to the results; however, the higher earnings were partially offset by higher expenditures for exploration and administration.
Cameco President and CEO Tim Gitzel issued positive remarks, commenting, “[o]ur uranium business continues to drive our strong financial performance. This quarter, our sales volumes were up 33%, and although spot and long-term uranium prices were lower relative to a year ago, our average realized price increased.”
Future guidance
Cameco maintained its full year production forecast of 21.7 million pounds of uranium over the twelve-month period, with anticipated sales projected in the range of 31 million and 33 million pounds of uranium.
The company offered a positive outlook over the next several years with a plan to “invest significantly in expanding production at existing mines and advancing projects as we pursue our growth strategy. The projects are at various stages of development, from exploration and evaluation to construction.”
This year Cameco expects to spend $620 million on mining and development projects, using its cash on the balance sheet and cash flow from operations to cover capital requirements. As the company intends to pursue a strategy of increasing annual production to 40 million pounds by 2018, expecting the marginal yield to come from existing operations, development projects, and projects under evaluation, the prospect of merger and acquisition targets could be worth noting for investors.
Junior company news
Bannerman Resources Ltd. (TSX:BAN,ASX:BMN) reported on its quarterly operations, highlighting the completion of the Etango uranium project’s defined feasibility study last month.
Fission Energy Corp. (TSXV:FIS,ASX:FIS) announced that it encountered significant anomalous radioactivity in the final hole drilled as part of its winter program on its Patterson Lake South property. The property is a joint venture with ESO Uranium Corp. (TSXV:ESO).
Uravan Minerals Inc. (TSXV:UVN) and Cameco have signed an agreement with an option for Cameco to earn an aggregate 70 percent interest in Uravan’s Halliday and Stewardson uranium projects.
Securities Disclosure: I, Dave Brown, hold no direct investment interest in any company mentioned in this article.