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China, a user of nuclear power since 1994, is seeking to build its own brand of atomic technology for export. The benefits should be realized for the uranium industry in the form of rising demand.
The state-controlled China National Nuclear Corp. (CNNC) is expected to spend $117.6 billion on the development of nuclear industry by 2020, according to remarks from the agency Vice President Sun Youqi on Monday.
Additionally, CNNC intends to publicly list its subsidiary CNNC Nuclear Power Co in the first half of next year, and the work of roping in strategic investors will be completed by the end of this year.
Last week, CNNC was reported to be in discussions to build a 1 gigawatt nuclear reactor in Pakistan. As a member of the Nuclear Suppliers Group (NSG), which forbids exports to nations lacking strict International Atomic Energy Agency (IAEA) safeguards, China would have to get approval to proceed with the deal.
China, a user of nuclear power since 1994, is seeking to build its own brand of atomic technology for export to benefit from rising global demand. Its sale of reactors to Pakistan has drawn criticism from the U.S., which said additional deals may violate international rules for nuclear non-proliferation.
CNNC had constructed two reactors in Chashma, Pakistan, and signed an agreement in February to finance two additional units, each with a generation capacity of 340 megawatts.
Investment Opportunities
Cameco Corp.,(TSX:CCO) despite slightly lowering its sales forecast last month for 2010, dropped its previous guidance for uranium sales this year from a range of 31 million to 33 million to a new guidance of 30 million pounds. The change was attributed to contract deliveries now deferred by some customers until 2011, and the historically lower level of spot market uranium prices this year. In June, Cameco signed a deal with a division of CNNC to supply uranium, and the strategic alliance could mean increased revenues from the additional reactor in Pakistan.
United Uranium (ASX: UUL) signed a term sheet with a Chinese state sanctioned mandate on Monday, to actively source a variety of minerals throughout the world to support China’s, industries and economic growth. Although the agreement is not directly linked with CNNC, the relative proximity to the region and familiarity with international business practices could see potential benefits for the company from increased activity in Asia.
Symposium Summary
More than 750 nuclear fuel professionals gathered earlier this month at the Central Hall Westminster in London to attend the World Nuclear Association’s 35th Annual Symposium. The theme of this year’s conference was “The Nuclear Resurgence: Fulfilling our Potential.” Last year, the conference focus was on “Nuclear Revival: Building Confidence at a Time of Uncertainty.”
This year, presentations were made by a number of significant international market representatives and sessions covered a wide variety of issues including nuclear market infrastructure in emerging markets, long-term sustainability of nuclear power, practical implementation of new nuclear build and investor confidence in the global nuclear industry.
Market participants were given updates on China’s reactor build progress; Kazakhstan’s plans for increasing uranium production up to 25,000 tons and becoming a vertically integrated company with full front-end nuclear fuel cycle capabilities; Cameco’s Cigar Lake project and expected start up in 2013; new uranium production prospects in Australia; and financing new reactor projects.
Uranium Spot Price Rangebound
Within the focus of long-term strategic issues, the uranium spot market was relatively quiet with only three transactions reported. Both buyers and sellers paused to assess their positions resulting in an unchanged uranium spot price this week at $48.00 per pound as reported by TradeTech.
