Antinuclear

Worldwide, uranium mining declining, as its economic forecast sinks

Uranium miners still struggling to emerge from shadow of Fukushima Canada.com. BY PETER KOVEN, FINANCIAL POST DECEMBER 12, 2012 Following the Fukushima nuclear facility disaster in March 2011, uranium miners were quick to rationalize that the fundamentals of their business were unlikely to change and the world still needed more nuclear power.

They were wrong, to put it kindly.

The recovery in Japan has been slower than we expected More than 21 months after Fukushima, the uranium business is still stuck in a rut. Uranium’s spot price has plummeted to nearly US$40 a pound (compared to a high topping US$135 in 2007), and there has been minimal activity in the spot market. Utilities are well-supplied with uranium for the foreseeable future, and, thanks to Fukushima, the outlook for demand growth is not nearly as healthy as it was a couple
of years ago Now the question on everyone’s mind is whether things will finally start to turn around in 2013?

The market is still waiting for news on Japanese reactor restarts, while digesting Germany’s plans to get out of the nuclear business entirely. And France, which derives three-quarters of its power supply  from nuclear and is the industry’s biggest success story, is talking about scaling back its supply.

Miners have reacted by slashing capital spending and deferring
projects. Even Cameco, which maintained a bullish outlook long after
Fukushima, finally accepted reality in October and cut its long-term
production guidance.

With all of that as a backdrop, investors have seen no reason to get
excited about uranium. The stock prices of all the miners plummeted
right after Fukushima and they have not recovered……..
Most industry experts say the key catalysts to turn things around have
to come from the demand side, specifically Japan. Only two of Japan’s
50 nuclear reactors are currently operating, and the government has
said it plans to exit the nuclear industry entirely by 2040.

Even if that goal isn’t feasible, the delays in restarting the
reactors remain a concern for the market…..

December 13, 2012 - Posted by Christina Macpherson | Uncategorized