Chinese power utilities now make up a significant portion of global spot uranium purchases, as the country moves to secure supplies of the nuclear fuel for reactors it is building, executives at Canadian uranium-miner Cameco said last week.

“I would expect the single largest buyer [in the year to date] would have been China,” the company’s marketing and business deve- lopment vice-president, George Assie, said on a conference call.

Chinese utilities have probably acquired some eight-million pounds in 2009, he estimated. Altogether, about 33-million pounds has been sold on the spot market so far this year, and Cameco has increased its own sales forecast for 2009 by two-million pounds, to between 34-million and 36-million pounds, the firm revealed.

About half of the spot demand is coming from utilities, traders represent around one-third, and one-sixth is purchases by producers, including Cameco itself, Assie said. According to information available to Cameco, there are now 13 reactors under construction in China, CEO Jerry Grandey said. That figure had been pegged at 11, as recently as May, and will likely continue to rise.

“There is no reason to doubt that a country with the intellectual base, educated workforce, population and energy appetite of China can do what the West did during the first nuclear building programme,” he said.

Cameco is in talks with Chinese utilities on signing longer-term contracts, but has not formalised anything yet, Grandey said.

However, China is by no means the only country with increasing nuclear capacity and uranium needs. The company expects 48 new reactors will be built in the US in the next decade, and countries in the rest of Asia and Europe are also building new reactors and expanding nuclear programmes. “All this means that global uranium supply will need to increase over the next decade,” Grandey said.

Total global production last year reached 114-million pounds, and Cameco is forecasting world production of between 125-million and 130-million pounds for 2009.

Based on its existing assets and plans, the company could double production, to 40-million pounds a year, in the next decade, Grandey said.

The company has also announced it will file a shelf prospectus in Canada for offerings of up to C$1-billion in senior debt, which will increase its financial ‘flexibility’ to take advantage of opportunities that arise. But

Grandey emphasised that the company was not under any pressure to grow through acquisitions.
“As we have stated consistently, Cameco is not going to overpay for an acquisition.”

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