Uranium prices will still need to firm signifi-cantly to justify the development of many of the mining projects being consid-ered around the world, Jean Nortier, the CEO of Vancouver-based Uranium One, said last week.

Nortier said that he believed the market was underestimating the volume of uranium that would be needed to fuel new reactors being built or planned, especially in Asia, and over-estimating the supply, both from mines and other sources, that would be available over the coming decade.

“In our view, current prices are much too low to provide the incentive needed to bring on sufficient new supply to meet the medium- and long-term demand for uranium,” he said on a conference call.

These comments echoed similar statements Nortier made in August this year.

Uranium One produces the nuclear fuel from mines in Kazakhstan, and also has pro-jects in Australia and the US.

Nortier said he had been looking at potential acquisi-tions, but that there were only very limited opportunities out there, even fewer of which would be likely to add value for the company.

“In many of the jurisdictions that we have looked at in some detail, such as Southern Africa, it is very apparent that much higher uranium prices are going to be required to provide the economic incentive needed to move many of the new projects currently being contemplated into the construction stage and ultimately to provide a return for investors,” he said.

In Kazakhstan, now the world’s top uranium producing country, many of the new projects tended to be deeper deposits, requiring more well maintenance and greater volumes of sulphuric acid, Nortier said.

Elsewhere, in places like the US and Namibia, there had been “world class” discoveries made, but the grades were often low.

Uranium oxide concentrate for immediate delivery dropped $2,50, to $43,50/lb, last week, Bloomberg reported, citing market watcher TradeTech.

Currently, primary supply of uranium from mines actually fell short of demand, but the balance – around 50-million pounds a year – was made up by uranium supplied into the market from inventories held by governments, mainly the US and Russia.


However, these supplies were expected to decline over the next ten years, as Russia reached the end of its programme to recycle highly enriched uranium from nuclear warheads into low-enriched-uranium fuel for sale to US nuclear power plants.


The so-called ‘Megatons to Megawatts’ programme was scheduled to conclude at the end of 2013.

Further, although the US Department of Energy had created an overhang on the market by threatening to sell its substantial uranium stockpile – just over 150-million pounds – the department had now indicated that it would manage the inventories in a “responsible” way, Nortier 
said.


All things considered, Nortier estimated that primary supply would need to almost double over the next ten years to satisfy nuclear reactor requirements.

Demand Underestimated
Nortier said he also expected that growth in global power generating capacity from nuclear would surprise many people over the coming decade.


“In our view, the market continues to underestimate the extraordinary growth already under way in the current nuclear industry build-out, and the impact that this will have on the demand for uranium.”

Part of the reason for this was that the additions to nuclear generating capacity, to a large extent, were not coming from the Western world, but from China, Russia, India and Japan, he said.


There were currently 34 reactors under construction in these four countries alone, and they accounted for over 50% of the 482 reactors globally in the ‘construction’, ‘planned’ or ‘proposed’ categories.


Karatau Approval
Earlier, Uranium One reported that it had received approval from the Kazakh Ministry of Energy and Mineral Resources for its acquisition of a 50% joint-venture interest in the Karatau uranium mine, from Russia’s Atomredmetzoloto.


Nortier said he expected the deal to close by December 15.

The company was also still working on closing a C$270-million private placement transaction with a Japanese consortium, as well as its acquisition of the Irigaray in situ recovery (ISR) central processing plant, the Christensen Ranch satellite ISR facility and the associated uranium resources in the Powder River basin, in Wyoming.

Both transactions were await-ing regulatory approvals.

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