Uranium Overview

I have leaned on Lawrence Roulston for his research on Uranium stocks. Lawrence is the Editor of Resource Opportunities. He is a geologist with more than 20 years behind him, an analyst, CFO, Vice President, and CEO for several mid-sized exploration companies. For 17 years, he has been a resource-industry consultant and mining specialist. I like him a lot, and have asked him to write this article. . . China is consuming more and more energy. Electricity demand in China increased 16% in the first four months of this year, leading to power cuts throughout the country. Coal-fired power plants could continue to meet energy demands, except for that a large portion of the population is choking on the exhaust from burning coal. China plans to increase its nuclear capacity four-fold, building 32 new nuclear power plants within 15 years! Uranium is destined to play an ever more important role in the world energy market. There are now 40 new plants under construction around the world which will soon begin to consume uranium. Furthermore, higher utilization rates at existing nuclear power facilities will also impact the near-term uranium market. . . The uranium price has already soared from its $7 low to a recent $23.50 per pound. Mines now in the development pipeline were discovered years ago and will do little more than offset production that falls off the table as older mines are depleted. Uranium consumption (almost entirely in electric generators) has exceeded mine supply for 2 decades. The supply deficit has been made up from above-ground stocks. Over the last decade, a substantial amount of supply has come from de-commissioned nuclear weapons from the former Soviet Union. Consumption totals 170 million pounds per year, fuelling 400 reactors around the world. Total new mine supply is less than 100 million pounds per year. Some time soon a shortage of uranium will force nuclear power-plant operators to bid the price higher in order to get the supplies they need. There are some very significant investment implications. The upward trend is attracting investor interest to the uranium market in general. There aren't many players in the business, so the money flowing into this sector could have a substantial effect on visible companies. . .(April 29, 2005)