With strong support from governments the uranium market and its key players will provide "real investment opportunities and long-term outperformance."
A study by Southern Cross Equities on the uranium market chose Paladin Resources as a favoured vehicle for increased performance. It says that in the near term, with Canada's Cigar Lake project seriously delayed, that Kazakhstan may take up some of the required new supply for a growing global nuclear industry.
However, Southern Cross Equities' study pointed out that, like many countries, Kazakhstan is suffering massive skilled labour and infrastructure shortages, and new production could suffer serious delays.
"We believe a meaningful uranium supply response will be delayed until at least 2011," the report said.
Implications of the unexpected delay on Cigar Lake cannot be underestimated. Considering there is a 4-5 year lead time to convert uranium to a reactor fuel source, utilities require long-dated contracts of at least five years for security of supply. "Consequently, the massive spike in the uranium spot price is reflecting a significant gap in the supply horizon. Despite market scepticism, we think the current uranium spot price is very sustainable for at least the next 4-5 years."
A study by Southern Cross Equities on the uranium market chose Paladin Resources as a favoured vehicle for increased performance. It says that in the near term, with Canada's Cigar Lake project seriously delayed, that Kazakhstan may take up some of the required new supply for a growing global nuclear industry.
However, Southern Cross Equities' study pointed out that, like many countries, Kazakhstan is suffering massive skilled labour and infrastructure shortages, and new production could suffer serious delays.
"We believe a meaningful uranium supply response will be delayed until at least 2011," the report said.
Implications of the unexpected delay on Cigar Lake cannot be underestimated. Considering there is a 4-5 year lead time to convert uranium to a reactor fuel source, utilities require long-dated contracts of at least five years for security of supply. "Consequently, the massive spike in the uranium spot price is reflecting a significant gap in the supply horizon. Despite market scepticism, we think the current uranium spot price is very sustainable for at least the next 4-5 years."
