Tuesday, December 05, 2006
Wall Street Journal uranium article
U.S. utilities have plans to open 30 new nuclear reactors, not to mention the far greater number planned or anticipated worldwide. But then there's that little problem of uranium.
The supply situation with uranium and enrichment facilities will be discussed today at an international gathering of nuclear power experts here. One speaker, Thomas L. Neff, a senior researcher at the Massachusetts Institute of Technology, says the supply issues mean that "it will take heroic efforts to fuel the expected growth in nuclear power by 2015. Under the most positive assumptions you might just get there. But they may not pan out."But then we see a total misunderstanding of basic economics:
Mr. Neff, who has followed the nuclear fuel market for 30 years, blames the tightening uranium supply on a failure to open mines in the U.S. and elsewhere. Between 1987 and 2001, he says, stockpiles of processed uranium were "sold off really cheap."
Some hedge funds, he adds, are exacerbating the situation by buying and holding uranium off the market in an effort to reap profits later.Those "hedge funds" are doing more than anyone else to increase future supply. They are the farsighted ones here. By increasing prices as quickly as possible, they're doing the market a huge favor. Otherwise prices would be a whole lot higher in the future and there'd probably be shortages eventually.
It's worth noting that the article says that Cameco now believes that the Cigar Lake Mine delay could be as long as three years.