I have not been a big supporter of uranium stocks and the recent news that China has developed a process for reprocessing uranium could only add to the downside. There is good reason for thinking that China will explore this process route to reprocess nuclear waste for power generation, however at the end of the day, there is no shortage of uranium resources. I think Australia alone has enough to last the world 7,000 years, and that is kind of by tripping over the stuff accidentally looking for more 'PC-friendly' minerals.
The problem for uranium is not the fuel cost it is the capital (plant) cost. The benefit is that reprocessing will at least mean reduced waste disposal issues, and probably total desensitisation of that issue, though of course waste and reprocessed fuel still has to be transported to and from a centralised facility.
Uranium prices are still high I think but that is just because of the high cost of alternative energy resources. If more nuclear plants are built, other fuels will fall. The problem is - too many people are opposed to nuclear. One of course has to worry about the management record of Chinese plants; particularly as the management of Japanese plants has often been shaky. There have been a few scares in Japan, but the new designs in China ought to be 'fail-safe' in design; assuming they are properly constructed 'to design'. That is the worry.
The Japanese will be very nervous since they are down-wind. The prospect of China importing a lot of fuel has to be good for Australia in particular, and probably some Russian and Canadian projects. Picking the winners to benefit from Chinese support - good luck with that! I'll still with gold, copper, as its easier to sell.
Source: New Chinese Nuclear Technology and Waste Fuel Reprocessing.
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Andrew Sheldon www.sheldonthinks.com
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