UxC released updated uranium spot price information just before the new year began, and it shows that as of December 28, the material was selling for just US$33.75, down $1.75 from its 2014 closing price.
Yet despite that lackluster performance, the uranium sector continues to buzz with investor interest, with much of that interest stemming from advancements in nuclear power. Here’s a look at some recent nuclear power developments and what 2016 may bring on that front.
All eyes on nuclear power
In 2015, the world’s nuclear power generation capacity increased slightly, with 10 new reactors coming online and eight old ones being permanently shut down. As World Nuclear News states, 2015 saw 9,497 MWe get connected to the grid, up significantly from the 4,763 MWe added in 2014.
Looking ahead, 2016 is expected to be another good year for nuclear power, particularly in terms of commitments from China and India. Indeed, the former has already committed to adding as many as eight new reactors to its fleet each year over the next four years — that means 40 new nuclear reactors will be built in China between 2015 and 2020.
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Meanwhile, India currently has nuclear power capacity of 5.7 GW, and is set to increase that to 10 GW over the next four years. The country is currently in the final stages of negotiations with Westinghouse for six AP1000 nuclear power reactors for Gujarat.
Unfortunately, the country has hit a snag: cost. “The stumbling block is economics, as installing a nuclear plant has to be affordable to sell its power at a competitive rate,” former Atomic Energy Commission chairman Srikumar Banerjee told IANS. Banerjee has suggested that if “suppliers agree to shift production to India through joint ventures with private firms,” costs could be reduced enough to make nuclear power a more viable option.
India also signed several agreements with Russia on Prime Minister Nerendra Modi’s most recent visit, several of which relate to nuclear power. In a joint statement following their talks, Modi and Russian President Vladimir Putin said that “cooperation between the two countries on the peaceful use of nuclear energy was a ‘cornerstone’ of their strategic partnership.”
“The pace of our cooperation in nuclear energy is increasing. We are making progress on our plans for 12 Russian nuclear reactors at two sites. The agreement today will increase Indian manufacturing content in these reactors. It supports my mission of Make in India. I thank President Putin for his support.” Modi added.
Company news: Peninsula Energy and CanAlaska
The uranium was recovered from the company’s Ross permit area within the Lance projects. Production well flow rates continue to be encouraging, and the company is beginning to commission a second header house. Peninsula has four significant uranium concentrate sale and purchase agreements in place, and they account for a major portion of the U3O8 it will produce in its first five years of production.
Also in the news this week was uranium junior CanAlaska (TSXV:CVV), which announced that it has optioned a part of its Moon uranium project in Saskatchewan to Denison Mines (TSX:DML,NYSEMKT:DNN). The Moon project is located in the Eastern Athabasca Basin, and adjoins Denison’s world-class Wheeler River project.
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.