Posts tagged 'Uranium'

A uranium leak?

No, not the radioactive variety. The financial market type, instead.

Here’s the (illiquid) progress of uranium futures over recent months… Read more

BHP’s Olympic Dam plans on hold

BHP Billiton is taking a step back from its planned $20bn expansion of its Olympic Dam copper and uranium mine — as many had suspected it might.

The company wrote down $346m on its investment so far in the South Australian project. That, combined with writedowns on its North American shale gas assets, led to a 21 per cent decline in its full-year profit after tax. Read more

Guangdong reopens Kalahari Minerals talks

China Guangdong Nuclear Power has reopened takeover talks with Kalahari that could lead to a deal valuing the Aim-quoted miner at more than £650m ($1bn), the FT reports. A deal had been agreed with the state-controlled Chinese company to acquire the Namibian uranium mining interests of Kalahari in March at 290p a share. But the Japan tsunami and Fukushima nuclear plant disaster prompted both sides to agree a reduced price of 270p as valuations of uranium miners fell. They were then stymied by the refusal in May of the UK’s Takeover Panel to countenance a reduction in the initial approach value of £711m, prompting the Chinese suitor to abandon its approach temporarily. Shares in Australian-listed Extract Resources, who biggest shareholder is Kalahari, rose more than 10 per cent on Monday on the news.

Hanlong bids for the rest of Sundance

China’s Sichuan Hanlong Group offered A$1.2 billion in cash for the shares of Australian-listed Sundance Resources it doesn’t own to gain control of a $4.7bn iron ore project in Cameroon, Bloomberg reports. Hanlong, which owns 18.6 per cent of Sundance, offered 50c a share for the Perth-based company, valuing it at A$1.4bn. The offer is 25 per cent higher than Sundance’s closing share price on Friday.  It is the second takeover offer in recent weeks lodged by Hanlong for an Australia-listed company exploring for minerals in Africa, Reuters notes, after it bid A$144m last month for Bannerman Resources, which is looking for uranium in Namibia.

Uranium markets, the post-Japan view

Given the scale of the original reaction to troubles at Japan’s Fukushima-Daiichi nuclear plant, it’s interesting to see the degree to which uranium ore prices have stabilized since March. Especially since the crisis itself is doing anything but.

Indeed, via RBC Capital markets on Wednesday: Read more

More on that 100,000-year ‘tail risk’

The above is a presentation from a representative of Tokyo Electric Power on the subject of spent fuel storage at the Fukushima nuclear power plant. In November 2010, it was delivered to the IAEA.

In March 2011, it understandably went viral. Read more

Uranium prices, before and after Japan

We know uranium stocks were hit badly by events at Fukushima, but here’s the effect on actual uranium ore prices, as quoted weekly by the Ux Consulting group:

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Rio Tinto, irony du jour

From the outlook section of Rio Tinto’s freshly released Annual report on Tuesday:

Global demand for uranium is expected to remain strong due to a desire for base load electricity generation with reduced greenhouse gases, as well as the need for energy security, diversity of supply and strong growth plans in China.

 Read more

Euro nuclear, paralysed and paralysing [updated]

A nasty stasis in shares in E.ON, RWE and EDF at pixel time:

 Read more

Stocks dip as traders assess Japan crisis

Global stocks are under pressure after shares in Tokyo plunged 6 per cent, while gold and Japanese government bonds jumped as the market coldly assessed the human and financial devastation wreaked by the earthquake, tsunami and nuclear crisis in the world’s third-largest economy, reports the FT’s global market overview. The FTSE All-World index is down 0.7 per cent, with many Asian bourses in positive territory. The S&P 500 on Wall Street is down 0.7 per cent, dipping below 1,300. There is little evidence of heavy flows into perceived currency havens, however. The Swiss franc is firmer, but with a gain of 0.5 per cent versus the euro, not dramatically so. The US dollar is weaker. Uranium producers lost ground over fears that a nuclear meltdown in Japan could reduce demand for nuclear energy worldwide. The yen has added to the gains it recorded on Friday when traders speculated that the Japanese unit would benefit from the repatriation of funds. It is up 0.2 per cent Y81.68 versus the dollar, compared with last week’s close of Y81.89. Benchmark core Treasuries are stronger, with the US 10-year yield down 6 basis points at 3.35 per cent. US-based Nymex crude is up, also well off its lows. Having dropped to $98.47 a barrel, it is now up 0.4 per cent to $101.52 on reports that Saudi Arabian military vehicles are moving to support the authorities in Bahrain. Brent crude is still down slightly, by 0.2 per cent, at $113.64.

Time to start watching the uranium-fossil spread

If energy markets were ever confused, it’s now.

On the one hand the Japanese earthquake immediately implies bearishness for crude oil on account of lower demand. On the other hand it implies a hike in demand for refined products. Read more

ARMZ Uranium bids for Mantra

Russia’s ARMZ Uranium Holding, the world’s fifth- largest uranium producer, agreed to buy Mantra Resources, for A$1.16bn ($1.15bn), giving it the Australian-based company’s Tanzanian assets, reports Bloomberg. ARMZ will buy Perth-based Mantra for A$8 a share, a 5.5% premium to its last trading price before the shares were halted prior to Wednesday’s takeover announcement. The all-cash offer is subject to Australian regulatory approval, the companies said. Buying Mantra will give the unit of Russia’s state-run Rosatom Corp the Mkuju River project in Tanzania and add to its controlling stake in Canada’s Uranium One that it purchased in June.

US asks China to curb nuclear plans of North Korea

The US has urged China to help rein in North Korea’s nuclear programme after reports that Pyongyang has built an extensive uranium enrichment facility which could add to the country’s stock of atomic weapons material, reports the FT. Barack Obama, the US president, has sent Stephen Bosworth, his special envoy for North Korea, to Seoul, Tokyo and Beijing in the wake of Pyongyang’s claim that it has built a facility with two thousand centrifuges to enrich uranium. The FT also reports that the Republican member of Congress due to take the top foreign policy post in the new GOP-controlled House of Representatives says she will hold up aid to the Palestinians and push for a tougher US stance on Iran. In an interview with the Financial Times, Ileana Ros-Lehtinen, the Florida Republican, made clear that she would challenge the Obama administration far more than Howard Berman, the low profile Democrat who remains the committee’s chairman until the end of the year.

Rare earth resources on bubble watch

Fears about Chinese supplies of vital rare earth elements have sent the shares of small mining companies soaring, a surge that executives and analysts warn is turning into a bubble, the FT says. China, which is responsible for around 97 per cent of current global production, recently moved to cut export quotas. An index of rare earth company shares has accordingly jumped 35 per cent in the last month alone, expanding on a post-2008 bull run. Analysts have compared the surge to the dotcom boom and the uranium bubble of 2006 to 2008, which also grew on fears over limited supply. The Macro Man blog recently covered the rise of a bubble in the sector, noting that the Chinese move will encourage end users to develop their own deposits via vertical integration, rather than buying at currently high spot metal prices.

Toshiba buys into uranium group

Toshiba is to invest $100m in one of the world’s largest producers of enriched uranium, as the top players in the nuclear industry race to secure their supply chain, the FT said. The Japanese group said it would take a stake in New York-listed USEC, which supplies more than half the US market with enriched uranium fuel.

The state of Uranium

This piece was written for FT Alphaville by Gregor Macdonald, an independent energy analyst and investor based in Amherst, Massachusetts. 

How goes uranium? Coming out of the previous recession, the uranium story tracks that of most other commodities this decade: a spectacular rise into 2007/08 that looked every bit the secular advance. Uranium’s overall percentage gain well exceeded that of other headliners like gold, copper, and oil. Read more

The latest hedge fund must-have: Uranium