Good news about nuclear energy – November 2011 

Another report in a continuing series

Why would anyone want to work in the nuclear industry after Fukushima? The answer is that on a global scale it is a rapidly growing field. The U.S. NRC is on the verge of licensing four new 1,100 MW Westinghouse AP1000 light water reactors. Two will be at Southern's Vogtle site in Georgia and two more will be at Scana's V.C Summer site in South Carolina.

Taken together the combined value of construction of the four reactors is in the range of $25-30 billion which also includes generators, turbines, transmission lines and substations. Each project will generate 3,000-5000 construction jobs and 800-1,000 permanent jobs.

TVA is completing the Watts Bar reactor in Tennessee and has recently awarded over a billion dollars in contracts to Areva for work on completing the Bellefonte reactor in Alabama.

Overseas there are even more opportunities so get a passport and hit the road. Here are some opportunities.

Exelon to provide nuclear consulting services in China

U.S. nuclear fleet operator Exelon (NYSE:EXC) will provide consulting and training services to China's state-owned China National Nuclear Corp. (CNNC). The fact that the deal was signed indicates China wants to boost its expertise in managing nuclear power plants and cannot grow the capability from within.

Key areas of concern for China are getting experienced nuclear reactor engineers to staff an independent safety agency and to staff its new reactors. While China has downsized its expectations for growth, it still plans to build 30 Gwe of new nuclear powered generating capacity by 2015 and twice that amount by 2030. This torrid pace is unmatched by any other country.

Following the Fukushima crisis in Japan last March, China suspended the approval of new nuclear power stations, but continued work on generation III designs all of which are imports. These projects include two Areva 1,650 MW EPRs and four Westinghouse 1,100 MW AP 1000s.

Some analysts have suggested that China will scratch any new projects off its list if they use Generation II technology in favor of the passive safety features in newer designs.

SNC Lavalin expects a profit after buying AECL

Canadian construction giant SNC Lavalin, which scooped up the reactor version of AECL for a song earlier this year, says it is forecasting profits. The first glint of green will come from a contract to upgrade Argentina's Embalse Candu power station.

SNC Lavalin also told business wire services it hopes to acquire opportunities to build new reactors at Ontario's Darlington site, in Romania, and Jordan. The Ontario project is likely a shoe-in since the province is home to AECL's headquarters and nearly 4,000 people work there.

Romania has two AECL Candu reactors, but has also invited Areva and Westinghouse, along with AECL, to submit bids for more reactors at Ceravoda assuming it can get financing for the project.

Competition for up to 5,00 MW in nuclear reactor power in Jordan is more complicated since Areva is bidding a smaller, 1000 MW version of its EPR design. Russia's Atomstroyexpert is also a bidder. For its part Jordan took a step back this month postponing the bid process for the first 1,000 MW unit into 2012. The issue is how to arrange financing for the project.

Reactor deals drive demand for uranium

A key indication of how the global nuclear industry is doing, and where it is headed, comes from investments in uranium mining. For the past few months a classic bidding war has been underway in Canada over a new uranium ore deposit in the Athabasca basis in Saskatchewan. The Roughrider deposit owned by Hathor (TSE:HAT)is the subject of competing offers from Canadian uranium giant Cameco (TSE:CCO) and an equally determined effort by Australian firm Rio Tinto (ASX:RIO).

Hathor rejected an offer from Cameco based on the firm's stock price last August and urged its stockholders to accept a high price per share from Rio Tinto. Cameco then made a new offer. The bid process was still in a seesaw of secret back-and-forth as of November 21 with neither bidding making any public statements.

According to Ux Consulting the price of uranium passed $55/lb for short-term contracts last week. This is part of a longer term recovery which began last April after prices plunged in response to the Fukushima crisis in Japan.

China is chasing deals for uranium to lock up supplies for decades, with plans for more than two dozen new reactors to be built by 2030. The U.K. is moving ahead with plans for 19 GWe of new reactor construction, and if India can extract its nuclear new build from the clutches of opposition parties, there will be progress there as well.

Hathor’s Roughrider deposit is estimated to hold 17 million pound U3O8 indicated resources and 41 million pounds inferred resources. It is about 20 miles from Cameco’s Rabbit Lake uranium mill. That mill will likely have capacity for toll milling since Cameco recently announced it would move all its Cigar Lake ore at its McLean Lake mill.

In the U.S. the Uranium Energy Corp (AMEX:UEC) is expecting a radioactive materials license from the Texas Commission on Environmental Quality for the Goliad project. The Environmental Protection Agency must concur with a state action that exempts the underground aquifer for the purpose of uranium recovery operations.

On Nov 12 Uranium Energy Corp announced the completion of its first uranium sale which will be reflected in the Company’s upcoming Fiscal 2012 Q1 report. A total of 60,000 pounds of U3O8 were sold for $52 per pound for gross proceeds of $3.12 million under the terms of the multi-year uranium sales contract as originally announced on June 14, 2011.

This contract calls for the delivery of 300,000 pounds of U3O8 from the company’s Hobson processing facility over a three-year period starting in Fiscal 2012, with the price to be based on published market price indicators at the time of delivery.

# # #

Comments

Name (required)

Email (required)

Website

Enter the code shown above in the box below

Notify me of followup comments via e-mail