The Future of the Uranium Market Feeding Asia’s Rapidly Growing Need
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Transcript of The Future of the Uranium Market Feeding Asia’s Rapidly Growing Need
The Future of the Uranium MarketFeeding Asia’s Rapidly
Growing Need
Milt Caplan, President
Dr. Terry Thompson, Senior Advisor
MZConsulting Inc.
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New Nuclear Build is Underway
• Nuclear renaissance takes hold• France starts construction• UK Government confirms support for
nuclear new build• First government guarantee approved in
the USA• UAE commits to new build• Numerous other countries looking to
nuclear power going forward• 62 units under construction, 158 planned
and 324 proposed*• Events in Japan at Fukushima will impact
these plans*WNA website, data for Mar 1, 2011
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New build in Asia is BOOMING!
• China has 27 units under construction• India and Korea another 10• China and India
– 7% of plants in operation– ~ half of those under construction, planned
and proposed• Korea has 21 in operation and another 11
underway and is becoming an exporter of nuclear power
Note: Russia has 8 units under construction, 14 planned and 30 proposed.
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Global Uranium Supply & Demand
WNA Market Report 2009
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China
• Current capacity – 13 units, 10,000 MW• Planned growth
– Original plan to 2020 – 40,000 MW– Increasing target to 75,000 - 80,000 MW by 2020– Continued growth to 200,000 MW by 2030
• Uranium requirements – 4,400 tonnes in 2011 (first cores)– to 2020
• 8,000 tonnes per year base• 15,000 tonnes per year or 30% of current
production!– To 2030
• 40,000 tonnes per year!!
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India
• Current capacity 4,400 MW• Planned growth
– 20,000 MW by 2020– 63,000 MW by 2032
• Opening to the world• Uranium demand
– 1,000 tonnes in 2010– 4,000 tonnes by 2020– 12,000 tonnes by 2030
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Korea
• Current Capacity 21 units, 18,700 MW• Planned growth
– to 2020 27,000 MW– to 2030 35,000 MW
• Uranium Demand– 3,600 tonnes in 2011– 5,400 tonnes in 2020– 7,000 tonnes in 2030
• Korea planning to become a major exporter of nuclear power to the world
Total Demand (tU/yr)
Country Demand2020
Demand2030
China 15,000 40,000India 4,000 12,000Korea 5,400 7,000Total Demand 24,400 69,000
• About half of primary production in 2009• Almost 40% more than primary production
in 2009
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Uranium Resources
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Production by Country
Country Production tU2009
Kazakhstan 13820Canada 10173Australia 7982Africa 7869Russia 3564Uzbekistan 2429USA 1453Others 3282Total 50572
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Production by CompanyCompany Production tU
2009Areva 8623Cameco 8000Rio Tinto 7963KazAtomProm 7433ARMZ 4624BHP Billiton 2955Navoi 2429Uranium One 1368Paladin 1210General Atomics 583Other 5384Total 50572
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Where will it come from?
• Strategy has three major components– Domestic production– Foreign purchase– Investment in foreign resource
• Development of a strategic inventory
• Requirement for uranium supply when contracting for foreign plant
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The rise of State Capitalism
• State Capitalism– State dominates the market– Primarily to meet political
goals rather than individual goals in a free market economy
– Huge sovereign wealth funds used to meet country objectives
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Politics
• Australia has policy of not exporting uranium to India
• Canada has policy limiting foreign ownership of mines to 49%
• China prefers to have control of resources rather than minority shares
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Recent Market Activity Country Market ActivitiesKorea • Investments in uranium producers (Denison Mines)
• Investments in uranium Juniors• Investments to support new enrichment
China • Concluded agreement with Cameco for uranium purchase• Invested in uranium juniors in Africa, Australia and Mongolia• Purchased 17,136 tonnes in 2010 to bolster strategic reserve• Started production from Chinese owned mine in Africa (Azlik)
India • Purchased uranium from Russia and from Areva• Not yet entered the foreign production market
Note: Russia has been very aggressive in it expansion with the strategic investment in Uranium One
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The New World of Uranium
• By 2020 demand in China, Korea and India will be about 25,000 tU/yr
• Will require about a third of global production
• Will invest in new and existing mines
• Will invest in new and existing companies
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Summary• Significant growth in nuclear power• Most of the growth will be in Asia• Large Asian users have little resource and will
want to ensure security of supply• State driven economies will impact strategies• China, India and Korea will follow a multi-
dimensional strategy including investing in the resource
• Decisions continue to be affected by politics
The uranium market will fundamentally change as the large users move from the west to Asia!