Laguna Beach, California
Tuesday, March 6, 2007 ------------------------------ - Near vertical spot prices for one particularly volatile resource,
- Beating the trend on energy's next wave
- A birthday bash without a bang and plenty more…
Joel Bowman reports from Laguna Beach… Nuclear power celebrated its 50th birthday almost three years ago…without a bang, thankfully. To mark the occasion, 500 of the world's top nuclear technicians convened in Moscow for the "International Conference on Fifty Years of Nuclear Power - the Next Fifty Years." The optimistic, forward-looking title of the conference reflected the conviction that nuclear energy is here to stay. Despite a 50-year history that included disasters like Three Mile Island (1979) and Chernobyl (1986), the nuclear power industry had managed to survive…and ultimately, to thrive. The stigma of these infamous tragedies had slowly faded away, as global warming became the environmental anxiety du jour. "The more we look to the future," the International Atomic Energy Agency's Director General, Mohamed ElBaradei, confidently declared to the Moscow conference attendees, "the more we can expect countries to be considering the potential benefits that expanding nuclear power has to offer for the global environment and for economic growth." So, what has transpired in the world of nuclear power since the Moscow birthday bash? For one thing, the spot price of uranium has climbed to vertiginous heights. 
No region of the globe should be relishing the soaring uranium price more than Australia - home to more than one third of the world's known uranium reserves. And yet, due to Australia's long-standing "no nukes" policies, the country seems to consider its vast uranium reserves to be an embarrassment of riches…literally. The Land Down Under's quirky mining laws have stifled uranium exploration for more than two decades. But these laws might soon undergo an overhaul that would spur a new wave of uranium exploration throughout Australia. Obviously, the higher the uranium price soars, the greater the incentive to unfetter the uranium mining industry. No politician in Australia can afford to ignore the potential tax revenues the increased uranium mining would yield. Furthermore, from a top-down macroeconomic standpoint, the future of nuclear power remains bright. An article in the MIT Technology Review discussing exciting new advancements in the efficiency and cost of nuclear power finds it worth noting that it is also, "the only existing energy technology that's both proven and zero carbon." These virtues have transformed nuclear energy from environmentalist whipping boy to modern-day savior. As global warming and greenhouse gas emissions occupy a growing slice of political bandwidth, nuclear power will gain a growing slice of the global power-supply market. 435 nuclear reactors operate in 30 countries, according to the International Atomic Energy Agency's Web site, while another 30 are under construction. Obviously, an increasing population of nuclear reactors will produce a rising demand for uranium - an ideal condition for the companies that pull it out of the ground. Already, the demand for uranium vastly outstrips mined supplies. 
The 435 existing reactors in the world consume about 180 million pounds of uranium a year. But worldwide production of uranium totals only about 100 million pounds. Where does the other 80 million pounds come from? The nearby chart answers the question. Above-ground stockpiles have been filling the supply gap that mined supplies could not. But as these stockpiles decline, mined supplies will have to fill the void. Where will these mined supplies come from? Your junior editor's native land seems like a leading candidate. But Australia will not be able to ramp up its production unless the politicians change a law or two. This groundbreaking legislative event may be drawing very near, as Chris Gilpin of Casey's Energy Speculator explains below… ----- Resource Investing Report ----- -------------------------------------------- The Australian Renaissance
By Chris Gilpin Australia is poised for a breakout in uranium production. The land down under hosts 36% of the world's known uranium resources, and yet it accounts for only 23% of global output. But a renaissance of Australian uranium production might soon begin…on April 29th to be exact. That's the date the Labour Party concludes it 3-day national conference. Uranium mining is sure to be on the agenda. Their leader, Kevin Rudd, supports a rethinking of Labour's traditional opposition to uranium mining. If other ranking Labour party members embrace Rudd's point of view, mining policies could change very rapidly, to the benefit of the uranium mining industry. Here's why: A federal election must occur in Australia sometime in the second half of 2007. Kevin Rudd is a popular figure, and polls show that Labour has pulled ahead of John Howard's ruling coalition for the first time in years. The last Morgan poll gives Labour 48% of the popular vote, while John Howard's coalition sits at 38%. Furthermore, Labour holds the balance of power in each and every one of Australia's states and territories. Its regional governments' attitudes toward yellowcake vary. New South Wales and Victoria ban all uranium-related industrial activity, even exploration. Queensland and Western Australia straddle the fence, allowing uranium exploration but not uranium mining. Tasmania has no ban in place, but has never drawn interest from uranium explorers. Only South Australia and the Northern Territory (neighbors in the middle of the continent) have allowed uranium mining. Assuming, therefore, that Labour relaxes its opposition to uranium mining, and assuming that Labour wins the upcoming national election, the uranium mining industry would finally break free from the political shackles that have been restraining its growth. For example, Queensland's premier, Peter Beattie, says that his state will fall in line with the policy that reaches consensus at April's gathering, which could signal an immediate boon to companies working in that province. The stakes are enormous. Because of past governmental disincentives, few of Australia's prospective uranium regions have been explored with up-to-date technology. There's big potential for a significant discovery in the Northern Territory, where, according to a November 2006 report by the Northern Territory Minerals Council, only 20% to 25% of the prospective rock units have been effectively explored. Most likely this holds true for other regions of Australia as well. Today airborne electromagnetic surveys can yield useful data from ten times deeper into formations than they could in the 1970s. Many authorities, including the Uranium Information Centre and Geoscience Australia, believe that past exploration was superficial by today's standards and that there are several resources at depth waiting to be found. A look at history makes it even more apparent how groundbreaking Labour's potential change of attitude could be. In 1984, the federal Labour government instituted the "three mines policy," which was intended to eventually end all uranium mining in Australia. The law stipulated that only the three uranium mines in production at the time would be given permits to export uranium: the Olympic Dam project (the world's largest uranium mine) in the state of South Australia, and the Ranger and Nabarlek mines in the Northern Territory. Provisional approvals for other would-be uranium mines were cancelled. Labour's notion was that when the three producing deposits had been exhausted, uranium mining in Australia would be finished for good. Exploration cratered, and today Australia's known resources are little changed from what they were 20 years ago. After John Howard's coalition government swept into power in 1996, it scrapped the three mines policy. But because state and territorial governments were all dominated by the Labour party, the uranium industry still made little progress. In fact, the Nabarlek mine had already shut down in 1988, leaving only two mines in operation. In 2000, the Beverley mine in South Australia opened, bringing the number back up to three. And today there is the prospect that SXR Uranium One's Honeymoon project will become Australia's fourth uranium mine. SXR Uranium One received its export permit from the federal government in January of this year, an essential step for uranium production in a country that hosts no nuclear facilities. With Labour well-positioned to win the 2007 federal election, that party's stance on uranium will be pivotal for Australian exploration companies and, indeed, for the global uranium market as a whole. This April's conference will provide crucial clues as to the shape of things ahead. Stay tuned. Joel's Note: Chris Gilpin appears courtesy of the Casey Energy Speculator. Last year this small group of researches, led by veteran Doug Casey himself, posted some impressive gains including Cameco, up 895%, International Uranium, up 2,112%, Paladin, up 1,413%. Getting in early on the trend is critical. If you think you might be interested in learning more about the exciting world of international energy investing, you could do far worse than reading more from the team at Casey Research. To learn more, click here: Casey Energy Speculator | 
