Uranium Week: Australia’s Nuclear Opportunity

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As the spot price of uranium climbed just over 6% last week, a key Australian government adviser is arguing for nuclear.

-Small-scale reactors versus large-scale batteries
-Rolls Royce creates small modular reactor business
-Price required by Paladin Energy for a restart of Langer Heinrich
-The spot price of uranium increases by just over 6% for the week

By Mark Woodruff

One of the main architects of Prime Minister Scott Morrison’s gas-focused stimulus package suggests nuclear power represents a strategic regional opportunity for Australia.

Andrew Liveris, the former chief executive of Dow Chemicals, believes the country needs to overcome concerns about nuclear power and instead see its potential for reducing carbon emissions.

Liveris notes that small-scale reactors are “more proven” than using large-scale batteries to store renewable energy and suggests Australia should reallocate its aging fleet of coal-fired power plants with nuclear technology.

Liveris’s suggestion is that a carbon price of between US $ 40 and US $ 80 / tonne should be set by the government to encourage companies to reduce their carbon-emitting activities. Europe has had a carbon price for 16 years while California has a working model.

The comments come after recent major nuclear announcements from China, which plans to build some 150 new reactors over the next 15 years as part of its emissions reduction plans.

France also intends to build new reactors as the basis for a reindustrialised and low-carbon economy, while the United Kingdom has recently introduced new financing for large reactors and financed the marketing of small reactors.

Following a capital increase, UK-based Rolls-Royce announced that the Rolls-Royce Small Modular Reactor (SMR) business was established to advance and deliver the next generation of nuclear technology to low cost and low carbon emission.

If approved for use in the UK, Rolls-Royce SMR could build up to 16 reactors across the country by the 2030s.

Company News

ASX side Energy Paladin ((PDN)) is the premium and most liquid uranium industry name on ASX, according to Shaw and Partners, and is the broker’s preferred exposure to an improving uranium market.

Following the release of a reserve / resource status update by management, the analyst notes a well-defined, low-risk production route for the 75% -owned Langer Heinrich uranium mine in Namibia .

It’s raw a contact price above US $ 50 / lb will allow operations to restart.

In addition to Langer Heinrich, the company has a large portfolio of high-grade exploration, notes the broker.

Uranium price

The TradeTech Weekly Cash price The indicator ended last week at US $ 46.20 / lb, up US $ 2.70 / lb from the previous week. After the 6% increase, the spot price indicator is up 24% over the past two months, and nearly 70% since the 2021 low of US $ 27.40 seen last March.

The price of uranium has increased 52% year-to-date and 57% year-on-year. The average weekly spot price in 2021 is US $ 33.79 / lb, which is US $ 4.08 / lb above the 2020 average.

There was around 2.5ml of U3O8 exchanged last week, up from 1.8ml the week before. Buyers of the week included financial entities, utilities, traders and producers, while sellers included traders, financial entities and producers, reports industry consultant TradeTech.

TradeTech futures price iThe indicators are US $ 43.75 / lb (medium) and US $ 45 / lb (long).

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