cnnc to invest in uranium resources - whe?

China Nuclear Power Companies Gear Up for IPOs
Beijing Pushes Nuclear Power to Cut Reliance on Coal
March 5, 2014 7:19 a.m., Wall Street Journal

http://online.wsj.com/news/articles/SB10001424052702303369904579420670702744700

While debate continues in Tokyo over whether to restart reactors that were shut following the Fukushima Daiichi meltdown three years ago, Beijing is approving more nuclear plants, and the country's top nuclear companies, both state-owned, are gearing up for initial public offerings they hope will raise billions of dollars to help fund future reactor construction.

China General Nuclear Power Corp., the country's biggest nuclear-energy company by installed capacity, wants to raise around US$2 billion from a Hong Kong IPO in the third quarter of this year, people with direct knowledge of the deal said. It has hired China International Capital Corp. and Deutsche Bank AG DBK.XE -0.71% to handle the listing, and proceeds will be used to expand its power projects, they said.

Beijing-based China National Nuclear Corp. is preparing for a Shanghai IPO and has hired Citic Securities Co. 600030.SH -0.19% and UBS AG UBSN.VX +0.43% , according to the China Securities Regulatory Commission's website.

Although the nuclear-power operator hasn't given a fund-raising target, in 2012 it said proceeds would be allocated to five projects needing a total investment of 173.5 billion yuan ($28.3 billion).

"The two nuclear firms may need to raise more capital from the market after listing, given their big capex and expansion plans," said Castor Pang, Core Pacific-Yamaichi's head of research in Hong Kong.

"Even though the Fukushima disaster has reignited fears over nuclear safely, nuclear power will still play a core role in China's energy strategy as it is cheaper and cleaner than coal-fired power generation," Mr. Pang said.

China, the world's largest energy consumer, is pushing hard to expand its nuclear sector to trim reliance on coal, now used to generate around 70% of its power, and reduce pollution choking large parts of the country.

It resumed building nuclear-power plants in late 2012, has 20 nuclear reactors in operation and 28 under construction, nearly half the total being built world-wide, according to the World Nuclear Association, an industry body.

Nuclear power's share of total power generation in China is expected to rise to 5.1% by 2020, from 1.8% in 2010, brokerage CLSA says.

Securing enough uranium to feed its reactors is a challenge. China spent US$1.5 billion buying overseas uranium mines in the past two years, according to data provider Dealogic. In January, China National Nuclear agreed to buy a 25% stake in the Langer Heinrich mine in Namibia from Australian uranium producer Paladin Energy Ltd. PDN.AU +11.88% for US$190 million.

"We expect demand for uranium to rise over the next four to five years as new reactors from countries including China will start operating," said an official from a unit of China National Nuclear Corp. "The current market price of uranium products is still at a low level. We will continue to look for opportunities and invest in overseas uranium resources," the official said.

The price of uranium is now around $36 a pound, having fallen 46% since the Fukushima disaster.