uranium may have hyper price run, page-8

April 01, 2010

Nuclear Power Is Vital For Maintaining Our Ongoing Global Energy Growth Profile.

By Charles Wyatt / www.mineste.com

In the spirit of provoking a stimulating debate over Easter which could result in a profitable investment thereafter we offer a single word - uranium. There was an uptick of a dollar or so in the price of uranium last week to US$42.25 per pound, but no one should forget that the price was as high as US$128 per pound in 2007. OK, all prices of metals and minerals were near all-time highs in that year, but then followed the crash. Since then, most have caught up significantly since the dark days at the end of 2008. The exception is uranium, but the fundamental case for it in terms of supply and demand has not changed: it has grown stronger.

Spring is here again and with the new buds and shoots has come a new mindset among the population of the world. No longer do they want to be fleeced of what money they have hung onto through the recession in the name of climate change and global warming. As Abraham Lincoln said: " you can fool all of the people some of the time and some of the people all of the time, but you cannot fool all of the people all of the time ". No truer words have been said, but a motley collection of politicians, scientists and greenies have managed, very conveniently, to muddle global warming and climate change in a way that made fools out of a lot of people.

The scepticism of the hoi polloi has finally reached the ears of politicians and many, such as Presidents Sarkozy and Obama, realise they have more pressing problems at home. Pragmatically, Western nations are not going to enforce greenhouse targets or standards at a significant cost, if they are going to be left at an economic disadvantage to major developing nations such as China and India who do not comply.

There has always been climate change, so what is new about that? Global warming is a different matter, but can the Meteorological Office, which cannot forecast weather accurately four days ahead, tell us what is going to happen 40 years hence? What we should be fearing instead are peak oil and atmospheric pollution, but these realities rarely get a mention.

Still, we cannot go on using oil and gas to generate power at present rates for much longer. Back in 2007 Mark Simmons, founder and chairman of what was then the world's largest energy investment banking company, Simmons and Co. International, reckoned we had passed the peak two years earlier. Oil and gas are becoming ever more difficult and expensive to find and recover. And whenever fossil fuels are burned to generate power or drive machinery more carbon particles are released into the atmosphere causing as much danger to our lungs as a pack of cigarettes.

Every effort is being made to lessen pollution by cars, but again we have been fooled. CO2 is named as the culprit when it is the very staff of life. Without CO2 in the atmosphere all plants would die and we would follow. The only efficient form of non-polluting energy, which is not dependent on fossil fuels, comes from nuclear power stations. And the fuel for nuclear power stations is uranium. Greenies like to spread the word that nuclear reactors are dangerous, but it is simply not true. The new generation is as safe as it is possible to be.

It is a question that cannot be ducked. If we want to keep the lights on in 20 years time and have a cleaner atmosphere we have to build nuclear power stations now. Wind power is inefficient and has to be subsidised by its own consumers, as Tracy Corrigan of the Daily Telegraph pointed out recently. These stations take the best part of ten years to build, and uranium mines take almost as long from discovery to production. No use building power stations unless there is a firm supply of fuel, so the pressure is on the junior explorers to come up with the goods.

Minesite is not a tip sheet so we will not produce a list of junior exploration companies most likely to succeed, but any investor worthy of the name should have some exposure to uranium in their portfolio. It is the fuel that underpins the future for the world. That is our thought for Easter. Last word to brokers WH Ireland: " hundreds of new nuclear reactors will have to be built just to maintain our on-going global energy growth profile ". What will that do for the price of uranium and the ratings of uranium companies?