"Surging Chinese demand for uranium looks set to drive a fresh wave of Chinese investment in Australia-listed miners as nuclear power generators seek supply for dozens of planned reactors.
Chinese state-owned enterprises have been active in Australia's mining sector for years, largely focusing on iron ore and coal used in steelmaking.
Now, with an unprecedented nuclear reactor build under way, China is turning its sights to Australian yellowcake stocks. Many miners see the Asian giant as a cheap funding source and analysts expect deals to flow this year.
China Guangdong Nuclear Power Holdings Corp.'s A$83.6 million purchase of a controlling stake in Energy Metals Ltd. (EME.AU) last year highlighted both China's interest and the Australian government's willingness to approve Chinese investment in uranium projects.
China currently has 11 nuclear reactors in operation with 20 under construction. A further 36 are on the drawing board and there are proposals for another 157 plants. "
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"Chinese buyers are likely among those looking at Extract Resources Ltd. (EXT.AU), which has resources of nearly 300 million pounds and is focused on developing the Rossing South discovery in Namibia.
But Extract's cluttered share register means a full takeover looks unlikely, unless the Chinese can reach agreement with Rio Tinto Ltd. (RTP), which has a 15% stake and an adjacent mine.
BBY analyst Gavin van der Wath said there are few uranium resources on Australian soil not controlled by major miners, but there are many Australian-listed companies with projects overseas, which offer access to future production.
Bannerman Resources Ltd. (BMN.AU), A-Cap Resources Ltd. (ACB.AU) and Berkeley Resources Ltd. (BKY.AU) are junior miners with projects that would be of interest, he said. "
BMN Price at posting:
56.5¢ Sentiment: LT Buy Disclosure: Held
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