Nuclear power has been a hot topic of recent. And as a result, the price action of its input commodity has been quite schizophrenic. Investors and speculators are in a state of great wonderment over what to expect from this intriguing mineral that is mined for energy.
Based on its core strategic fundamentals, investors ought to be wildly bullish on uraniums future. But with a veil of uncertainty cast over it thanks to the tragic Fukushima disaster, should we be looking at the future differently? Of course only time will tell how things play out. But based on cold-hard rationality, my money is on a future where nuclear power is an indispensible part of the worlds energy infrastructure.
This rationality is based on the fact that electricity demand is expected to increase by about 75% over the next 20 or so years. With this soaring demand, only economically-scalable sources of energy will suffice. For a variety of reasons renewable energy does not have the right combination of economics and scalability in todays environment. And while coal and natural gas will continue to be big players, the worlds push towards clean energy pits a lot of objections to these sources.
Nuclear energy on the other hand is scalable, economical, sustainable, reliable, and even with such black-swan events as Chernobyl and Fukushima, it is clean. It already accounts for about 14% of the worlds electricity, and most of the worlds utilities/governments realize that nuclear power is integral to meeting future energy needs.
For these reasons and more uranium, the commodity that fuels nuclear power, is in the midst of an incredibly-powerful bull market. And based on the economic imbalance of the uranium market, this bull ought to plow forward for many years to come.
Also another topic which I have been keeping a close eye on is SA mining nationalisation.Here are a couple of conflicting stories on the matter. I suppose it depends on which minister you most believe. Still, something which should not be taken lightly.Certainly no downramp,I think I would be negligant if I didn't keep it in mind.
JOHANNESBURG (miningweekly.com) Asking whether South Africa should nationalise its mining industry was the wrong, dangerous question to ask in searching for the answer to South Africas evil triplets of poverty, inequality and unemployment, said Mineral Resources Minister Susan Shabangu.
Shabangu, who addressed a mine-nationalisation forum organised by The New Age daily newspaper in Johannesburg, became the third South African Cabinet Minister in two days to debunk the mine nationalisation debate.
South Africa mine nationalization closest since end of apartheid Frik Els | August 2, 2011
Businessweek quotes a confidential report prepared for South Africas mining CEOs as saying South Africas ruling party is closer to some form of nationalization than at any other time since the end of apartheid. A government takeover of mines could choke investments in a country with metal and mineral reserves estimated at 2.5 trillion and lead to a collapse of the currency, the rand.
Firebrand Julius Malema (pictured), the leader of the youth wing of the ruling African National Congress which often acts as kingmaker in the countrys politics, is spearheading the campaign to seize mines, farms and banks. Malema is never far from headlines in the country with racially charged comments but now an anti-corruption police unit is probing a trust fund owned by him allegedly being used to funnel payments in exchange for securing government tenders.
