Bright future for energy, including uranium, says Rio
Alex MacDonald From: The Australian March 21, 2011 12:00AM
RIO Tinto says investment in energy remains a core part of its business and told analysts at an investor meeting that the outlook for uranium remains intact despite the nuclear crisis in Japan.
The chief executive of Rio Tinto's energy division, Doug Ritchie, said in a presentation published on the company's website that the uranium market was forecast to remain in balance to 2020 as expanding output kept pace with rising demand.
Mr Ritchie made no mention in the presentation about the problems at Japan's crippled Fukushima Daiichi nuclear facility or whether it would have any bearing on the company's future uranium investment decisions.
The Fukushima facility is teetering on the verge of a nuclear meltdown after the plant suffered severe damage following last week's earthquake and tsunami.
Citigroup analysts said in a note after an energy roundtable with Mr Ritchie that he still believed the uranium story despite the tragedy in Japan.
"Doug Ritchie . . . does not expect the events at the Fukushima plant to derail the nuclear energy programs in China or India," Citi analysts Heath Jansen and Michael Flitton said in the note. "The energy requirement faced by both these countries is simply too great to exclude the nuclear option."The analysts said necessary reviews, which could take up to a year, were more likely to lead to enhanced engineering safety standards than a reduction in program spending.
China said earlier this week that it would temporarily suspend the approval of new nuclear programs, while India said it would thoroughly review its nuclear safety standards. China plans to develop 40 gigawatts of nuclear power over the next five years, almost four times the 10.8 gigawatts currently operational.
Global demand for nuclear power is forecast to rise at a compounded annual growth rate of 1.7 per cent between 2008 and 2030 and account for 6 per cent of the world's primary energy by 2030, according to the International Energy Agency's latest World Energy Outlook.
Chinese nuclear power demand is forecast to grow at a compound annual growth rate of 10.4 per cent during that period.
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