Unstoppable Uranium Dundee Securities Mining Analyst David Talbot remains bullish on nuclear energy. In interviews posted on January 25 (This Time, Uranium Demand is for Real) and July 21 (Uranium and Lithium Demand Powers Stocks), he shared his thesis for industry growth.
"The demand picture hasn't really changed as much as the general media portrays. We might see uranium demand decline about 5% to 10% from where we predicted, by about 2020. But, we still expect about 240 to 280 million pounds (Mlb) of demand per year by then, which is really about an increase of 30% to 55% from here.
"Worldwide, 440 reactors are in operation, 61 under construction and 154 planned. Most of the sentiment over the past several months was driven by emotion and fear and reaction to what is being shown on the news rather than reason. Take Germany, Switzerland and Italy for example. Much of the mainstream media portrays Germany's anti-nuclear stance as the death knell for the industry. People don't understand that as recently as last September, Germany was preparing to get out of the nuclear power industry and did a sudden about face at that time by extending the deadline.
"Looking at the numbers, the effect of Germany's shutdown won't be as bad as most think, either. Germany's 17 reactors only use 5% of current demand. This was expected to decline to about 3% by 2020. Switzerland only has five reactors and 1.4 Mlb of annual requirements. That's less than 1% of world uranium demand. Italy, no reactors, none under construction, none planned. We do believe there will be cancellations and delays, but many of those countries were either on the fence to begin with or really just have smaller nuclear programs.
"China, India and Russia alone account for about 50% of the new reactor build and they're all on board. India just announced that its new liability laws are due by the end of the month. This will likely kick start the nuclear build in that country. Saudi Arabia had 16 proposed reactors, which was a pleasant surprise in the land of big oil. That news essentially negated Germany's news in the long-term. Plus, strong support out of the United Arab Emirates and the announcement of new build in the U.K. were positive signs."
Talbot suggested Fission Energy Corp. (FIS:TSX.V; FSSIF:OTCQX) and Uranerz Energy Corp. (URZ:TSX; URZ:NYSE.A) as companies that are positioned to take advantage of the inevitable demand
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