after reading this I'm of the opinion they are forward thinkers and very pro-active on the U front
Kazakhstan to Exchange Uranium Mine Shares for Stakes in Chinese Nuclear Power Projects
By Terry Wang 21 Nov 2007 at 09:09 AM GMT-05:00
SHANGHAI (Interfax-China) -- The president of Kazakhstan's state-run nuclear power company Kazatomprom has revealed that the company intends to swap some of its shares in a uranium mine in exchange for stakes in Chinese nuclear power projects, domestic media reported today.
According to China Business News, company president Mukhtar Dzhakishev said recently that Kazatomprom will give China National Nuclear Corp. (CNNC) and China Guangdong Nuclear Power Holding Co. Ltd. (CGNPC) a combined 49% stake in a Kazakh uranium mine company in return for stakes in unspecified nuclear fuel processing facilities or nuclear power plants in China. Kazatomprom will retain a controlling 51% stake in the uranium mine.
Kazakhstan's Considerations
Lu Gang, a senior researcher with the Shanghai Institute for International Studies (SIIS), told Interfax that the move could show that Kazakhstan may intend to develop its own nuclear power industry.
"They may think that it is better to build nuclear power plants in their own country and then transmit electricity to Russia and China, instead of just exporting uranium," Lu speculated.
However, Kazakhstan does not hold the technology necessary to undertake uranium enrichment or operate nuclear power plants at the moment, and as Lu noted, "undertaking the necessary technological developments by itself could make the country subject to international pressures due to sensitivity to nuclear activity."
Lu thought that if Kazakhstan can gain stakes in China's nuclear fuel processing facilities and nuclear power plants, it will help the country get a grasp on related technologies while avoiding international pressure. "At the same time, the country can ensure ongoing uranium exports," Lu added.
Such a plan is similar to a deal Kazatomprom entered into with Japan earlier this year, with the company announcing in October that it had acquired a 10% stake in Westinghouse Electric Co. from Toshiba for $540 million, and that in return, it would ensure that Japan has access to adequate uranium supplies in the future.
Lu expressed his belief that Kazakhstan is wise to diversify its uranium export channels while also getting access to nuclear power technology.
China's Uranium Demands
Uranium imports are obviously critical for China as it continues to push forward with its ambitious nuclear power development plans, under which it aims to attain an installed nuclear power capacity of 40,000 megawatts by 2020. If the country is successful, it's annual uranium demand is expected to reach 7,000 tonnes by 2020.
China has never revealed its uranium import volumes due to national security concerns, and some government officials publicly stated in July this year that the country's domestic uranium reserves and exploitation capacity will be able to meet the demands of the 2020 nuclear power target.
However, some researchers have told Interfax that China will still need to source at least some uranium from overseas in order to fuel its nuclear power plants in the future, and that up to 30% of the country's uranium demands will have to be met by imports by 2020. Such a situation does seem to be acknowledged in government policy, with the country's 2005 to 2020 nuclear power development plan suggesting that a three-channel uranium supply system be established, with specific channels focused on domestic production, overseas exploitation and international uranium trade.
Chinese companies have made some progress in regards to overseas uranium exploitation in recent years, though domestic exploration and production efforts are reportedly still facing problems due to inadequate funding.
Li Junjie, the director of the China Atomic Energy Authority's uranium material department, told China Business News that if China hopes to meet two-thirds of its uranium demand in 2020 with domestically production uranium, some RMB 7 billion to RMB 8 billion ($0.95 billion to 1.08 billion) needs to be invested in supportive exploration activities between now and then.
A source from a nuclear power plant, who wished to remain anonymous, told Interfax that the lack of funding for uranium exploration is due to the Chinese government's tight control on domestic uranium prices, which are kept much lower than international prices.
Seemingly in response to this problem, the government has started to loosen its control on domestic uranium prices. So far this year, two uranium supply contracts have already been signed in which prices have been set in line with international prices. According to the source, the prices in the two contracts are almost double previously government-set prices.
URA Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
