The nuclear fuel business going forward presents many
opportunities. But those opportunities are clouded by uncertainties
larger than the strict market fundamentals that have propelled the
price of uranium from about $10 per pound yellowcake (U3O8) three
years ago to about $30 per pound today.
The nuclear fuel business should clearly benefit from the many
bullish signs indicating that nuclear power is poised to expand
around the world from the 440
reactors in operation
today to perhaps 470 by 2015, and more beyond that date.
Fueling the optimism is the recently enacted US energy
legislation, which contains a number of important
provisions intended to
jumpstart the ordering of new nuclear plants in the US; the
announcement by the US that it intends to try to liberalize nuclear
trade with India; the continued push by
China to expand nuclear
capacity; the possibility that the timetable for the phase-out of
nuclear plants in Germany may be modified after the federal election
there in September; and the growing recognition by
Australia--the country
with the world's largest uranium reserves--that uranium has
strategic importance and that its production should be encouraged.
Also encouraging is the progress that LES--a consortium of Urenco,
Westinghouse, and three US utilities, Exelon, Entergy, and Duke
Energy--is making in securing a Nuclear Regulatory Commission
license to build a uranium enrichment plant in New Mexico. The
licensing of the LES plant is considered by many to be a bellwether
for new nuclear reactor construction in the US.
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