nuclear

TVA Watts Bar Nuclear Power Plant | Photo: Tennessee Valley Authority

Discovery Investing's Chris Berry says he's just returned from the SME Global Uranium Symposium last week in Corpus Christi, Texas, with his tail between his legs. "It appears that any “nuclear renaissance” will be delayed for some time due to a confluence of factors...This offers investors perhaps the most precious commodity of all – time – to assess investment prospects in the space as the situation slowly turns."

Berry continued:

The slowdown (to a virtual halt) of Japanese nuclear reactor restarts is perhaps one of the biggest surprises as many thought at least several of the reactors would be back online by now. Currently, all 50 are off-line though TEPCO and other utilities have requested inspections for 14 reactors. The shutdown in Japan has added up to 15 million pounds of excess uranium to the global market which is another reason the U3O8 prices remain depressed. I have also seen reports of much more supply currently on the market.

There are other reasons for the subdued outlook for uranium we have discussed before including the low price of shale gas in the US, plant shut downs (San Onofre in California and Vermont Yankee), and a required breakeven price of approximately $70 per pound of U3O8 (to justify majors such as Areva or Cameco expanding operations). Skittishness about the high upfront costs of a nuclear build out and indecision about what to do with the nuclear waste are additional issues the industry must MORNING NOTES October 9, 2013 reckon with. A White House not especially enamored with the mining industry in general is also another challenge (in the United States).

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