A Wal-Mart nuclear business plan: Uranium

A Wal-Mart nuclear business plan at the source: Uranium


The question is how does this relate to the uprate -tangentially
We seem to be at the beginning of a huge price hike in Uranium price.
This isn't an American source of energy.
What would the meaning to VY be if the makers of their fuel become unstable -if the refining, manufacture, making fuel specifications (GE) became highly unstable.
All eyes are on USEC http://finance.yahoo.com/q?d=t&s=USU -with their CEO being terminated from his job --I've heard it as being an explosion for the nuclear industry.
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If this is the prefect template of the ideology of free market and competitions -then this ideology is not adequate for the management of the nuclear industry. You know I'm not anti free markets -it just that you have to have extreme integrity and transparency --and all the agendas have to be placed on the table. Competition and free market are a futuristic and dynamic system -it's just that everyone has to have the same level of information -there is just to many agendas that are not being seen and it is undermining the system. You have to ask the question of what's in your "Highest Interest" - your quest for short term profits and advantage just might undermine your long term survival.

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Well, A few years ago I raised an issue about the increasing number of fuel failures in our USA nuclear plants. I worried about the resources needed to compensate for this --anti rad resources. I couldn't understand why this was happening also. So the NRC commissioners came out in a statement saying that there was a very troubling trend with increasing fuel failures; there just was not enough resources spent in understanding and correcting the problems by the fuel pin manufactures and the plant owners --the commissioners term it as "the kids aren't doing their homework". They also said the utilities and manufacturer were under too much financial pressure, such they were taking shortcuts in the analysis and didn't have enough prospective on the future -considering the pins would be under a heavier duty.

So the question is -does the utilities have too much leverage in setting fuel prices -such that it leads to a long term lack of financial investment in the centrifuging and manufacturing processes? That's what we'd seen through these fuel failure problems. So is USEC not being given enough financial resources, such that the corporation could become a healthy business. Is it the importation of cheap foreign subsidized fuel?

Are the utilities cutting off their extremities and eating them -in order to survive and CEO bonuses ---or better yet, is the bottom line of the (utilities stock prices and executive compensation structure) causing a destructive process for the downstream businesses such as USEC?

thanks,
mike
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Growing uranium demand triggers a shift in miningBy Alex Fak Published: December 23 2004 02:00 Last updated: December 23 2004 02:00
When Swiss-based Xstrata made a A$7.4m bid for WMC in October, the Melbourne mining group was far from happy.
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The Australians said the offer grossly undervalued Olympic Dam, a copper and uranium mine in the South Australia outback. "With spot prices for yellowcake oxide - the main uranium grade - having risen 49 per cent in the year to November in nominal dollar terms, and global production satisfying just 58 per cent of demand from nuclear reactors, WMC wants a better offer."
WMC says it will invest some A$4bn in Olympic Dam in a move that would triple its output of yellowcake. But Xstrata says it is only interested in the copper and gold potential of the mine.
The tussle between the two companies reflects the unusual nature and geography of uranium.
Yellowcake packs a lot of energy, which nuclear reactors release by splitting uranium atoms. It can also be stored cheaply.
During the 1970s and 1980s, the world's nuclear powers stocked up, storing the stuff in reactor warehouses and ever-proliferating nuclear weapons.
The collapse of the Soviet Union in the early 1990s and decommissioning of Soviet nuclear weapons flooded the market with enriched uranium. By 2000, prices were a quarter of their levels in the early 1980s. Many users stopped building up inventories and began buying the sludgy yellowcake on the spot market. Mines closed and investment in those that remained virtually seized up.
But with the world consuming more energy, inventories are slowly being depleted and mining is once again needed. Uranium, the heaviest naturally occurring element, is as abundant in the earth's crust as tin, but concentrated lodes are rare. Tapping new veins takes time, and so does expanding the market for uranium.
"Demand has been rising by maybe 1-2 per cent per year," says Steve Kidd, director of strategy and research at the London-based World Nuclear Association. Asian governments are planning some three dozen nuclear power plants.
But authorities take years to decide on a nuclear reactor and, when they do, building the plant takes even more time.
Producers seem in no hurry. "The mining companies are saying, 'We haven't invested for 10 or 20 years because the price was so weak; now the price is $20 a pound, but you have got to give us some sort of security'," says Mr Kidd.
This means longer-term contracts at higher prices. However, old agreements at weak prices have not yet expired.
According to The Sydney Morning Herald, WMC is committed to selling uranium to some clients for as little as $11 a pound for four more years. The current spot price is $20.50.
Geography has also conspired against production. Outside the former Soviet states - who tend to hold on to their uranium - Canada and Australia accounted for two-thirds of uranium production in 2003, according to Ux, the nuclear consultants. Environmental standards there are strict.
"Things have become a bit problematic in recent years almost entirely due to the environmental side," says John Meyer, an analyst at Numis Securities in London. "It can take five to 10 years to get a mine up and running as it is, and another five years to get environmental permission beforehand."
Besides spending on safety precautions, companies need to win over activists and hostile locals.
In a presentation in Sydney last week, WMC cited eight forecasts from uranium consulting firms, predicting that current prices will hold until 2010. But analysts note that the company did not exactly trumpet its vast reserves until Xstrata came along.