Uranium miners face new hurdles as Fukushima disaster worsens

A haul truck is seen carrying uranium ore out of Energy Resource Australia's Ranger uranium mine in Australia's Northern Territory in this handout photograph obtained September 2, 2008.

Credit: Reuters/Rio Tinto/David Hancock/Handout

By James Regan

SYDNEY | Wed Aug 21, 2013 4:14am EDT

SYDNEY (Reuters) - Revelations of more toxic leaks from Japan's Fukushima Daiichi nuclear power plant will raise second-thoughts about Japan's nuclear future, but won't halt the long-term global expansion of the industry, the head of a uranium mining company said.

"It reinvigorates the heightened state of nervousness, it surely will make the Japanese government and nuclear regulatory authorities more cautious and conservative in the decisions about the restart," said Vanessa Guthrie, managing director of Australia's Toro Energy Ltd (TOE.AX), which expects to start mining uranium in Australia in 2016.

Japan is set to raise the severity rating of the leak to level 3, or "serious incident", on an international scale for radiological releases, underlining a deepening sense of crisis at the site.

The price of uranium, used mainly as fuel for nuclear reactors, plunged after the March 2011 meltdown at the Fukushima plant 240 km (150 miles) from Tokyo and has struggled to recover ever since.

August uranium futures stood at $35.15 per pound on Wednesday compared with $68 per pound before the earthquake and tsunami that triggered the disaster.

However, Guthrie said contract prices between uranium miners and buyers standing at around $58-$59 a pound more accurately reflect the supply and demand balance than the spot price.

Operating costs in the industry range between $22-$25 per pound up to the high $40s, Guthrie said.

Canadian miner Uranium One Inc (UUU.TO), which Russian nuclear corporation Rosatom plans to consolidate and take private this year, expects uranium prices to almost double in a couple of years amid dwindling supplies.

Toro is scheduled to start shipping uranium from its Wiluna mine under development by mid-2016. This week it acquired a second uranium project in Australia from Canada's Mega Uranium Ltd (MGA.TO).

Guthrie said longer-term projections continue to point to an undersupply of uranium as more nuclear power plants are commissioned, despite the events unfolding in Japan.

"I don't believe that this will delay or defer ongoing developments of the nuclear industry," Guthrie said. "For example, it will certainly not cause the Chinese to stop building new plants."

China has 28 nuclear reactors under construction and 17 in operation, according to the World Nuclear Association.

Additional reactors are planned, the association says, resulting in a four-fold increase in nuclear capacity by 2020.

In a statement faxed to Reuters, China's Foreign Ministry said it "hopes that the Japanese side can earnestly take effective steps to put an end to the negative impact of the after-effects of the Fukushima nuclear accident."

In contrast, since the disaster in 2011, Germany, Switzerland and Belgium decided to move away from nuclear power altogether in favor of renewable energy.

The last of Japan's 54 nuclear reactors was shut down in May 2012. Two reactors were restarted in June 2012, and Japan's governing Liberal Democratic Party wants all reactors reactivated if confirmed safe.

Still, some 50 countries continue to run and build reactors.

Guthrie expects supplies of uranium to tighten once 24 million pounds of secondary uranium is removed under the U.S.- Russian Megatons to Megawatts Program, which ends this year.

The program is a bilateral nonproliferation agreement to convert high-enriched uranium taken from dismantled Russian nuclear weapons into low-enriched-uranium for nuclear fuel.

(Reporting by James Regan; Editing by Richard Pullin)

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Emerging market sell-off worsens, more pain ahead

An employee poses with the bundles of Indian rupee notes inside a bank in Agartala, the capital of India's northeastern state of Tripura August 22, 2013.

Credit: Reuters/Jayanta Dey

By Sujata Rao

LONDON | Thu Aug 22, 2013 7:33am EDT

LONDON (Reuters) - Heavy selling engulfed emerging markets again on Thursday with more currencies falling prey to fears of higher global borrowing costs and a reduction in cheap cash supplies from the United States.

While the Indian rupee and Turkish lira skidded to new record lows against the dollar and the Indonesian rupiah slumped to fresh four-year lows, currencies such as the Mexican peso and the Korean won that have so far been spared the worst of the recent selloff, are also now feeling the heat.

Market expectations that the U.S. Federal Reserve will start cutting back its $85 billion-a-month money printing program from September were maintained after minutes from the U.S. central bank's July meeting gave little new guidance on timing. That drove a fresh spike in U.S. 10-year yields, the risk-free rate against which all assets, including emerging markets, are benchmarked.

"U.S. yields will go higher - that is obvious - and no one wants to be exposed to assets in emerging markets which are very sensitive to U.S. monetary policy," said Maarten-Jan Bakkum, investment strategist for ING Investment Management's emerging market funds.

As U.S. Treasury yields hit new two-year highs - they stand around 120 basis points higher than early-May levels - more and more investors dumped emerging assets.

Emerging equities fell for the fifth straight session to bring 2013 losses to 13 percent .MSCIEF. Bonds in emerging currencies also sold off with average yields at almost 7 percent on the main GBI-EM index - the highest in more than two years.

Currency weakening accelerated, forcing central banks to step up their efforts to stem it.

Turkey pledged to increase dollar sales to sell $350 million on Thursday after the lira hit a record low for the second day in a row but analysts called for more steps. Turkish stocks shed over 2 percent .XU100 while bond yields rose.

"We expect further interest rate hikes or even an emergency monetary policy meeting," said Ali Cakiroglu, a strategist at HSBC in Istanbul.

Earlier, the Indian rupee fell another 1.5 percent to plumb a new low past 65 per dollar, bringing losses since the start of this week to around 5 percent.

Indonesia too suffered fresh losses and capital outflows, triggering a warning from Fitch that weak policy management could affect credit ratings for it and for India

Brazil will offer $4 billion on the spot market on Thursday, boosting its efforts to curb the real's losses. The currency has tumbled to near five-year lows despite some $30 billion in central bank interventions via the swap markets.

The rand slumped to a new four-year low

MORE EMERGING MARKETS HIT

ING's Bakkum said bearishness had now extended beyond India, South Africa, Turkey, Indonesia and Brazil - markets that were hit first because of their reliance on foreign capital.

"The five that were in focus so far are obvious victims as they need external capital to fund themselves but there are also worries about economic growth," he said.

"Countries such as Thailand and Mexico that had strong capital inflows and credit growth are also looking vulnerable as their growth expectations were based on assumptions of strong capital flows."

Data from Malaysia confirmed the worsening fundamentals of emerging markets, showing an economic slowdown and an evaporating current account surplus. That pushed the ringgit to three-year lows.

The Thai baht too fell to three-year lows, forcing the central bank to reassure markets it would act if needed, while the Korean won fell to two-week lows.

Selling has also hit the Mexican peso which lost 2 percent on Wednesday while Russia's rouble sank to almost a four-year low versus a euro-dollar basket and data showed central bank dollar sales of $3.7 billion in August.

Analysts are reluctant to call the end of the selloff. Of the trillions of dollars that flooded into emerging markets over the past decade, they note that very little has actually exited, indicating scope for more huge outflows.

Data from Lipper, a Thomson Reuters company, shows that in the three months to end-July, global emerging equity funds it tracks saw net outflows of about $8 billion. That equates to just under 2 percent of total assets under management.

Funds dedicated to emerging dollar debt have shed a net $1 billion this year compared to $124 billion in assets, it says.

"In the medium and long term we are positive about emerging markets. Flows into the asset class reflect a structural rather than cyclical change in global asset allocation," said Thanasis Petronikolos, head of emerging debt at Baring Asset Management.

"But in the short term there will be more fluctuations."

(For GRAPHIC on MSCI emerging index performance 2013, see link.reuters.com/weh36s

(Additional reporting by Joel Dimmock in London; editing by Stephen Nisbet)

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Uranium miners face new hurdles as Fukushima disaster worsens

A haul truck is seen carrying uranium ore out of Energy Resource Australia's Ranger uranium mine in Australia's Northern Territory in this handout photograph obtained September 2, 2008.

Credit: Reuters/Rio Tinto/David Hancock/Handout

By James Regan

SYDNEY | Wed Aug 21, 2013 4:14am EDT

SYDNEY (Reuters) - Revelations of more toxic leaks from Japan's Fukushima Daiichi nuclear power plant will raise second-thoughts about Japan's nuclear future, but won't halt the long-term global expansion of the industry, the head of a uranium mining company said.

"It reinvigorates the heightened state of nervousness, it surely will make the Japanese government and nuclear regulatory authorities more cautious and conservative in the decisions about the restart," said Vanessa Guthrie, managing director of Australia's Toro Energy Ltd (TOE.AX), which expects to start mining uranium in Australia in 2016.

Japan is set to raise the severity rating of the leak to level 3, or "serious incident", on an international scale for radiological releases, underlining a deepening sense of crisis at the site.

The price of uranium, used mainly as fuel for nuclear reactors, plunged after the March 2011 meltdown at the Fukushima plant 240 km (150 miles) from Tokyo and has struggled to recover ever since.

August uranium futures stood at $35.15 per pound on Wednesday compared with $68 per pound before the earthquake and tsunami that triggered the disaster.

However, Guthrie said contract prices between uranium miners and buyers standing at around $58-$59 a pound more accurately reflect the supply and demand balance than the spot price.

Operating costs in the industry range between $22-$25 per pound up to the high $40s, Guthrie said.

Canadian miner Uranium One Inc (UUU.TO), which Russian nuclear corporation Rosatom plans to consolidate and take private this year, expects uranium prices to almost double in a couple of years amid dwindling supplies.

Toro is scheduled to start shipping uranium from its Wiluna mine under development by mid-2016. This week it acquired a second uranium project in Australia from Canada's Mega Uranium Ltd (MGA.TO).

Guthrie said longer-term projections continue to point to an undersupply of uranium as more nuclear power plants are commissioned, despite the events unfolding in Japan.

"I don't believe that this will delay or defer ongoing developments of the nuclear industry," Guthrie said. "For example, it will certainly not cause the Chinese to stop building new plants."

China has 28 nuclear reactors under construction and 17 in operation, according to the World Nuclear Association.

Additional reactors are planned, the association says, resulting in a four-fold increase in nuclear capacity by 2020.

In a statement faxed to Reuters, China's Foreign Ministry said it "hopes that the Japanese side can earnestly take effective steps to put an end to the negative impact of the after-effects of the Fukushima nuclear accident."

In contrast, since the disaster in 2011, Germany, Switzerland and Belgium decided to move away from nuclear power altogether in favor of renewable energy.

The last of Japan's 54 nuclear reactors was shut down in May 2012. Two reactors were restarted in June 2012, and Japan's governing Liberal Democratic Party wants all reactors reactivated if confirmed safe.

Still, some 50 countries continue to run and build reactors.

Guthrie expects supplies of uranium to tighten once 24 million pounds of secondary uranium is removed under the U.S.- Russian Megatons to Megawatts Program, which ends this year.

The program is a bilateral nonproliferation agreement to convert high-enriched uranium taken from dismantled Russian nuclear weapons into low-enriched-uranium for nuclear fuel.

(Reporting by James Regan; Editing by Richard Pullin)

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This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Uranium miners face new hurdles as Fukushima disaster worsens

A haul truck is seen carrying uranium ore out of Energy Resource Australia's Ranger uranium mine in Australia's Northern Territory in this handout photograph obtained September 2, 2008.

Credit: Reuters/Rio Tinto/David Hancock/Handout

By James Regan

SYDNEY | Wed Aug 21, 2013 4:14am EDT

SYDNEY (Reuters) - Revelations of more toxic leaks from Japan's Fukushima Daiichi nuclear power plant will raise second-thoughts about Japan's nuclear future, but won't halt the long-term global expansion of the industry, the head of a uranium mining company said.

"It reinvigorates the heightened state of nervousness, it surely will make the Japanese government and nuclear regulatory authorities more cautious and conservative in the decisions about the restart," said Vanessa Guthrie, managing director of Australia's Toro Energy Ltd (TOE.AX), which expects to start mining uranium in Australia in 2016.

Japan is set to raise the severity rating of the leak to level 3, or "serious incident", on an international scale for radiological releases, underlining a deepening sense of crisis at the site.

The price of uranium, used mainly as fuel for nuclear reactors, plunged after the March 2011 meltdown at the Fukushima plant 240 km (150 miles) from Tokyo and has struggled to recover ever since.

August uranium futures stood at $35.15 per pound on Wednesday compared with $68 per pound before the earthquake and tsunami that triggered the disaster.

However, Guthrie said contract prices between uranium miners and buyers standing at around $58-$59 a pound more accurately reflect the supply and demand balance than the spot price.

Operating costs in the industry range between $22-$25 per pound up to the high $40s, Guthrie said.

Canadian miner Uranium One Inc (UUU.TO), which Russian nuclear corporation Rosatom plans to consolidate and take private this year, expects uranium prices to almost double in a couple of years amid dwindling supplies.

Toro is scheduled to start shipping uranium from its Wiluna mine under development by mid-2016. This week it acquired a second uranium project in Australia from Canada's Mega Uranium Ltd (MGA.TO).

Guthrie said longer-term projections continue to point to an undersupply of uranium as more nuclear power plants are commissioned, despite the events unfolding in Japan.

"I don't believe that this will delay or defer ongoing developments of the nuclear industry," Guthrie said. "For example, it will certainly not cause the Chinese to stop building new plants."

China has 28 nuclear reactors under construction and 17 in operation, according to the World Nuclear Association.

Additional reactors are planned, the association says, resulting in a four-fold increase in nuclear capacity by 2020.

In a statement faxed to Reuters, China's Foreign Ministry said it "hopes that the Japanese side can earnestly take effective steps to put an end to the negative impact of the after-effects of the Fukushima nuclear accident."

In contrast, since the disaster in 2011, Germany, Switzerland and Belgium decided to move away from nuclear power altogether in favor of renewable energy.

The last of Japan's 54 nuclear reactors was shut down in May 2012. Two reactors were restarted in June 2012, and Japan's governing Liberal Democratic Party wants all reactors reactivated if confirmed safe.

Still, some 50 countries continue to run and build reactors.

Guthrie expects supplies of uranium to tighten once 24 million pounds of secondary uranium is removed under the U.S.- Russian Megatons to Megawatts Program, which ends this year.

The program is a bilateral nonproliferation agreement to convert high-enriched uranium taken from dismantled Russian nuclear weapons into low-enriched-uranium for nuclear fuel.

(Reporting by James Regan; Editing by Richard Pullin)

View the original article here

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