Two men inspect the dome of a nuclear power station
Powering Asia’s nuclear future
By Peter Guest | Published: 08 April, 2009
Demand from India and China for nuclear fuel and innovation in power plant design are contributing to renewed optimism in uranium mining. Peter Guest reports.
All the indications were that 2009 would be a bad year for everyone in mining apart from the canaries, but a combination of technological advances, Chinese efficiency and Indian demand has kept uranium miners on song.
In the latter part of this decade, the nuclear fuel story is very much an Asian one. Early indications are that the most important consumer of nuclear technology in the 21st century will be China Guangdong Nuclear Power Group (CGNPG).
This state-owned Chinese energy company has embarked on a massive project to construct 10 new power stations to feed the country’s industrial demand, which is still high, despite flagging slightly in the face of the global economic slowdown, and currently dependent on fossil fuel imports.
A chain of deals
In November 2007, French nuclear company Areva won the tender for the construction of its European pressurised reactor facilities, an 8bn ($10.3bn) deal unprecedented in scale and scope. As well as the technology, the contract included waste disposal facilities and, crucially, fuel supplies. CGNPG agreed to buy 35 percent of the production of UraMin, the Canadian uranium mining company that Areva paid $2.5bn for that same year. Just over a year later, Areva agreed to sell 49 percent of UraMin to CGNPG.
This created ripples beyond France and beyond China, and was why, in January of this year, Australian Mark Hohnen, executive chairman of Kalahari Minerals, was asked to go to Korea to talk to the national resource company, Kores. The Chinese deal was won, many analysts believe, on the issue of security of supply, over and above considerations of the quality of technology.
“The Koreans missed out [on the CGNPC deal], Mr Hohnen says. “And you know why they missed out? Because Areva could guarantee the supply. Areva sold [CGNPC] 49 percent of Trekkopje.”
Kores chief executive Kim Shin-jong said in January this year that the company would continue to look for uranium investments overseas in order to help strengthen Korea’s energy security.
Mr Hohnen went, instead, to London to share with investors the progress of his company’s uranium properties in Namibia. Kalahari Minerals is exposed to that country through its 40 percent shareholding in Extract Resources, which works mainly along the huge alaskite belt to the west of Windhoek, home to the Rossing mine that is 69 percent-owned by Rio Tinto and 15 percent by the Iranian government.
Extract Resources’ operation is just to the south of Rossing. To the west is the Goanikontes deposit, developed by Bannerman; to the northeast, the Valencia deposit, owned by Forsys Metals; and to the south and south east are Deep Yellow’s Tubas deposit and Paladin Resources’ Langer Heinrich project, respectively. Further north is UraMin’s Trekkopje deposit.
“This is now becoming one of the most serious uranium provinces in the world,” Mr Hohnen says. Uranium from Trekkopje will fulfil part of Areva’s deal with CGNPC. The acquisition cost for Areva is estimated at around $15/lb.
