Australian uranium miners are positive that the reactors in Japan will be back on shortly under the LDP administration, as they are certain that US$100 million a day spent on extra coal, oil and gas is simply unsustainable for Japan. Australia is here to help, they say.
Sydney Morning Herald reports the shares of Paladin soared more than 8% on Monday following the Japanese election results:
(The announcer looks pretty, but her Australian English is scary.)
Also from the paper's article (12/18/2012; emphasis is mine):
Producers bullish on Japanese demand
by Paddy Manning
GLOBAL uranium demand is set to rebound as Japan's nuclear reactors are gradually switched back on by the new Liberal Democratic Party government, elected over the weekend.
Greg Hall, managing director of junior Toro Energy, said Japan had been spending an additional $US100 million a day on extra coal, oil and gas, which represented a ''very, very high cost''.
After the weekend's election, he said the country now had the political will to restart its reactors. A new independent safety authority would be in place by April and Japan's nuclear power capacity would be restored through 2013-15.
Shares in uranium producers Paladin Energy and Rio Tinto's Energy Resources Australia surged on Monday - by 8 per cent and 5 per cent respectively - and the spot price of uranium oxide neared $US44 a pound.
Paladin Energy chief John Borshoff predicted Germany, too, would eventually return to the nuclear power fold. ''Germany can't survive on a no-nuclear basis with all the countries around it pouring electricity into the country. How could Japan survive as an island country?''
Mr Borshoff said it was impossible for Japan to do without 27 per cent of its electricity-generating capacity. ''We've been working on the basis the nuclear programs will resume in some modified form. Germany have set an irreversible path but I believe in eight-10 years they'll be back on the drawing board.''
UBS resources analyst Glyn Lawcock welcomed the Japanese news saying it had been a ''torrid'' 18 months for uranium markets since the closure of the Fukushima Daiichi reactor after last year's Japanese earthquake and tsunami.
Japan shut its fleet of 54 reactors in the wake of the partial meltdown, causing power shortages and a rise in energy prices as coal, oil and gas made up the shortfall.
Spot uranium prices fell from their pre-Fukushima level of about $US65/lb to a low of $US40.80 in November and have recovered somewhat since.
Mr Lawcock said until recently investors had been concerned that Japan, which had deferred some deliveries of uranium as stockpiles rose, would turn around and become a net seller into the world market. Paladin was better placed than ERA to benefit, he said, because three-quarters of its output would be sold at prices linked to a rising spot market.
UBS commodities analyst Tom Price said the Fukushima Daiichi reactor was one of Japan's oldest and slated for closure within two years. ''Fukushima was a genuine tragedy but nuclear is a genuine alternative for baseload power stations to coal, and relatively cheap, once built,'' he said.
The indefinite deferral of BHP Billiton's Olympic Dam expansion, and the re-election of the LDP in Japan, were ''two bull points'' for the uranium price and UBS was forecasting a recovery to $US50/lb in 2013, and $US55/lb in 2014 and a long-term price of $US65/lb, he said.
Toro Energy is expecting a decision this week from federal Environment Minister Tony Burke on its 100 per cent-owned Wiluna uranium mine in Western Australia. Toro shares were unchanged on Monday at 11.5¢.
"Mr Borshoff said it was impossible for Japan to do without 27 per cent of its electricity-generating capacity" ??
Mr. Borshoff clearly isn't aware (or chooses not to be aware) that Japan has been doing without the so-called 27% of electricity-generating capacity ever since March 11, 2011, and all it has suffered was a manufactured threat of rolling blackouts thanks to then-Chief Cabinet Secretary Yukio Edano and NISA's Nishimura.
"UBS commodities analyst Tom Price...'Fukushima was a genuine tragedy but nuclear is a genuine alternative for baseload power stations to coal, and relatively cheap, once built'"??
Nuclear power plants needs electricity from other power plants to operate, not at all suitable for baseload power stations. And for him to say nuclear is cheap once the plant is built, I suppose he is assuming an accident will never happen.
Mr. Greg Hall, managing director of junior Toro Energy talks about the "political will to restart the reactors".
LDP won two-thirds of the seats by getting votes of only 25% of eligible voters (or 42% of votes actually cast). It's hardly a mandate, but yes political will will be there, which has hardly anything to do with what the majority of the citizens want.
Mr. Hall says one thing that greatly distresses me: new independent safety authority will be in place by April. Hmmm. Either he doesn't know about the Nuclear Regulatory Authority that exists already, or the current Nuclear Regulatory Authority will be ditched, as I've been fearing all along.