Cameco consolidates Millennium uranium project

Canadian uranium giant Cameco Corp. is acquiring control of the Millennium project in Saskatchewan by buying out combined venture partner Areva SA for $150-million.The all-cash deal for Areva’s 27.94% stake in Millennium boosts Cameco’s in general interest to 69.9%. The third partner on the project is JCU (Canada) Exploration Ltd., which has to refuse its right of refusal for the deal to proceed.

“This agreement gives Cameco majority ownership of Millennium and additional strengthens our base of uranium assets in the Athabasca Basin consistent with our growth strategy,” Cameco chief executive Tim Gitzel said in a statement.Millennium is a talented exploration project at which the companies have recognized 50.9 million pounds of indicated uranium resources, and another 16.7 million pounds of inferred resources.

The sale comes less than three months behind Areva, the French nuclear giant, and announced plans to sell more than €1.2-billion of assets. There were rumours that at least a few of its Canadian assets could be on the block. The company is in the midst of a big renovation as it adapts to the post-Fukushima nuclear sector, and just took a €1.46-billion write down on its 2007 acquisition of Canadian miner UraMin Inc.

Chinese require Rides to Uranium's Rescue

China's voracious appetite for development has been the savior of many commodity markets over the last few years, and currently it's coming to the rescue of another mineral: uranium. While much of the world questions the upcoming of nuclear energy following Japan's earthquake and tsunami, China is pushing ahead with plans to enlarge its nuclear generating capacity to a level that will make it the world's fourth biggest consumer of uranium this year behind the U.S., Japan and France. China's dramatic pace of nuclear-plant creation is set to more than make up for the postquake drop in Japanese uranium demand and will easily soak up any surplus production from new mines coming on stream.

The price of uranium, the ore used to fuel nuclear power plants, had been experiencing something of a renaissance since high oil and gas prices plus environmental concerns over pollution from traditional fossil fuels like coal sparked a revitalization of the nuclear sector. Before the earthquake crippled Japan's Fukushima Daiichi nuclear complex, spot uranium was deal at around $73 a pound, and analysts were organize to upgrade their price forecasts for this year and next. But the post Fukushima closure of more than a sector of Japan's nuclear reactors cut spot prices by 30% in a week to around $50 a pound, and questions over the future of the sector have been passionately debated ever since.

Not so in China. Warren Edney, senior mining forecaster at UBS, said China plans to increase its 13 operable reactors with an extra 110 by 2018, with 27 already under construction. Nuclear power presently makes up less than 2% of China's generation. The reactors require to be built to meet the country's 12th Five Year Plan's aim on emissions and power generation. The aim is to increase the percentage of electricity produced by nuclear power to 6% by 2020. There are 62 nuclear reactors in creation globally, of which only 3% are from Group of Seven countries. State-run projects like those in China maintain to be pushed through, whatever the backdrop, while privately run projects can fight from access to capital and can be swayed by negative public opinion and lobbying.