the future uranium market china’s dramatic growth
DESCRIPTION
The Future Uranium Market China’s Dramatic Growth. by MZConsulting Inc Milton Caplan, President, Dr. Terry Thompson, Senior Advisor Presented at Research Capital Uranium Conference 2009 April. Outline. Global Nuclear Growth Demand for uranium China growth and demand - PowerPoint PPT PresentationTRANSCRIPT
The Future Uranium MarketChina’s Dramatic Growth
by MZConsulting Inc
Milton Caplan, President, Dr. Terry Thompson, Senior Advisor
Presented at Research Capital Uranium Conference2009 April
2
Outline
• Global Nuclear Growth
• Demand for uranium
• China growth and demand
• Chinese strategies for supply
• Investment in Resource
• Summary
3
Nuclear Power
• Nuclear renaissance takes hold• France starts construction on Flamanville amd
commits Penly• UK Government confirms support for nuclear new
build and British Energy to be sold to EDF• Contracts signed in the USA• Ontario Canada bidding process for new units• New orders in China• 34 units under construction, 108 planned and 272
proposed• China and India
– 3% of plants in operation– One third of plants planned and proposed
Source: WNA 09/04/01
4
Uranium Energy
• Highly energy intensive source of energy
Uranium Pellet
Coal
7 grams (.24 oz) 1,780 lbs
(or 17,000 cu ft of gas)
=
5
Uranium Market is Unique
• Need a nuclear power plant to realize this energy
6
Uranium – without Nuclear Power
It’s nothing but a rock!!
Demand for Uranium is a direct function of the number of nuclear plants in operation and their performance
Important Characteristics
• Nuclear fuel costs represent only about 15% of the cost of energy from a nuclear plant
• Uranium is about one third of the fuel cost
• Low volumes
7
Suitable to develop strategic inventories to ensure security of supply!
8
Uranium Supply and DemandtU
Source: WNA Market Report
“The global nuclear fuel market: supply and demand 2007-2030”
9
Production• More than half of supply comes from Canada, Australia
and Kazakhstan
• 7 companies control about 80% of the global production
• UDP Report – Canada will lose its leadership role in 2009
2007 TU 2008 TU
Australia 8,611 8,430
Canada 9,476 8,980
Kazakhstan 6,637 8,521
Africa 6,571
Other 9,984
Total 41,279
China Electricity Capacity
10
GW
Growth RateChina 4.7 %World 2.4%
14%
25%
Source: WEO 2008
China Nuclear Plans
• Current capacity – 11 units, 9 GW• Plan to 2020 – 40 GW
– Target 2% of capacity, 4% of energy• New units
– CPR 1000 (based on Daya Bay design)– Qinshan Phase 2 repeat– Westinghouse AP1000– Areva EPR
• New policy under discussion– Want to increase target to 75 GW by 2020
11
Nuclear Power in China
Demand for Uranium
• Base requirement to 2020– 8,000 tonnes per year– Equivalent to 20% of current production!
• Increased target– 15,000 tonnes per year– Almost 40% of current production!!
• Considering India as well– Target 20 GW – 4,000 tonnes per year
13
Global distribution of uranium resources
Where will it come from?
• Strategy has three major components– Domestic production– Foreign purchase– Investment in foreign resource
• Development of a strategic inventory
15
What has been achieved?
• Domestic production in place– 840 tonnes / year– Exploration underway
• Part of reactor supply (Areva)– 26 years fuel supply for new EPRs– Provided 35% of Uramin property in Namibia
• Agreement with Kazatomprom• Sino Uranium has projects in Africa• CNNC purchase of Western Prospector
16
17
Investment in Resource
• China needs new ‘Elephants’• Canadian Policy concerns China
– NCA issues for sale of uranium– 49% ownership policy for operating mines
• No interest in USA • Prefer countries near to China
– Kazakhstan, Mongolia, Australia, Africa
China will become a player in Uranium Investment
How will Canada respond?
18
MZConsulting
• Extensive knowledge and experience in the Canadian and international nuclear industry
• Continuously monitors uranium companies with emphasis on those believed most likely to succeed (meaning potential for production)
• Extensive analytical capability• Provide advice and support to clients looking for
uranium investments
Work with Asian clients to access uranium supply options
19
Summary
• Uranium is a single use mineral• Significant growth in nuclear power• Most of the growth will be in Asia• Large Asian users have little resource• China will:
– Develop a strategic inventory– Invest in resource
• Decisions are affected by politics
The uranium market will fundamentally change as the large users move from the west to Asia!
