Prices hit $136 in 2007 and then began a long pullback to around $40. They bottomed in April and have since rebounded to where they are right now – at the $50 per pound level.

Can they go up from here? Take another look at the chart. You can see that the highs are still getting lower, and the lows are also dropping. In other words, the downward trend is still intact.

Based on market fundamentals, the price of uranium should be going up soon. Nuclear power contributes 16 percent of world energy demand. In the US, it contributes 20 percent. And with 30 nuclear plants under construction and another 38 in the pre-construction stages with dozens more planned, nuclear’s contribution is sure to rise.

And there won’t be enough uranium to go around. The Atomic Energy Agency recently said that Russia and the U.S.  may cover only five percent of world demand by 2015.

The current shortage in uranium production is covered by the uranium from dismantled weapons the U.S. gets from Russia. The government-created company, USEC, down-blends this uranium for use in nuclear power plants. But that agreement goes away in 2013.

But the global nuclear power plant construction program isn’t going anywhere. With China and India leading the way, nuclear’s resurrection shouldn’t be ignored by investors.

The entire nuclear industry is revving up, including uranium exploration and mining. It takes 8-12 years to build a mine and get the stuff out of the ground.

One of the bigger companies which has been mining uranium for a long time is Cameco (NYSE:CCJ). Its stock should grow right along with the sector itself.

Source: A Sure Way to Play Uranium

Cameco (NYSE:CCJ), the world’s largest uranium miner tabled a 38 per cent drop in first quarter earnings to $82 million, or $0.22 per share down from the $133 million or $0.37 per share tallied in the same period of 2008. The average uranium selling price came in at C$46.72 per pound. Cameco expects to sell between 32 to 34 million pounds of uranium in 2009. Cameco ended the day up C$1.75 at C$29.15.

Sticking to the uranium theme, Northern Continental Resources and Denison Mines (AMEX:DNN) are looking to wed. Denison is offering one of its shares for every 10.87 shares of Northern. Northern ended the day up C$0.07 at C$0.195, while Denison closed at C$2.38 for a C$0.14 gain.

The Canadian currency and the Canada Market are making a strong move to the upside with commodity prices leading the way. We shall see what Monday trading has in store.

Source: Resource Stock Roundup:Monday, May 04th, 2009

For the tale of the tape, the TSX Exchange climbed 1.49%, while the TSX Gold Index tacked on 4.4% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, added 1.91% with the advancers beating out the decliners by a 499 to 313 margin on volume of 152 million shares traded.

Centerra Gold reached an agreement with the government of the Kyrgyz Republic and Cameco (NYSE:CCJ) that resolves all of the existing disputes with respect to the Kumtor gold project. Centerra ended the week up C$1.03 at C$7.26.

Belvedere Resources remained halted for a second straight day. Shares in the nickel player were halted pending news at C$0.12.

The market continues to move higher in the face of weak economic data with the junior bourse breaking the crucial 1,000 point mark. We shall see what Monday trading has in store.

Source: Resource Stock Roundup: Monday, April 27th, 2009

It was a rough day for Teck Cominco (NYSE:TCK) after the world’s second-largest zinc producer posted a fourth quarter loss of C$607 million or C$1.28 per share compared to a profit of C$280 million or C$0.63 per share in the same period a year earlier. The debt-heavy miner took a C$844 million writedown in the quarter. Teck ended the session down C$0.48 at C$4.44.

Cameco (NYSE:CCJ), the world’s largest uranium miner posted a fourth quarter profit of C$31 million or C$0.08 per share, compared to a profit of C$61 million or C$0.17 per share in the fourth quarter of 2007. For the full year, Cameco’s profits jumped 8 per cent to C$450-million or C$1.28 a share. Shares in the company closed at C$18.17, for a C$1.03 loss.

Minera Andes solved its cash and regulatory problems with Robert McEwen electing to take down nearly 18.3 million shares at C$1 per share rather than the earlier 121 million shares at C$0.33. McEwen will also assume the Minera’s $17.5 million loan owing to Macquarie Bank. Minera ended the day up C$0.27 at C$0.75.

The only green seen these days is in the form of bullion. We will see what Wednesday trading has in store.

Source: Resource Stock Roundup: Wednesday, February 18th, 2009

Over the past few months, China has capitalized on the financial turmoil that has paralyzed the world’s “developed” economies by stocking up on cheap commodities, weeding out competition to its largest state-run companies, and acquiring even more foreign assets.

Indeed, with China’s economic growth projected at an enviable 8% for this year, that country’s government has been able to spend less time promoting immediate growth and liquidity, and more time preparing for the economic renaissance that almost certainly seems to be the Asian giant’s destiny.

By exposing Western free-market capitalism, undermining the United States economic clout, and eviscerating commodities prices, China is using the financial crisis as the perfect opportunity to advance its domestic agenda.

That agenda begins with the recently unveiled $586 billion stimulus plan – a plan primarily focused on infrastructure.

China’s financial institutions have little or no exposure to the toxic subprime assets that spawned this current global crisis. Thus, instead of having to spend hundreds of billions of dollars to bail out its banks, China can choose develop the stage on which it will display its future economic might.

And the first phase of that plan is key: Before its plans for a massive infrastructure overhaul can be realized, China must first load up on the raw materials crucial to its execution.

With Prices Down, China’s Stocking Up

Prices for commodities like aluminum, copper, iron ore and oil are all down substantially from last year as the global financial crisis has torpedoed demand. And now that prices have gone down, China’s commodities stockpiles are going up.

Imports of copper, iron ore, and oil all rose in December, as China took advantage of low commodities prices:

• Iron ore imports were up 6.2% in December, on a year-over-year basis.
• Copper imports were up 19.3%.
• And imports of crude oil climbed 11.6%.

“The authorities are thinking about the issue from a strategic point of view,” a senior researcher at China’s State Reserve Bureau (SRB) told Reuters. “As almost all raw material prices went sky-high in the last few years, China has not built up some of the key state reserves. Now is a much better time to stock up.”

The government announced last month that it would purchase of 290,000 metric tons of aluminum from eight of the nation’s largest smelters at about $1,806 a ton. And on Jan. 13, representatives from the SRB again met with domestic smelters, this time to discuss plans to build a stockpile of up to 300,000 tons of zinc – a metal used in galvanized steel.

A 300,000-ton zinc reserve could cost about $494 million (3.36 billion yuan), based on recent spot prices of $1,630-$1,640 a metric ton, as quoted on the Shanghai Nonferrous Metals Market.

Market participants speculate that the government is also mulling a 200,000-ton copper reserve, now that prices for that metal have tumbled more than 50% from a record $8,940 a metric ton last year.

“China will buy copper for its reserves,” SRB Executive Director and Vice President Wang Chiwei said at a conference in Shanghai.

Prices right now are “attractive,” Wang added, noting that purchases would “suit national interests.”

Chinese copper demand is expected to grow moderately in 2009, despite the global downturn.  Officials expect growth of just over 2% next year, but Barclays Capital (ADR: BCS) analyst Yingxi Yu told Forbes that demand growth could be closer to 3.5%.

The SRB may increase stockpiles of copper by as much as 74% in the next two years, Scotia Capital Inc. predicted in October.

China Digs for Bargains Down Under

Of course, China’s recent drive for raw materials is only half the story.

China is already home to the world’s largest population; now it is on the fast track to passing Japan as the world’s second-largest economy. Access to resources will continue to be a priority in Beijing for decades to come, even long after the $586 billion stimulus plan is forgotten.

That’s why China isn’t just using the global financial crisis as an opportunity to stock up on raw materials, it’s also loading up on foreign companies and assets while it is flush with foreign reserves. And while prices are cheap.

As they struggle with sluggish demand and falling commodities prices, many distressed foreign mining companies and materials suppliers have suddenly found themselves with a generous foreign backer.

In December, China’s third-largest zinc producer, Zhongjin, bought a 50.1% stake in Australian zinc miner Perilya Ltd. for $32 million.

Perilya has found “a strong and well-funded strategic partner committed to the long-term development of Perilya’s assets,” the Perth-based miner said in a statement. The deal included an initial cash deposit of $6.5 million.

Perilya’s deal followed that of Albidon Ltd., which started producing nickel in Zambia just as nickel prices crashed. Albidon raised $5 million from China’s Jinchuan Group, Asia’s largest nickel producer and a shareholder that now owns 18% of the West Perth-based Albidon. But more importantly, Jinchuan will take 100% of the nickel the Zambian mine produces over the rest of its life.

State-owned companies like Zhongjin and Jinchuan have access to China’s massive cache of foreign exchange reserves, which allows them to make acquisitions at a time when few other companies have the resources to facilitate a merger. And while China has focused much of its attention on undeveloped mining assets in Africa, the current financial crisis has opened the door to a wider range of takeover possibilities.

“The Chinese realize there are massive opportunities in the market,” Keith Spence, president of Global Mining Corp. (OTC: GBGD), told The Financial Times. “A year ago, they were going to Africa to acquire early-stage development assets. But now they are looking for larger tonnage, longer life, later-stage assets. There is less of an emphasis on emerging markets, because now there is choice.”

So far, Australia has been the country most often targeted by China for strategic investments.

Australia’s Centrex Metals Ltd., Mount Gibson Iron Ltd., Gindalbie Metals, and Grange Resources Ltd. have all struck deals with Chinese companies in the past year, The Australian reported.

• Centrex Metals sold a 50% interest in two magnetite deposits to Wuhan Iron & Steel Co. Ltd., China’s third-largest steelmaker for $180 million.
• Mount Gibson Iron brokered a rights issue and share placement to Chinese interests, with two major companies taking a stake of as much as 40% in the miner, while also securing discounted off-take agreements.
• Angang Steel Co. Ltd., also known as AnSteel, China’s second-largest steelmaker, paid $162.1 million to boost its stake in Gindalbie Metals from 12.6% to 36.28%.
• And Grange Resources is currently set to merge with Australian Bulk Minerals, which is majority-owned by a Chinese steelmaker.

Peter Vaughan, a partner at Blake Dawson, a Melbourne-based law firm, told The Australian that major Chinese steel mills kicked off a “wave of investment” in Australia from early 2000 – when China’s global economic clout began first started to build. Vaughan said this trend will continue deep into the current year as depressed asset valuations stack the deck in China’s favor.

“China is now in a much stronger bargaining position than they have been in the last few years,” Vaughan said. “Conditions have previously been in the producer’s favor, but demand drops and the tables turn. The Australian resources sector is now a lot cheaper to place an investment in.”

Denis Gately, head of the resources and energy industry group at Minter Ellison, one of the largest law firms in the Asia-Pacific region, agreed that Chinese enterprises are among the few that have the wherewithal to acquire prized foreign assets.

“They have recognized they are the only people in that position and will likely wait until prices fall further south,” Gately said. “The Chinese have an enormous amount of clout as the only potential buyers.”

In addition to building stakes in smaller miners, Chinese companies will be using that clout to build upon stakes in larger mining giants, which every bit as desperate for cash as their smaller counterparts.

Aluminum Corp. of China (ADR: ACH), or Chinalco, for instance has authorized a special team of analysts to watch for an opportunity to increase its stake in Rio Tinto PLC (ADR: RTP) to the maximum 14.99% allowed by the Australian government.

“We have a special team monitoring Rio Tinto’s performance and market movements in real time and will evaluate the best timing to do the stake increase,” Youqing Lu, the vice president of Chinalco, told dealReporter. Chinalco teamed with Alco last year to acquire a 12% stake in the mining company.

Chinalco is one of ten Chinese companies considering further overseas mergers and acquisitions, Xinhua, China’s official news agency reported.

“The crisis presents a rare opportunity for our domestic companies to initiate cooperation with foreign enterprises,” Xiao Yaqing, Chinalco general manager told Xinhua. “When the time is ripe, overseas acquisitions, strategic investments and joint development could all be considered.”

Canada to Profit From ‘China’s New Deal’

There is no question that, given its proximity to the Chinese mainland, Australia will continue to play a vital role in quenching China’s thirst for commodities. But on the other side of the globe, junior mining companies and exploration firms in Canada are hoping to attract prized Chinese investors.

In fact, the Canada China Business Council (CCBC), Canada’s most influential organization in terms of influencing Canada-China trade relations, recently released a report detailing ways Canadian businesses can profit from China’s recent infrastructure initiatives.

The report, entitled “China’s New Deal: Will Canada Benefit From China’s RMB 14 Trillion Stimulus Package,” was released earlier this month. The study details China’s stimulus-spending plan, and outlines areas in which Canadian companies can support Chinese development by providing resources and technology.

“As one of the world’s leading resource exporters, Canada will definitely benefit indirectly from the Chinese stimulus plan,” the Jan. 9 report said. “As well as energy, other resources such as wood, steel, nickel, copper and aluminum will be in demand. There also will be collateral benefit for Canadian transportation companies and the ports authorities.”

It hasn’t taken Canadian companies long to heed the report’s message, or its wisdom.

Earlier this week, for instance, China’s Tongling Nonferrous Metals Group took a 13% stake in Canada Zinc Metals Corp.

Prior to that, China Mining Resources Group Ltd. announced that it would increase its stake in Canada’s Quadra Mining Ltd. from the current 4.02% to a maximum of 19.9%.

D’Arianne Resources Inc. (PINK: DARUF), a Canadian exploration company, could be next to announce a deal with Chinese partners, as it recently reported strong results from its Lac a Paul phosphorous-titanium property.

“As of today, the very encouraging results coming from this first serious exploration campaign on the Lac a Paul project combined with the interest showed by foreign companies during our visit in China, undeniably confirm the potential of our phosphorous project,” D’Arianne Resources said in a statement.

Finally, Canada has the largest-and highest-quality uranium reserves in the world, making it the ideal partner in China’s quest to develop clean reliable energy.

Delta Uranium Inc. (PINK: DLTUF), engaged in the acquisition, evaluation and exploration of uranium in Ontario and Newfoundland, could also be high on Beijing’s target list.

More than 40 developing countries have recently approached United Nations officials to express interest in starting nuclear power programs. And China alone is planning to build 30 new plants in the next 15 years – a venture that will consume an estimated $50 billion in capital. All told, the country may require as many as 200 plants by 2050.

As with Australia, depressed commodities prices have opened the door to investment in major mining corporations, as well as in juniors in the Canadian market. That means the Saskatoon-based Cameco Corp. (CCJ), the world’s largest uranium producer, could also be in line for a large capital infusion.

“If I’m China Inc., and I have $10 billion, would I buy 60% of Xstrata (PINK: XSRAF), or a lot of reserves out in the middle of nowhere?” Kalaa Mpinga, chief executive of Mwana Africa PLC, a London-listed junior, told The Financial Times. “If I had all these billions, I would do this: Buy 15% of Anglo-American PLC (ADR: AAUK) and get a seat on the board.”

Source: What Companies Are Profiting From China’s Commodities Crusade?

Cameco (NYSE:CCJ) is temporarily suspending uranium-processing at its Port Hope plant in Ontario because of a dispute over supplies of hydrofluoric acid used in the production of nuclear fuel. The world’s largest uranium producer closed down C$0.24 at C$21.41.

Stornoway Diamond and partner Shear Minerals recovered 54 diamonds from a 2.95 kilogram sample from the Kahuna Breccia and 176 diamonds from a 29.9 kilogram sample of the Killiq kimberlite both on the Churchill diamond project in Nunavut. Stornoway ended the day down C$0.005 at C$0.095, while Shear closed at C$0.09 for a C$0.025 gain.

In a unique move, High Desert Gold is offering to buy back up to 36 million of its common shares at a price of C$0.27. This is essentially all the cash in the company’s till. High Desert closed up C$0.05 at C$0.24.

It was yet another terrible month for equity investors but the last trading week of November brought back some hope that a Santa Clause rally is underway. We will see what Monday trading has in store.

Resource Stock Roundup: Monday, December 1st, 2008

Meanwhile, investors digested (NYSE:CCJ) Cameco’s third quarter profit of $142-million or $0.41 per share, which is 46% lower that the third quarter of 2007. Lower uranium prices are the reason for the shortfall. Cameco ended the session down C$1.25 at C$17.35.

Titan Uranium remained unchanged at C$0.155 despite announcing that it had inked a deal allowing Japan Oil, Gas and Metals National Corp. to earn a 50% interest in its Border Block project in Saskatchewan. The price tag is C$6 million in exploration spending.

Barrick Gold (NYSE:ABX) represented the sell-off in the gold sector with the global leader losing C$2.88 to close at C$25.60.

It looks like forced selling will drive both the big and small boards past their recent lows and into uncharted territory. We will see what Thursday trading has in store.

Source: Resource Stock Roundup: Thursday, November 13th, 2008

For the tale of the tape, the TSX Exchange added 1.58%, while the TSX Gold Index fell 4.2% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, rallied 0.56% with the declining issuers edging out the advancers by a 511 to 408 margin on volume of 143 million shares traded.

Cash rich SNS Silver and cash-poor Andover Ventures (AOX) have inked a deal to merge. Under the proposal, SNS shareholders will get half an Andover share for each SNS share held. SNS has also provided Andover with a C$2 million bridge loan. SNS closed flat at C$0.16, while Andover dropped C$0.03 to close at C$0.34.

ATW Venture (ATVWF) cut 13.37 grams gold per tonne over 15.6 metres at its Burnakura gold mine in Western Australia. The result was good enough for a C$0.06 gain as shares in the junior closed at C$0.44.

Sherwood Copper (SWK), which added C$0.70 to close at C$4.30, hit 9.6 metres grading 2.58% copper at the high-grade Minto copper-gold mine in the Yukon.

Not to be outdone, Osisko Mining (OSK) tabled a 258 metre intercept running 2.13 grams gold per tonne at the South Barnat target some 1.2 km from its Canadian Malartic project in Quebec. Osisko ended the session up C$0.41 at C$2.95

Shares of Cameco (CCJ) continued to slide closing down C$0.63 at C$23.44. The company reported that production at its Key Lake mine in Saskatchewan will come in lower than expected. Earlier the company reported a green light to restart operations at its Port Hope uranium hexafluoride conversion plant that was shut down in July 2007 for contaminated soil. On the downside, its supplier of hydrofluoric acid has terminated its contract leaving the company without the key ingredient needed to produce uranium hexafluoride.

Liquidity or the lack there of remains a major stalling point for the more speculative issues. Cash rich companies can sit back and wait things out but the cash poor explorers will be fighting for survival by looking to do deals. Meanwhile, the prospects moving the debts off the books of the financials by throwing all the bad ones into a U.S. government vehicle may have the markets jumping for joy but one has to wonder as to the scale and practicality. We will see what Friday trading has in store.

Source: Resource Stock Roundup Friday September 19, 2008

Every month, TFN’s Financial Roundtable gathers the market’s top financial editors to provide perspective on the dominant trends in the world markets. After July’s meeting of the minds with Money Morning’s Bill Patalon and Martin Hutchinson (Financial Roundtable: Top financial analyst predicts $225 oil and $9 gasoline in 2009), August’s event combines the insights of Investors’ Daily Edge’s gurus Rick Pendergraft and Andrew Gordon.

J. Christoph Amberger: Andrew, we have seen oil prices fall from $147 per barrel in July down to $110-111 in early August. We have seen gold plummet from $1,030 in March by as much as $230 per ounce. What do you make of this decline in commodities prices? Have we seen the end of the speculative bubble or is this just a retrenchment in a bull market?

Andrew Gordon: Things sure have changed quickly. It was just July 11 when oil made its high of over $147 per barrel and commodities across the board were hitting highs and Western countries were asking OPEC to increase oil production. As a matter of fact, they did. They increased it by 150,000 barrels a day in July.

But by the time that happened, the market really reversed and oil demand went down. Gas demand went down. A little bump up in oil supplies really pushed down the price of crude. It’s gone down over 20 percent.

I don’t think we’re seeing the end of the secular bull, the commodity bull market and the oil bull market. But certainly the price of oil became so expensive in the U.S. and other countries that it really dampened demand. Demand in the U.S. was about two to three percent less than last summer at this time.

But even in China, crude imports were down by about six or seven percent. It didn’t help that Asian countries have been removing some of the subsidies. So, yes, we’re seeing the reversal of just what was going on about a month ago. But prices are now so low that investors are starting to ask themselves, are we risking demand going up and never having a chance to really establish consumption patterns that save on oil and gas and that begin to use alternative fuel?

In the short term I think these prices are going to go down a little more. But long-term, global growth is still not dead. In many countries it’s still a big factor and the basic fact about global growth and about oil supply is oil supply has not been able to keep pace with global growth. That basic fact is not going to change going into the future and it’s going to put upward pressure on the price of crude.

J. Christoph Amberger: Rick, how do you look at this situation?

Rick Pendergraft: Almost the exact opposite of Andy. On a short term basis, I see oil bouncing right now. You’ve got a lot of support in the $110 range. The 200-day moving average is there. That was a high in March; a low in May. Former support becomes resistance and former resistance becomes support. So I see the 110 level being very hard to get through for oil right now on the short term basis.

Ironically, back in about March I wrote a special report on oil that I thought that long-term, we would see a drop in the price of oil because this global demand is shifting to the left. So the demand is going to pull back a little bit and we’re seeing it more so in this country than any others.

But ironically we had China go offline with some factories. They limited the number of cars on the road for the Olympics to try and cut down on the pollution. The Olympics ended this weekend. It’s going to be interesting to see whether or not when that comes back online when the demand starts rising again over the short term, I do think you’ll see oil bounce back up.

I don’t think we hit $147 again — that is probably the high for the next few years. I just think that the demand globally will shift to the left a bit and we’ll see a little bit of decline in the demand there. That would keep that 147 as a price high for quite some time.

J. Christoph Amberger: OPEC’s president was saying that $70 per barrel would in his opinion be a fair price for oil. Of course, OPEC seems to be as variable with their oil price projections as anyone. What do you make of the down side for oil?

Andrew Gordon: Well, it’s funny. OPEC bases that price a lot on the dollar going down. They said to take away the exchange rate and the price of oil would cost around $70 these days and that’s a fair price. There’s nothing wrong with that so we don’t need to increase production.

People are already talking about the price of crude in the double digits. It hasn’t gone through $110 yet – never mind $100 – and people are already assuming that it’s going to go below $100.

I think it’s going to have difficulty going under $110 even. It may. One hundred – I’m not sure if OPEC will allow it. They don’t have veto power over the price of oil, but they have that bully pulpit and they can certainly jawbone the price of oil up from the $100 level by threatening to reduce oil production or at least slow down development of fields.

I think actually at $90, at $80, you still have the price of alternative fuels, the oil sands, solar power, nuclear power. You will still see the development of alternative energy, but I think $70 is really the threshold. Below $70 it’s really going to impact on the development of alternative fuels. I wouldn’t want to see it fall below that.

It figures. Last week I argued in IDE’s Unplugged that Americans have been slow in making fundamental changes in their energy consumption habits. “In other words,” I said, “high oil prices haven’t really changed the way we live. We haven’t turned into Europeans – riding our bikes to work and/or squeezing ourselves into little Smart cars.”

GM is making me look like a liar. According to news reports last Thursday, GM is thinking about introducing the Chevrolet Beat to the U.S. market. The car had originally been planned to be sold in the Asia and Latin America markets only.  

It’s not quite as tidy as Daimler’s (DAI) Smart car, but it’s close. It’s about 138 inches long. The Smart car is 32 inches shorter. The Beat gets 40 mpg. The Smart car gets 36.

Will the Beat catch on? If gasoline prices keep rising, it will. It always comes down to price, doesn’t it?

High gas prices are making an impact. They’re doing exactly what they’re supposed to do. They’re changing the way we use energy – slowly, but maybe not quite as slowly as I’ve been thinking.

That’s the way the market is supposed to work. And yet the government still feels compelled to act. Of course, it’s an election year and the political parties would rather be seen as part of the solution – God bless them – than part of the problem.

Should they listen to the oil companies? They want rights to open up drilling off our continental shelf and in Alaska. More oil production from the U.S. means less oil dependency on others. How is that a bad thing, they ask.

Should they listen to the Fed? They think oil prices will drop in a slowing economy. It did in past recessions. Could we be looking at the tipping point of energy prices? Does it make sense for consumers to pile into Beat and other small cars with no effect on gas prices?

Should they look to the past? When we were whammed with soaring oil prices in the 1970’s, oil conservation and development of alternative energies was the policy of choice inside the Washington beltway.

By the way, it didn’t work. A sparkling new and naive Department of Energy tried to subsidize alternative energy development. But the program wasn’t ambitious enough nor did it have enough funding behind it. My take? The technologies were too rudimentary at the time to make a difference (especially when you compare them to todays).

But the other energy policy of the 1970s was working just fine. I’m talking about nuclear energy. Until the Three-Mile Island incident in 1979, nuclear power was the future. And it still can be (if one of our presidential candidates is elected).

But in any Republican (or Democratic) scenario, nuclear energy will have to share the energy stage.

Unlike the 1970’s, we now have pretty good alt-energy technology. We have the price incentives (high oil and gas). And people are generally more environmentally sensitive than 30 years ago.  

So perhaps the government should listen to the conventional view that the West can and should lead the world in adopting new energy-efficient consumption patterns. If it started here, the thinking goes, it would quickly travel east and south. And it would be instrumental in bringing oil prices down.

Of all the “conventional wisdom” scenarios, the above is the most seductive. And the most wrong-headed. Yes, most technology will come from the West. (But not all: Witness all those solar start-ups in China, for example.)

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I suspect developing countries will give the tree-hugging consumers of the West a run for their money as early adapters.

1. Developing countries can much less afford high-priced oil than the West.

2. Infrastructure, unlike in the West, has the opportunity to develop with energy-use concerns in the forefront. Commercial buildings, houses, and transportation infrastructure will be more energy-efficient from the get-go. For example, neighborhoods will be built closer to factory estates. There will be much less of the great suburban sprawl we have in the U.S.

3. You can’t miss what you never had. We have to relearn our energy habits. Some things – like leaving the porch light on at night – we’ll never stop doing. Developing countries start out with a cleaner slate. It won’t even feel like “adapting” to them.

4. The “alt-energy” they’re already gearing up to use extensively? Nuclear power. Solar, wind, thermal, wave power will all grow by leaps and bounds. But none of them comes close to the scale-up power of nuclear.

Nuclear energy is the future again.

And the best news? Junior uranium explorers haven’t been this cheap for a long time. Cameco (CCJ) is one of the larger uranium producers in the world and it’s traded on the New York Stock Exchange. It’s a fairly safe way to play this trend.

The juniors have higher risk and higher upside. My esteemed colleague, Rusty McDougal, though, has a couple in his portfolio where the upside dwarfs the risk. If I were investing for 2009 and beyond, they’d be some of the first companies I would look at.

Invest well,
Andrew Gordon

P.S.  To let me know what you thought of today’s article, send an e-mail to: feedback@investorsdailyedge.com.

[Ed. Note: With a bear market looming, it’s more important than ever to select safe investments that produce monthly dividend income. Click here to learn about Andy Gordon's INCOME service that selects the best dividend-paying stocks available.]

Source: And the Beat Goes On