Shares in leading German solar stocks rose substantially on expectations that other big players, including oil groups, are on the prowl in a market that grew to €6.6bn last year and is forecast to top €18bn by 2020.

Germany is by far the world’s biggest solar energy market thanks to its “feed-in” tariffs, which pay a government-guaranteed premium of up to €0.47 a kilowatt hour for power produced by photovoltaic panels. It is expected to continue to grow despite government plans to cut subsidies by 8% or 9% in 2009 and 2010.

“The richest investment opportunities can be found in the fast-emerging alternative energy sector,” says Mike Burnick in The Offshore A-Letter.

“That’s where oilman T. Boone Pickens is putting his money – his company Mesa Power just placed an order for US$2 billion in wind turbines. And there’s much more profit potential in other parts of the alternative energy sector too – especially alternative fuel.

“The market for ALL alternative energy sources grew 40% last year alone to US$77.3 billion and will explode into a US$250 billion industry within 10 years.

“Bio-fuel grew to a US$25.4 billion market last with more than 15 billion gallons of ethanol and biodiesel produced globally – more than double the output of just four years ago. The worldwide Bio-fuel industry will continue to enjoy explosive growth for years to come – expanding into a US$81 billion business within the next 10-years!”

According to Bloomberg, the project aims to extract about 8,000 metric tons of uranium octaoxide from the central province of Quang Nam.

“If coal is the short-term solution to the world’s energy needs, uranium is the long-term play,” says Jason Simpkins in Money Morning.

“In a recent research note, analysts with the RBC Capital Markets Group of the Royal Bank of Canada (RY) said that the current spot price of uranium has been ‘driven to excessively low levels due to intense selling pressure and lack of buying demand, coupled with the typical illiquidity of the spot market.’

“The RBC analysts also said that ‘the long-term price, on the other hand, has not changed since May 2007 and we think this better reflects the market’s view of longer-term supply-demand fundamentals.’

“If you want a pure play on an increase in the price of uranium itself, Cameco Corp. (CCJ) is your best shot. It’s the largest producer of uranium in North America and – despite flooding at its Cigar Lake site last year – Cameco remains the world’s largest and most liquid uranium miner, making it vital to the global supply.

“The company’s profit more than doubled in the first three months of 2008, surging 125% on its uranium and gold mining operations.”

Read on here to find out which blue-chip mining companies Jason thinks have maximum profit potential.

Doug Casey in Casey Research has picked up on some other Canadian uranium mining companies: “Hathor Exploration tagged a radioactive one on its 90% owned Midwest NorthEast uranium property in Saskatchewan. The latest drill results included 15 metres running an impressive 10.02% U308 in one hole and 10.06% U308 over 9 metres in another. Nice. Hathor ended the day up C$0.27 at C$3.05, while 10% carried interest holder Terra Ventures closed flat at C$0.75.”

“The days of meeting an unchecked demand for energy through monolithic carbon intensive power stations are coming to an end. Increasingly the emphasis will be on energy efficiency, renewables, cleaned up fossil fuel plant and micro generation,” the company said in a statement accompanying its full-year results, according to Britain’s The Guardian newspaper.

SSE, which currently gets 15% of its energy from nuclear suppliers, said it believed “one more tranche of nuclear power stations will be necessary, but that the deployment of such power stations should be minimised through the maximum exploitation of renewable energy sources.”

“The richest investment opportunities can be found in the fast-emerging alternative energy sector,” says Mike Burnick in The Offshore A-Letter.

“That’s where oilman T. Boone Pickens is putting his money – his company Mesa Power just placed an order for US$2 billion in wind turbines. And there’s much more profit potential in other parts of the alternative energy sector too – especially alternative fuel.

“The market for ALL alternative energy sources grew 40% last year alone to US$77.3 billion and will explode into a US$250 billion industry within 10 years.

“Bio-fuel grew to a US$25.4 billion market last with more than 15 billion gallons of ethanol and biodiesel produced globally – more than double the output of just four years ago. The worldwide Bio-fuel industry will continue to enjoy explosive growth for years to come – expanding into a US$81 billion business within the next 10-years!”

Floyd Brown in Investment U looks at another alternative energy source: the Fischer-Tropsch process, used to create synthetic fuels.

“The process works like this: Coal is broken into its components by subjecting it to high temperature and pressure, using steam and measured amounts of oxygen. This leads to the production of synthetic gas.

“In the United States, a small firm provides technology to produce ultra-clean synthetic fuels and chemicals. It licenses its proprietary derivative process from the Fischer-Tropsch method.

“It converts synthesis gas derived from coal, petroleum coke, biomass, natural gas, or municipal solid waste into liquid hydrocarbon products. This includes ultra clean diesel fuel, jet fuel, naphtha, specialty chemicals and other fuel products. It also manufactures anhydrous ammonia, UAN, nitric acid, carbon dioxide and granular and liquid urea.”

Read on here to find out Floyd’s cashing in on this conventional energy alternative.

A $1 billion deal signed last week with Russia to build and supply a uranium enrichment plant in China was another step towards civilian nuclear independence, less than two decades after its first nuclear generator came on line.

But China is also ramping up its domestic nuclear expansion plans […] its own experts admit they will have to devote most of the country’s technical know-how and a large portion of both listed and state-owned firms’ capital to what will be the fastest nuclear build-out the world has ever seen. It will need to start construction on about 4 new generators a year through 2015 to meet its ambitious target.

“Uranium represents the long-term solution to potential fuel shortages – and it offers a solution to global warming, to boot,” says Jason Simpkins in Money Morning.

“Uranium-powered commercial nuclear plants are cheap to operate, can run a long time, and when operated correctly cause little pollution.

“So where should you look for profit opportunities? If you look at the charts, some uranium mining company stocks appear to move up and down in virtual lockstep with spot prices.”

Read more here to find out how to cash in on this future money spinner with Jason’s hot uranium company tips.

“Alternative energy opportunities such as uranium and so-called ‘green energy’ investments will benefit from soaring prices for conventional energy sources,” says William Patalon III in Money Morning.

“When it comes to these profit plays, it will pay to keep all your bases covered.”

As the Gulf population soars, demand for electricity has reached crisis point – so much so, they’re being forced to divert valuable oil meant for sale to the West, to domestic use… and it’s hitting their profits.

Nuclear power is the long-term objective… but until then coal will bridge the gap.

And one little-known company is perfectly placed to benefit from this imminent wave of investment…

A power crunch in the Gulf States has been brewing for years – and it’s reaching crisis point.

As their economies rapidly develop and populations soar, demand for power is rising at a double-digit annual rate.

This demand means profitable oil and gas meant for export has to be burnt to generate domestic electricity – instead of being sold on the open market for record prices.

To maximise the profits from their energy resources, Gulf States will go nuclear. Talks have been held with the US and France and deals have been signed.

But here’s the thing…

It takes time to build and develop a nuclear power station, and something needs to fill the gap until then… and, according to today’s Times, it looks like it is going to be coal.

‘King Coal’ to replace oil – a great medium-term profit play

According to the newspaper, oil-rich Gulf States are planning to start importing coal.

Oman Power and Water Procurement Company indicated in December that a planned 700-megawatt power and water desalination plant may need to be fuelled by coal instead of natural gas.

Last summer Abu Dhabi’s oil output fell by 600,000 barrels per day as natural gas was diverted from injection into oil wells to power stations to meet peak demand for electricity.

I’ve been bullish about the price of coal for some time. Despite its reputation as a dirty fuel, there is simply no alternative.

Overnight, two of Canada’s major coal producers announced a large jump in metallurgical coal prices for 2008.

Fording Canadian coal trust settled contracts at $275/tonne for all coal projects, compared with $93/tonne in 2007. Western Canadian Coal negotiated a majority of is 2008 coal year contracts for hard coking coal at an average above $300/tonne, an increase of 365% over 2007.

There has been supply disruption in South Africa because of the electricity crisis, in China because of heavy snow and now the earthquake, with mines in Australia flooded by heavy rain. Indonesia, the world’s biggest coal exporter, says most of its output for 2008 is already sold!

The outlook is pretty clear to me: Demand is higher than ever, supply is squeezed to the brink.

And I believe I’ve found the perfect stock to profit from the return of ‘King Coal’…

Up 17% since October ‘07 and there’s a long, long way to go yet!

I first recommended my readers get into the coal story back in October 2007… Since then it’s risen 17% and I reckon it has much further to go.

Why? Let me explain.

Besides global demand for the “dirty” fuel at record levels, I expect this unique coal profit play to do very well regardless.

You see, unlike its rivals, the company currently generates revenue from two sources – BHP Billiton’s Crinum underground coking coal mine and Rio Tinto’s Kestrel open cut operation, both in Queensland, Australia.

Their objective is to expand its strategic mining and royalty interests through investment in mineral exploration and mining projects. As an active shareholder, it aims to develop an involved relationship with the companies in which it invests and provides strategic and corporate finance advice.

Management leverages its contacts in the mining industry to find suitable investment opportunities, and liaises with an advisory panel to assess the technical aspects of potential future projects.

Cashflow from the existing royalty streams is either re-invested in new mining interests, or paid out to shareholders.

Great for the share price… and even better for dividends too!

It really is a rare gem in a sector that’s had some troubles of late.

Setbacks due to liquidity problems in the overall market continue to make mining finance difficult to raise from conventional lenders.

As a result, this company – with its strong balance sheet and experienced management team – is well positioned to provide finance for projects that can secure new royalty flows and develop its mining interests.

With coal looking set to fill the gap until the new nuclear revolution happens, there’s plenty more royalties to be had.

Management has proven that it knows what it is doing and tightness in credit markets means the company has lots of investment opportunities from which to choose.

Take a three month trial run of Smart Commodities UK and all details of this share will be yours in an instant.

Regards

Garry White
Editor
Smart Commodities UK

Source: Coal Demand Booms, Here’s One Investment to Buy Now

A year ago the Miner Diaries noted that uranium was the unexploited opportunity for South Africa’s gold stocks. It is a by-product of the gold mining process, and the price has been rising, so it could solve mounting cash costs. And it is the raw material for increasingly popular nuclear power. Bingo!

The big South African gold miners have been pretty slow to decide the best way to harness this potential. In fact, before Bernard Swanepoel, (Harmony’s last CEO), jumped ship he admitted that Harmony had been sitting on its uranium potential for five years! At one point, Harmony had even considered selling its uranium assets. Fortunately, that was not to be.

Anyway, after mulling for years over how best to exploit this opportunity, the process is over. Last month, Harmony decided to put 40% of its energy – pardon the pun – into a new company.

This is a strategy that mirrors that of Simmer & Jack Mines. It owns 63% of First Uranium. There is also interest from international companies – Australian-listed Mintails wants a slice of South Africa’s yellowcake. And, unsurprisingly, majors Goldfields and AngloGold Ashanti are also considering how to get the best value out of their uranium assets.

The race is on to dominate this new battlefield.

And there is gold here too

Though initially this baby was just referred to as “newco”, Harmony’s new JV now has a name. The guys have kept it simple. Led by John Munro, former VP and head of corporate development at Goldfields, “newco” has been registered as “Rand Uranium”. Logical! After all, the core assets are at Harmony’s Randfontein site, south of Krugersdorp which is West of Joburg.

The remaining 60% in “Rand Uranium” will be held by Pamodzi Resources Fund. This is backed by private equity investors, First Reserve and also AMCI Capital. The t ransaction is said to be worth $420m.

So, unsurprisingly, Harmony is being energetic about the project. In fact, CEO Graham Briggs has been quite clear that he intends to retain that 40% holding even if that means investing more to avoid dilution of its shareholding.

Gold companies in South Africa need all the help they can get. Using Rand Uranium as a platform for growth seems a step in the right direction. The plan is to maximise returns from its uranium assets while not breaking the bank.

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Drilling has already taken place and the reserves fall into the more reliable ‘measured and indicated’ categories. That is a grade of 0.215kg of U308 per tonne of excavated material, versus 0.05 to 0.07kg/tonne at other dumps around South African’s West Rand. By the way, U308 is ‘yellowcake’ – the impure mix of uranium oxides which are obtained while processing uranium ore. It is used to prepare fuel for nuclear reactors.

In addition to those reserves, there is said to be some underground resource which will yield more uranium and possibly gold. Let’s not rush, though. The project is still in the pre-feasibility stage, so any profit or resource projections would be premature.

The measure of the man

Forty-year old Mr Munro has a degree in chemical engineering from the University of Cape Town. Working at Goldfields since 1991, he has worked his way up the ladder to the top. Soon that seemed a bit run of the mill. He wanted to be closer to some real action with visible pay-offs. The energy sector offers that.

Another key attraction was the “private equity angle”. Spared the disciplines of stock market reporting the company can take a softly, softly approach. Absent are the pressures of quarterly reporting.

Before taking the job he spent two months assessing Cooke’s viability. He is pretty confident! Some estimates value Cooke’s resource at US$40/tonne. Gold accounts for $6-7/tonne of that, and uranium for $33/tonne. Very nice! And Munro is confident that whichever way you look it, the margins are “significant”.

And also desirable! First Uranium and Russia’s Renova apparently also tried to bid for Harmony’s assets.

Timing is everything

As an unlisted company with no share price to assess performance, what should Harmony want to see from its new venture? The immediate plan is to bring the existing assets to production. Uranium production will come first, followed by gold.

There are two critical periods ahead. The first is to complete the feasibility study – that should happen by the end of 2008. Then developing production will take a minimum of two years after that.

Once in production, Rand Uranium could qualify as the world’s tenth biggest uranium producer. And in three years time the plan is to list.

Right now the sale may help Harmony to pay down some of its ZAR4bn debt! And it should certainly mean big profits when the company reports in June. (Admittedly an exceptional profit, which won’t affect headline earnings.)

Still, Pamodzi could just be the energy boost Harmony is after.

Keep mining,

Erin and Isabel