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.”

“Prepare for the onslaught of relatively inexpensive Chinese turbines,” said Steve Sawyer, head of the Global Wind Energy Council, in Wired magazine.

In 2007, China became the world’s number one producer of photo-voltaic cells, holding 35% of the market. Sawyer reckons that China will make enough equipment to generate 10 gigawatts of power annually by 2010 — more than half the capacity that the whole world installed in 2007. More from that story:

China has three big reasons for jumping feetfirst into the carbon fight. Obviously, there’s the threat of climate change — flooding in China’s coastal cities, drought in the country’s interior. Second, there’s political instability: Air and water pollution is already a flash point for public protests. And then there’s the burgeoning export market for green products stamped made in china.

Will renovating the planet spur the first wave of homegrown Chinese tech innovation? Jeff Immelt, CEO of General Electric, thinks so. “China has as much or more at stake than anyone,” he said at a recent corporate summit. “Solar energy, carbon sequestration — we’re going to be blown away by China’s progress over the next couple of decades.” If only they could clean up Beijing’s air in time for the summer Olympics.

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

“That said, it’s also become clear that – with the enhancements to plant design and operation – commercial nuclear energy is the safest, cleanest, cheapest source of the massive amounts of electricity that will be needed to achieve three key objectives: 1) To fuel global growth; 2)To avoid a worldwide energy crisis; and 3) To battle the long-term environmental effects of global warming.”

That was the dismissive view of one-time Boom Town Rat and anti-poverty campaigner, Bob Geldhof, in a global warming debate last December. It’s got to be nuclear, he argued. We’re with you there Bob.

Good news then. At last nuclear power gets the green light from government. “After nearly a decade of indecision,” Britain’s going nuclear, reports the FT.

Nuclear power provides 19% of Britain’s electricity, but that will increase “significantly” over the next 20 years. How significantly we don’t know: but given Britain’s depleting North Sea bounty a move to reduce dependence on imported energy from “potentially volatile states” is encouraging. And then there’s those zero carbon emissions too.

After the years of dithering, Business Secretary John Hutton now wants to “fast track” the development of Britain’s aging nuclear fleet, all but one of which are presently slated to close within the next 15 years. “We should keep our foot down on the pedal,” says Hutton in a bid to make up for time lost in the bureaucratic miasma.

The intentions get a little fuzzier around the edges when it comes to who’s going to pony up for the rebuild. The government, who own 39% in Britain’s nuclear energy company, British Energy, and plan to sell down some of its stake “don’t want the taxpayer to be involved in new nuclear investment”. But there’s no shortage of investors interested in the construction programme assures the minister. We’ll have to wait and see on that.

Meanwhile, shares in British Energy have bucked the trend of another down day on the FTSE and are up more than 4% on the news at 569p. As for uranium, the current spot price for processed uranium has dropped back a good deal from a recent high of over $130/lb and is now $73/lb.

From industrial commodities to soft commodities… For those of us reliant on caffeine injections to get them through the day, look like we’re going to be paying more for the privilege. The price of coffee is going up for reasons that play throughout the commodity sector – record low coffee stocks and rising demand. Tim Bond of Barclays Capital, writing in the FT, puts it bluntly. Commodity markets have been struggling with a demand shock from “rapidly developing middle income economies.” On the supply side “scarcity is endemic”:

“The broad story is one of depletion. Most of the easily obtainable resource deposits have already been exploited and most usable agricultural land in production. Natural resource discoveries, where they continue to occur, tend to be of a lower quality and are more costly to extract. Meanwhile, the dwindling supply of unutilised land faces competing demands from biodiversity, biofuels and food production.”

According to the International Energy Agency the global energy sector needs to spend $22trn over the next twenty years to keep up with energy demand.

As the pound withers in the foreign exchange market, the Bank of England’s Monetary Policy Committee votes to stick on interest rates at 5.25%. In the money markets, signs of distress are reappearing in inter-bank lending. Three month LIBOR, a benchmark rate at which banks lend to one another, hit a two month high yesterday, reports the FT “amid signs that banks are hoarding cash,” fearful of more hedge fund blow ups.

Finally, a thought from the ever quotable Warren Buffett…

“…to perform as well in this century as it did in the past one, the Dow Jones Industrial Average will have to rise to about 2,000,000 on December 31st 2099, up from below 13,000 today.”

Regards,

Rob Mackrill
The Daily Reckoning

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While we have been arguing with Greenpeace and fudging our energy strategy Les Gaulois have been quietly continuing to generate nuclear power and remain relatively unconcerned by the upcoming energy crunch… indeed they have positively turned it to their advantage.

There is a shortage of nuclear engineers in the world. That’s what happens when an industry shrinks… no-one trains in the field.

The UK’s nuclear industry is facing a skills crisis as experienced nuclear engineers approach retirement amid an acute shortage of UK graduates to replace them.

Fewer than 6% of the estimated 100,000 people who work in the industry – including 23,500 at degree level – are under 24, while 31% are aged 45 and over.

At British Energy, which operates 8 nuclear power stations, up to 40% of staff are set to retire within the next ten years, according to David Barber, the head of training.

However, France embraced the nuclear industry and has many engineers, technicians and specialists in the field. It is going to make the most of this and export its knowledge, making big bucks and guaranteeing employment for its citizens for many years to come.

In January, French President Nicholas Sarkozy toured the Middle East just a few days after George W Bush. However, while Mr Bush was obsessed with trying to counter Iran’s influence, Mr Sarkozy was there to strike deals that would enrich mother France… and he was very successful.

The French president has signed an agreement to build nuclear power stations in the Gulf – and this deal is expected to secure revenues of around £3 billion for French businesses. This follows a recent £6 billion deal with the Chinese.

Next: South Africa

So, with billions to come into French coffers from China and Arab countries, why not follow all the energy crises and make even more cash too..?

Of course, South Africa has been hitting the headlines. Its economic growth could be severely stunted if it does not get the current energy crisis under control… So, to the rescue, comes the caped energy superhero that is La France…

Nicolas Sarkozy continued his jet-setting and found himself in South Africa last week.

Following last Thursday’s talks with President Thabo Mbeki, France came away with a 1.4-billion-euro deal for French group Alstom to supply turbines for a new coal-fired power station.

Sarkozy also promised to send a team of engineers from Areva, which is bidding to build a second $15.8 billion nuclear power plant in South Africa, and electricity utility EDF to help the country resolve chronic power shortages.

The decision on the new reactor will be taken later this year. France’s Areva and the US’s Westinghouse Electric have submitted bids to Eskom. The two companies are bidding not only to build the first new power plant, but also to provide up to 20000MW of nuclear power by 2025.

Westinghouse is bidding with construction company Murray & Roberts and the US’s Shaw Group, in a consortium called N-Powerment. Areva, which built the original two Koeberg units, heads a consortium that comprises construction group Aveng, French construction company Bouygues and electricity group EDF.

Will all the help and aid being given by the charmant Sarkozy tip the balance in France’s favour…? We shall see… But France appears to be a country which is set to benefit from the energy crunch. The food is pretty good too… I might just have to move there as soon as I can.

Regards,

Garry White

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