grumpyone

Uranium on the Rise

I do have to admit that I am not near as astute or well read on the subject of the future supply of Uranium as Mr. Coombes. I think one has to do some not so easy arithmetic to declare an "oversupply for years". We have to not only know the probable production, but also the probable consumption, and for years into the future while great changes in both are occurring - and that's not easy to do. With the advent of pebble bed reactors which can be spread out everywhere over a country, the acceptance and the use of nuclear power will rise dramatically. We all know they can be built much much faster than traditional nuclear power plants, much cheaper, and are not meltdown dangerous. We also do not know what other technical advancements will be made as the industry proliferates - good minds will rise to the challenge so that small plants can be built "everywhere". I am not any kind of authority, but I have invested in several uranium mines and do a fair amount of reading from many different sources just to try to stay up on the industry.

I do not know the percentage of production now, nor anticipated in the future, which is being done in situ, i.e. not by mining in the traditional sense. I know that the properties of the uranium deposit dictate whether that deposit can be recovered with that method, but a certain percent of total world production will be acquired without "mining". There are uranium producers who specialize in this technique, others who use both, others who mine only.

I disagree that nobody is analyzing the true production cost of uranium. I am certain that most every quality operation in the business has that down pat, and could teach us all a lesson on that.

I also disagree on the matter of anti-nuclear bias. From what I read, the tree huggers realize that uranium is a clean fuel and compared to coal, oil, and natural gas, it is a far cleaner fuel to create the world's power - they are in fact now endorsing the use of nuclear vs the carbon fuels, because it is better for the environment.

I do not believe that Mr. Coombes properly addresses the broad supply/demand situation for uranium. As astute as he is, even he cannot know the future supply, nor the future demand, nor the rate of increase of either.

We have almost 300 years supply of coal in the US, more than any other country on earth. Nonetheless, all the coal mine companies are doing just fine. So will the Uranium miners, no matter how many years supply there is in the ground. These mining companies are not stupid.

I don't know where Mr. Coombes got his information that it will be at least a decade before China has nuclear power plants on line. I was in China in October, and that is not what I was told. Their concern to clean up their air is much stronger than you think. They well understand that their coal power plants and manufacturers are polluting their people (especially their children), their water, their land, their health, .... everything. A decade or more to put nuclear power plants on line? I don't think so! They can and will
do it much faster than that. Their testing on pebble bed reactors is almost complete.

There are 440+ nuclear reactors in operation that generalte about 16% of the world's electricity. Another 25 are under construction,
38 are on order, and 115 are proposed. And that is just for now.
Also, there are 284 research reactors, and 220 nuclear-powered ships and submarines patrolling the oceans. The industry is not predicting an over supply of Uranium any time soon - and they may find that they cannot meet the demand, certainly now, maybe never. Only time will tell on this issue. Meanwhile, the miners are buying up more land that they suspect has Uranium deposits. Why in the world would they do that? Not to oversupply the market I am sure!

I am only suggesting that it is possible that Mr. Coombes opinions are just that - his opinions, and he can, and probably, is entirely wrong. I would not let his article scare you away from investing in uranium mining. Instead I would suggest you do your own due diligence, do a LOT of investigation and reading, and decide for yourself. Don't let one man's opinion scare you off. And I am not certain that the "majority" of uranium stock traders are basically inept analysts (while he is not) feverishly drawing trend lines. I think that is simply a hogwash statement to make, and I doubt that he has any facts or evidence to back it up.

Good luck with whatever investing you decide to do - I am going with both big and small uranium miner investments, have already done so, and will do more. And that is just my own decision!