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Write You - Miners and Utilities at Odds over Uranium Price Forecasts
Nowhere was it more evident of battle lines being drawn between suppliers and end users in the nuclear fuel sector than at the Platts Second Annual Nuclear Fuel Strategies conference on September 26th. Since April, various utility consultants and fuel brokers have routinely contacted StockInterview to ‘talk down’ the uranium price. Frequent is the mantra about how speculators and hedge funds are driving the spot uranium price higher. But spot uranium and long-term contracts march higher each month. While utilities appear complacent, there is now an underlying panic lurking beneath the surface.
About an hour after UxC announced Tue
About an hour after UxC announced Tue
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
sday’s weekly spot price hike – now to $54/pound, Rajiv Kundalkar, Vice President of Nuclear Engineering for Florida Power and Light took the podium in the Pavilion Room of the Ronald Reagan Building in Washington, D.C. to pound the table as to why uranium prices should take a dive. As Mr. Kundalkar progressed through his presentation, many in the audience wondered if he was the industry’s latest sacrificial lamb. Kundalkar galloped out of the presentation room within moments after he answered the final question.
Clearly Kundalkar’s audience disagreed with his conclusions of a uranium price downturn, sometime in 2007. Questioning
Clearly Kundalkar’s audience disagreed with his conclusions of a uranium price downturn, sometime in 2007. Questioning
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
after his presentation could be summarized in one word: brutal. It was because Kundalkar argued the uranium price was artificially high due to a perception of tight supply.
He compared uranium’s spectacular price rise over the past six years to the jump in palladium prices. Kundalkar concluded palladium rose and fell, and so should uranium. He particularly emphasized the collapse of palladium mining stocks, which fell after the underlying commodity sunk lower.
He explained there was an abundant supply of uranium from Canada, Australia and Kazakhstan, both now and especially in the coming years. Kundalkar pointed out that delays i
He compared uranium’s spectacular price rise over the past six years to the jump in palladium prices. Kundalkar concluded palladium rose and fell, and so should uranium. He particularly emphasized the collapse of palladium mining stocks, which fell after the underlying commodity sunk lower.
He explained there was an abundant supply of uranium from Canada, Australia and Kazakhstan, both now and especially in the coming years. Kundalkar pointed out that delays i
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
the licensing of new reactors in China and India would suppress the demand for uranium. He added that Cigar Lake, Olympic Dam and Kazakhstan would provide sufficient uranium to meet the Western World requirements.
Rather than blink at the short-term rise in uranium, Kundalkar explained away any concern about the soaring fuel costs by announcing Florida Power and Light was pursuing long term strategies and cost-control initiatives. One such plan was to make reactors more efficient. On the initiative that his plants would become more efficient, one must wonder what maximum capacity those reactors can endure. Ten years ago, nuclear
Rather than blink at the short-term rise in uranium, Kundalkar explained away any concern about the soaring fuel costs by announcing Florida Power and Light was pursuing long term strategies and cost-control initiatives. One such plan was to make reactors more efficient. On the initiative that his plants would become more efficient, one must wonder what maximum capacity those reactors can endure. Ten years ago, nuclear
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
power plants ran 75 percent capacity. Presently, they are being pushed to their limits above 90 percent. Kundalkar was not forthcoming in any details about how his utility would institute cost-control initiatives.
After we called him on his three main sources of supply, asking Kundalkar if he had measured the risk variables inherent with those regions, he acknowledged he had done so. Instead, we lean toward believing he glibly digested industry reports, as far too many have done, but failed to investigate further or probe deeper about supply risks. Another questioned Kundalkar if Florida Power and Light had participated in the rec
After we called him on his three main sources of supply, asking Kundalkar if he had measured the risk variables inherent with those regions, he acknowledged he had done so. Instead, we lean toward believing he glibly digested industry reports, as far too many have done, but failed to investigate further or probe deeper about supply risks. Another questioned Kundalkar if Florida Power and Light had participated in the rec
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ent Department of Energy uranium sale. The utility had not. He admitted he thought the price was too high. Instead, Cameco Corp bought the uranium and quickly resold some of it for a profit.
Bad News for Uranium Bears
Had he not scrambled away from the conference, Kundalkar might have been shocked by the disclosures in the afternoon presentations which followed him. Had Kundalkar presented his thesis to a less savvy audience, he might have received something more than a polite applause when he stepped down. From the disgruntled audience, one long-time industry consultant asked Kundalkar point blank: Have you heard of peak oil?
U
Bad News for Uranium Bears
Had he not scrambled away from the conference, Kundalkar might have been shocked by the disclosures in the afternoon presentations which followed him. Had Kundalkar presented his thesis to a less savvy audience, he might have received something more than a polite applause when he stepped down. From the disgruntled audience, one long-time industry consultant asked Kundalkar point blank: Have you heard of peak oil?
U
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
witting denial about supply risks has its consequences. The next step down the descending staircase for complacent U.S. utilities came from Jim Ferland, head of Louisiana Energy Services (LES). This was Ferland’s final appearance on behalf of LES as he has since taken a VP job with Westinghouse. In his parting speech, Ferland announced an anti-nuclear lobbying group had filed an appeal against LES for their NRC license in the District of Columbia Circuit Court. He warned there was a potential risk of a stay or worse. By worse, Ferland inferred the uranium enrichment plant might never operate at all. The consequence of ‘worse’ hung
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
like a dark cloud in the room.
Should the appeal be dismissed, Ferland cautioned about labor availability in eastern New Mexico. Already, the company is worrying about higher labor costs and is expecting to go over budget on both plant construction and operations. LES may have difficulty finding an ample supply of electrical workers and aluminum welders necessary for building the National Enrichment Facility. He announced that getting the NRC license was relatively easy compared to what the company would go through to construct the enrichment plant.
U.S. utilities are counting upon the new uranium enrichment center for the SWU to
Should the appeal be dismissed, Ferland cautioned about labor availability in eastern New Mexico. Already, the company is worrying about higher labor costs and is expecting to go over budget on both plant construction and operations. LES may have difficulty finding an ample supply of electrical workers and aluminum welders necessary for building the National Enrichment Facility. He announced that getting the NRC license was relatively easy compared to what the company would go through to construct the enrichment plant.
U.S. utilities are counting upon the new uranium enrichment center for the SWU to
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
power their reactors. Will it arrive on time? No one can say right now, but Ferland stuck to LES projections of the first SWU being delivered by fourth quarter 2008 and three million SWU generated in late 2012 to 2013. An expansion decision won’t be made until 2009. But then again, Ferland will be at Westinghouse in Pittsburgh, not in New Mexico where LES will be sweating to build that facility.
More Bad News if Utilities Believe Kazak Projections
In what would qualify as the most sincere presentation of the day, Power Resources Chief Executive Fletcher Newton discussed the upside and downside of uranium mining in Kazakhstan. It
More Bad News if Utilities Believe Kazak Projections
In what would qualify as the most sincere presentation of the day, Power Resources Chief Executive Fletcher Newton discussed the upside and downside of uranium mining in Kazakhstan. It
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
is both a tribute to the crystal clear transparency of Cameco and their subsidiary, Power Resources, in providing us the truth about this difficult Central Asian country. Promising as Kazakhstan sounds on paper, Fletcher Newton concluded during his presentation that mining in this country would be challenging. More specifically, he said, “There is lots of uranium out there, but getting it will be a challenge.”
Newton described the Inkai solution mining project in Kazakhstan, of which one section is 600 feet long by 300 feet wide. It will be the largest solution mining project in the world – producing about 2000 tons annually, roug
Newton described the Inkai solution mining project in Kazakhstan, of which one section is 600 feet long by 300 feet wide. It will be the largest solution mining project in the world – producing about 2000 tons annually, roug
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
hly 5 million pounds. The deposit has extraordinary head grades, which is the uranium grade at the commencement of the solution mining. Newton pointed out that in the United States head grades are about 100 parts per million (ppm) of uranium. At Crowe Butte (Nebraska), Power Resources is getting 43 ppm.
By comparison, the head grades in Kazakhstan reach 250ppm and are averaging over 200ppm. While the deposits are deeper, down to 1500 feet, Cameco will be drilling about five times fewer wells because of those exemplary ppms. The cost per well will be more expensive, but there will be less wells to drill. Of course, there are shorta
By comparison, the head grades in Kazakhstan reach 250ppm and are averaging over 200ppm. While the deposits are deeper, down to 1500 feet, Cameco will be drilling about five times fewer wells because of those exemplary ppms. The cost per well will be more expensive, but there will be less wells to drill. Of course, there are shorta
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ges of drill rigs, which adds another frustrating twist to mining in this country.
To mine these deposits by the in situ leach method, Cameco/Power will need about 40 kilograms of sulphuric acid to produce one kilogram of uranium. Newton bluntly announced, “To mine 100 metric tons of uranium will require 40 million kilograms of sulphuric acid.” He explained this annually amounted to 2200 truckloads of sulphuric acid – about six truckloads per day. Every day year ‘round.
From where will Cameco get this vast amount of sulphuric acid? Newton explained there were literally mountains of sulphur waste remaining from the high-sulfur Cas
To mine these deposits by the in situ leach method, Cameco/Power will need about 40 kilograms of sulphuric acid to produce one kilogram of uranium. Newton bluntly announced, “To mine 100 metric tons of uranium will require 40 million kilograms of sulphuric acid.” He explained this annually amounted to 2200 truckloads of sulphuric acid – about six truckloads per day. Every day year ‘round.
From where will Cameco get this vast amount of sulphuric acid? Newton explained there were literally mountains of sulphur waste remaining from the high-sulfur Cas
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ian oil production. From there one could obtain sulphuric acid. He acknowledged Cameco, Areva or the Kazakhs would first need to build several sulphuric acid plants. His best-case scenario for such a plant would be in five years. On the worst case scenario, Fletcher skirted the issue, explaining the Kazaks needed to streamline their operations.
And therein one finds the headaches. The infrastructure is lacking. New roads will have to be built to replace the ‘camel trails’ and truck the material from the mining operation to the processing facility. The Kazaks aren’t quite ready for all those trucks. Newton explained the arrival of
And therein one finds the headaches. The infrastructure is lacking. New roads will have to be built to replace the ‘camel trails’ and truck the material from the mining operation to the processing facility. The Kazaks aren’t quite ready for all those trucks. Newton explained the arrival of
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
traffic jams in this backward nation, adding an anecdote about a recent traffic accident resulting in a fatality. While we take these for granted, it is an unusual development in the backcountry areas of Kazakhstan where animals are the primary transportation mode. Yet another headache: new transmission lines will also be required to generate the electricity to run the operations.
Newton discussed the weather. Similar to northern Wyoming, he called the weather “a fast changing climate.” He showed his audience a slide of tall snow drifts, explaining the snowstorm produced this much snow in 45 minutes. In the winter, Cameco has lea
Newton discussed the weather. Similar to northern Wyoming, he called the weather “a fast changing climate.” He showed his audience a slide of tall snow drifts, explaining the snowstorm produced this much snow in 45 minutes. In the winter, Cameco has lea
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
rned to keep bulldozers nearby to dig out of the heavy snowfall. In the summer, roads need rebuilt from the flooding.
A more serious problem is the labor force. Newton showed a slide of a cozy Kazak peasant family during his presentation. After he spoke, we talked with him, asking about the labor force. Newton explained that it would be peasants such as the one in the slide that would provide the bulk of labor for Cameco’s Kazak operations. Again, during his presentation he referred to most of the country as having one’s foot back in the eighteenth or nineteenth centuries. We dared not ask him if they still played polo with the he
A more serious problem is the labor force. Newton showed a slide of a cozy Kazak peasant family during his presentation. After he spoke, we talked with him, asking about the labor force. Newton explained that it would be peasants such as the one in the slide that would provide the bulk of labor for Cameco’s Kazak operations. Again, during his presentation he referred to most of the country as having one’s foot back in the eighteenth or nineteenth centuries. We dared not ask him if they still played polo with the he
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
ds of their enemies as they did in the movie, “The Man Who Would Be King.”
What will materialize when the Kazak labor force discovers they need to share in the uranium profiteering? Chilean miners struck in August at BHP’s Escondida copper mine, the world’s largest, this past August, citing the steep rise in copper prices. BHP hopes to avert another strike at the nearby Spence project. Teck Cominco averted a strike Sunday night at the Highland Valley copper mine in British Columbia by reaching a tentative contract with the miner’s union. As utilities and other uranium bears explain that uranium will become more abundant as more co
What will materialize when the Kazak labor force discovers they need to share in the uranium profiteering? Chilean miners struck in August at BHP’s Escondida copper mine, the world’s largest, this past August, citing the steep rise in copper prices. BHP hopes to avert another strike at the nearby Spence project. Teck Cominco averted a strike Sunday night at the Highland Valley copper mine in British Columbia by reaching a tentative contract with the miner’s union. As utilities and other uranium bears explain that uranium will become more abundant as more co
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
mpanies bring on more projects, few are factoring in the rising labor costs, the variables inherent with developing new infrastructure and the likelihood of delays. Environmentalists have also begun rearing their heads over various projects. Few are factoring in this risk. The more active these anti-nuclear groups become, the greater they abet the rising uranium price.
The Milk Anecdote
Business in Kazakhstan is not what one finds in the West. Newton admitted during his presentation that the Kazaks don’t report their uranium production as other countries do. For example, he discovered from a border guard that Kazakhstan had been
The Milk Anecdote
Business in Kazakhstan is not what one finds in the West. Newton admitted during his presentation that the Kazaks don’t report their uranium production as other countries do. For example, he discovered from a border guard that Kazakhstan had been
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
shipping about 50 metric tons of uranium oxide to China every month for several months. But, nothing of that had been reported in the media or to organizations, such as the World Nuclear Association, which track mining production for each country.
One can not be certain of what to believe when KazAtomProm issues a forecast. Yet, many utilities, such as Florida Power and Light, swallow these predictions without a second thought. Questioned about Kazak production forecasts, Newton responded there were those who had “big thoughts.” In the presentation which followed, by Patricia Mohr, Vice President for Economics at Canada’s Scotiaba
One can not be certain of what to believe when KazAtomProm issues a forecast. Yet, many utilities, such as Florida Power and Light, swallow these predictions without a second thought. Questioned about Kazak production forecasts, Newton responded there were those who had “big thoughts.” In the presentation which followed, by Patricia Mohr, Vice President for Economics at Canada’s Scotiaba
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
k, she said while the Kazaks have extremely ambitious plans, their timeline was “unrealistic.”
Newton deftly provided the “milk anecdote” for his audience while avoiding a direct answer to the question about KazAtomProm’s robust production forecasts. He explained that this reminded him of the old Soviet Union, when a top Communist party official met with the general manager of a Russian dairy cooperative. The party official asked the manager if he could quadruple last year’s milk production. Of course, the manager promised he would, vowing that he would do this for the Politburo and so forth. Then, the official asked the manager i
Newton deftly provided the “milk anecdote” for his audience while avoiding a direct answer to the question about KazAtomProm’s robust production forecasts. He explained that this reminded him of the old Soviet Union, when a top Communist party official met with the general manager of a Russian dairy cooperative. The party official asked the manager if he could quadruple last year’s milk production. Of course, the manager promised he would, vowing that he would do this for the Politburo and so forth. Then, the official asked the manager i
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
f he could increase production by eight times. The manager announced it could be done and that he would do it for the glory of the Fatherland. Finally, the party official asked the manager if he could increase milk production by 16 times over the previous year. Exasperated, the manager declared that he would achieve this target, saying, “I can do it, but the milk is going to look a lot like water.”
Perhaps this anecdote will help Florida Power and other utilities become more cautious when readily factoring in Kazak uranium production into their fuel supply expectations.
COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED
Perhaps this anecdote will help Florida Power and other utilities become more cautious when readily factoring in Kazak uranium production into their fuel supply expectations.
COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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