Uranium writing is on the wall

Also, Reuters recently reported on China’s soaring consumption of electricity. In 1980, that country had 65 gigawatts of installed generating capacity. Last year, that had risen to 874GW. It shows the frantic pace of expansion that the generating capacity is forecast to reach 1500GW within the next 10 years.

But then look at the nuclear capacity. Just 9GW last year, 39GW expected by 2015 and 80GW by 2020. That is going to need a lot of uranium.

Which is useful background when noting a very brief announcement this morning from Paladin Energy. The company has signed a memorandum of understanding with China Guangdong Nuclear Power Holding Corp over future supply of uranium. Interestingly, CGNPC is involved in the construction of a new nuclear power station in the Guangxi Zhuang autonomous region, with the start of work announced just last week.

Paladin said the MOU could mean an expansion of its activities in the Northern Territory through its joint venture relationship with Energy Metals.

CGNPC owns 69.3 per cent of EME, which in turn has just over 50 per cent of the Bigrlyi uranium deposit in the Northern Territory, where there is a 2009 resource of 13,000 tonnes. The other big stakeholder in that is PDN.

CGNPC is only one of two Chinese companies authorised to import uranium.

So now you can see the significance of that brief announcement this morning. Expect a surge of uranium action in the Territory.

By the way, there is a third partner in Bigrlyi, a player that gets very little attention. Holding a 5 per cent stake is Southern Cross Exploration, last traded at 3c. SXX is the vehicle for the well known exploration and Poseidon-era veteran Boris Ganke.

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