Commodities | Apr 19 2007
By Rudi Filapek-Vandyck
Chinese authorities have unveiled a plan to build a strategic uranium reserve in the coming years, Chinese media and international press agencies report. The plan is part of a wider strategy to expand the country’s nuclear power industry by 2020.
The so-called national strategic reserve of natural uranium is part of a five-year plan for the Chinese nuclear industry and was revealed in a document released by the Commission of Science Technology and Industry for National Defense.
The document, entitled the 11th Five-Year Plan for the Nuclear Industry, says China will encourage careful exploitation of domestic uranium deposits while improving its domestic production capacity. The plan covers the years 2006 to 2010.
The announcement marks China’s third strategic reserve after its strategic grain and oil reserves.
Over the next 10 years, China will construct up to three nuclear power plants each year, resulting in increased demand for nuclear fuels of between four and six times current consumption, according to the report.
China is reportedly to focus its domestic uranium exploration in the Yili Basin in northwestern China’s Xinjiang region and in the Ordos Basin in Inner Mongolia.
In February, China National Nuclear Corp said it signed a strategic cooperation agreement with Sinosteel, one of the country’s largest steel manufacturers, to jointly invest in and explore overseas for uranium resources.
FNArena has received information from industry sources over the past few months confirming that Sinosteel is trying to negotiate deals to invest in uranium assets in Australia.
In January, Australia and China ratified a nuclear agreement clearing the way for Australian export of up to $187m worth annually.
Currently nuclear power only provides circa 1.9% of China’s total energy needs. The intention is to increase this to 4% by 2020.
After nearly doubling in 2006, the uranium spot price has surged to US$113/lb, from US$75 in January, as production losses at key producing sites have further tightened global supply.