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Uranium Week: Consumers May Finance UK Reactor

Weekly Reports | Aug 19 2020

This story features PENINSULA MINERALS LIMITED, and other companies. For more info SHARE ANALYSIS: PEN

Hitachi is talking to the UK government about resurrecting plans for a nuclear power plant in Wales, while the spot uranium price takes a tumble.

-Hitachi is seeking to revive plans for a nuclear power plant in UK
-US uranium production continues to decline
-Uranium spot price indicator falls nearly three percent

By Mark Woodruff

Horizon Nuclear Power, a UK-based subsidiary of Hitachi, has been holding “detailed conversations” with the UK government in recent weeks to persuade ministers that the proposed Wylfa Newydd plant on Anglesey in North Wales could be quickly re-mobilised if they can produce a new financing model for large nuclear power stations in Britain, according to a report in the Financial Times.

The government launched a review into a “regulated asset base” funding model, which would see consumers pay upfront through their energy bills for a new plant and significantly reduce the construction risk for developers, FT reports.

There has also been talk in the industry of the state taking majority stakes in nuclear schemes, which could enable developers such as Horizon Nuclear Power to become contractors.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “New nuclear has an important role to play in providing reliable, low carbon power as part of our future energy mix as we tackle climate change. We regularly engage with developers about their projects.”

Uranium Pricing & Production

Industry consultant TradeTech reports its spot price indicator declined nearly -3% in the last week and has decreased an average of -0.5% per week since mid-May. 

TradeTech’s weekly spot price indicator fell -US90c to US$31.40 last week, on a mere one transaction of 100,000 pounds U3O8.

Average weekly transaction volumes have also declined to 1.2 million pounds per week over the last 3 months, from a high of nearly 2.3 million pounds per week in April.

TradeTech's term price indicators remain at US$36.50/lb (mid) and US$39.00/lb (long).

According to the US Energy Information Administration’s (EIA) latest quarterly domestic uranium production report, US uranium production continued to decline in the second quarter ended June 30.

The EIA noted in its quarterly report that domestic uranium production had declined considerably in recent years, and activity did not reach a threshold at which a specific production figure could be published without violating the protections that the agency had committed to provide.

During the second quarter, five US uranium facilities produced uranium, one more than in the first quarter of 2020, according to the EIA.

Company News 

TradeTech notes three Australian ASX-listed companies posted among the highest percentage share price gains for the week due to recent announcements.

Peninsula Energy ((PEN)) said it had completed the laboratory stage of optimisation work at its Lance In-Situ Recovery Project in the US state of Wyoming. Berkeley Energia ((BKY)) was granted a land use permit in Spain, required before construction begins for the Salamanca Uranium Mine. And uranium developer Bannerman Resources ((BMN)) has completed a scoping study for development of its flagship Etango Uranium Project in Namibia.

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