Platts - Friday, May 16, 2008 http://www.platts.com ------------ US uranium production increased 10% in 2007 Washington (Platts)--15May2008 US uranium production in 2007 totaled 4,533,578 lb, up 10% from 4,105,626 lb in 2006, DOE's Energy Information Administration said in a report released May 14. First-quarter 2008 production was 810,189 lb, down from 1,162,737 lb in first-quarter 2007, it said. Production came from one US mill -- Denison's White Mesa in Utah -- and five US in-situ-leach mines, the same as in 2006, EIA said. The mines are Mestena Uranium's Alta Mesa in Texas; Crow Butte Resources' Crow Butte in Nebraska; Uranium Resources' Kingsville Dome and Vasquez, both in Texas; and Power Resources' Smith Ranch-Highland in Wyoming. ------------ Denison says US uranium sold for average price of $90.25/lb in Q1 Barcelona (Platts)--15May2008 Canada's Denison Mines said it sold its US uranium production in the first quarter of 2008 for an average price of US$90.25/pound U308. The company, which released its first-quarter results Thursday also said it sold its Canadian production under existing long-term contracts at an average price in the first quarter of $71.54/lb U308. Most of its US production would be sold in the third and fourth quarters of 2009, Denison said. The company reported a consolidated net loss for the first quarter 2008 of $10.4 million, largely due to setting aside funds for a 5% tax rate increase in Zambia. Net cash from operations for the first quarter were $7,622,000 compared with $5,442,000 in the same period in 2007. Denison said it sold 50,000 pounds of U308 during the quarter from its US operations and 147,000 lbs from its Canadian operations in the quarter. Denison's Tony M mine in Utah began production in the quarter and is currently producing 170 metric tons/d and will ramp up to 450 mt/d by the middle of the year, Denison said. Processing of conventionally-mined ore at the company's renovated White Mesa Mill in Utah began on April 28. Denison said it expects to sell 1.8 to 1.9 million pounds of U308 in 2008, the majority of that from its US production. It hopes to produce between 2.1 million and 2.4 million lbs in 2008, doubling 2007 production. By 2011, the company hopes to be producing between 3.6 million and 6.0 million lbs U308. --David Stellfox, david_stellfox@platts.com ------------ TVA's Browns Ferry-3 unit is exiting refueling outage: US NRC Washington (Platts)--15May2008 The Tennessee Valley Authority's Browns Ferry-3 nuclear generating unit is exiting a refueling outage and operating at 1% capacity, the US Nuclear Regulatory Commission said Thursday morning in its reactor status report. The 1,120-MW unit in Decatur, Alabama, was shut down early Wednesday and had been out of service since March 18 for a refueling outage. There is no estimate of when it will connect with the power grid or reach full power. The adjacent units 1 and 2 at Browns Ferry are operating at 100% capacity, the NRC said. ------------ DOE seeking bids for M&O contract at Yucca Mountain Washington (Platts)--14May2008 DOE is seeking bids for a contract worth up to $2.6 billion to manage and operate the repository project at Yucca Mountain, Nevada, the department said May 13. The request for proposals indicates that the contractor must produce top-quality work during the initial five-year contract period and each of the five possible yearlong extensions to receive the maximum available award fees cited. DOE announced in February that it would recompete the job now held by Bechtel SAIC Co., which has been the M&O contractor since 2001. DOE spokesman Allen Benson said May 14 that nothing precludes BSC from seeking to keep the job. BSC officials were reviewing the RFP on May 14 before deciding whether to bid, company spokesman Jason Bohne said. The new M&O contractor's duties will include completing the repository design, responding to NRC questions during repository licensing, and managing repository construction and, possibly, operation, DOE said. The department is said to be targeting early June for the submittal of a repository license application to NRC. ------------ Uranium spot price falls to $60/pound on little buying interest Washington (Platts)--13May2008 The spot price of uranium continued to tumble over the last week and now stands at $60 a pound U3O8, according to the latest reports from Ux Consulting and TradeTech. The decline -- $3/pound for Ux Consulting and $5/pound for TradeTech -- was apparently accelerated by the decision of Texas-based Mestena Uranium to sell 100,000 lb U3O8, despite not seeing, according to one market source, a "strong turnout" of buyers. Whether Mestena sold the uranium at $60 could not be confirmed, but several sources said the winning unidentified buyer indicated as much. Also unclear is whether that elusive "bottom" of this current cycle in the uranium market is at hand. One analyst said he had been wrong the past three weeks in predicting that the market would see the price stabilize and then rise. Buyers and sellers appear to be making decisions in this market based on their own needs without necessarily paying much attention to longer-term supply and demand fundamentals, the analyst said. Another analyst said there still is abundant supply, with roughly 2 pounds of uranium available for every 1 pound of demand. But whether all those pounds would be available at the current price appears unlikely, said another analyst. Some sellers just are refusing to follow this price down any further, he said. And utilities, said another analyst, shouldn't get too gleeful about the price dropping $3-$5/lb in one week. The fact that the price can drop that fast means that it can also go up by that amount in a week. One could see a noticeable "snapback" to the price pretty quickly if there is clear evidence that the price will not sink further, he said. --Mike Knapik, newsdesk@platts.com ------------ Uranium spot price falls to $60/pound on little buying interest Washington (Platts)--13May2008 The spot price of uranium continued to tumble over the last week and now stands at $60 a pound U3O8, according to the latest reports from Ux Consulting and TradeTech. The decline -- $3/pound for Ux Consulting and $5/pound for TradeTech -- was apparently accelerated by the decision of Texas-based Mestena Uranium to sell 100,000 lb U3O8, despite not seeing, according to one market source, a "strong turnout" of buyers. Whether Mestena sold the uranium at $60 could not be confirmed, but several sources said the winning unidentified buyer indicated as much. Also unclear is whether that elusive "bottom" of this current cycle in the uranium market is at hand. One analyst said he had been wrong the past three weeks in predicting that the market would see the price stabilize and then rise. Buyers and sellers appear to be making decisions in this market based on their own needs without necessarily paying much attention to longer-term supply and demand fundamentals, the analyst said. Another analyst said there still is abundant supply, with roughly 2 pounds of uranium available for every 1 pound of demand. But whether all those pounds would be available at the current price appears unlikely, said another analyst. Some sellers just are refusing to follow this price down any further, he said. And utilities, said another analyst, shouldn't get too gleeful about the price dropping $3-$5/lb in one week. The fact that the price can drop that fast means that it can also go up by that amount in a week. One could see a noticeable "snapback" to the price pretty quickly if there is clear evidence that the price will not sink further, he said. --Mike Knapik, newsdesk@platts.com ------------ Bush sends US-Russia nuclear pact to Congress despite opposition Washington (Platts)--13May2008 President Bush on Tuesday sent a recently signed nuclear cooperation agreement with Russia to the US Congress for review despite opposition from some key lawmakers. The 30-year pact would allow the US to transfer "technology, material, equipment (including reactors) and components for nuclear research and nuclear power production," Bush said in his letter to Congress. Last week, two senior members of the US House of Representatives' Energy and Commerce Committee asked Bush not to submit the agreement until he addresses their concerns about Russia's assistance with nuclear and missile programs in Iran. Committee members are investigating transfers of Russian nuclear technology to Iran from Russian institutes that the US Department of Energy funds. The "Section 123" agreement--which refers to a portion of the Atomic Energy Act of 1954--will "promote, and will not constitute an unreasonable risk to the common defense and security," Bush said. It does not permit transfers of restricted data important to the construction or operation of a nuclear production facility, enrichment plant or reprocessing plant. It would allow, however, the transfer of "sensitive nuclear technology, sensitive nuclear facilities and major critical components of such facilities by amendment to the agreement," Bush said in his letter. "I have approved the agreement and authorized its execution and urge that the Congress give it favorable consideration." The agreement would allow the US to send its spent nuclear fuel to Russia for reprocessing. It also would pave a path for the Bush administration's Global Nuclear Energy Partnership, which aims to promote nuclear power around the world through new kinds of fast-neutron reactors and spent-fuel reprocessing plants. Even without lawmakers' support, the pact will go into effect after 90 days of "continuous" congressional sessions, which is about the amount of time left in Congress' calendar for this year. Congress also can pass a resolution of approval, with or without conditions, or a resolution of disapproval. Before Bush sent the agreement to Congress, sources said both the Senate Foreign Relations Committee and House Foreign Affairs Committee likely would prepare a resolution of disapproval. --Dipka Bhambhani, dipka_bhambhani@platts.com ------------ New nuclear generation projects spur growth, questions: Spurgeon Washington (Platts)--12May2008 Construction of 15 nuclear reactors in the US would create more than 13,000 construction jobs and have a trickle-down effect, putting hundreds more to work in nearby communities, US Assistant Energy Secretary Dennis Spurgeon said Monday. This impact estimate includes less than half of 34 proposed new reactors expected to add about 45,000 MW of capacity to the US. In other countries, nuclear power's projected growth outpaces that of the US, Spurgeon said at an international nuclear engineering conference in Orlando, Florida. "We have recently seen projections anticipating 55 countries operating 630 reactors by 2030," said Spurgeon, head of the Department of Energy's civilian nuclear programs. "[A] total of 86 countries could have nuclear reactors by 2050." Both the growing demand for electricity and concerns about global climate change are triggering renewed interest in nuclear power, both in the US and overseas, according to Spurgeon. But two important questions remain as new nuclear projects gain momentum in the US and around the world, he said. "How will used fuel from nuclear power be best managed? And how will the world community deal with the possibility that the expansion may raise the risk of nuclear weapons proliferation?" Spurgeon indicated reprocessing would answer both concerns. Reprocessing spent fuel and using some of the reprocessed material to make new fuel would reduce the volume and radioactivity of waste needing repository disposal, he said. On the proliferation issue, he added that using the department's Global Nuclear Energy Partnership program to close the nuclear fuel cycle would eliminate the need for some countries to develop their own uranium enrichment and reprocessing facilities. --Elaine Hiruo, elaine_hiruo@platts.com ------------ NRC to decide on Susquehanna license renewal in December 2009 Washington (Platts)--9May2008 An NRC staff decision on Susquehanna's license renewal request is targeted for December 7, 2009, according to an updated schedule released by NRC May 9. Two milestones leading to that decision are also expected next year: issuance of the final supplemental environmental impact statement in mid-March and the safety evaluation report in late August. Susquehanna filed its application in September 2006. If the application is approved, the operating licenses would extend for 20 years, until July 2042 for unit 1 and March 2044 for unit 2. ------------