Platts - Thursday, July 24, 2008 http://www.platts.com ------------ Ignalina management to ask for electricity price increase Stockholm (Platts)--23Jul2008 Ignalina management will ask authorities for an electricity price increase in October, plant manager Viktor Shevaldin said in a statement July 23. Shevaldin did not specify how much more management wants but cited the need to cover nuclear fuel costs that he said have risen by 80%. Shevaldin said fuel accounts for 30% of total electricity production cost. ------------ Task force to review Illinois' nuclear power moratorium Washington (Platts)--22Jul2008 A task force will review Illinois' nuclear power moratorium. The state's General Assembly on July 16 adopted Senate Joint Resolution No. 101 to establish a nuclear power issues task force that will review, in the resolution's words, Illinois' "existing moratorium on new nuclear power generation in the State, looking at the structure and process for new generation, and how nuclear generation can play a role in the future power needs of the State." The task force will also examine issues related to decommissioning; waste storage and disposal, including reprocessing; and "critical security issues such as facility requirements, personnel security requirements and audit programs." The 11-member task force, which has not yet been appointed, is to report its findings to the Assembly by January 1. In February 2007, State Representative JoAnn Osmond introduced legislation, HB 2971, to repeal the state's nuclear moratorium, but the bill is currently "held up" in the House Rules Committee, an Osmond staffer said July 22. Illinois is one of eight states that ties the construction of new reactors to the availability of a federal facility or technology to dispose of spent fuel. ------------ Uranium spot price of $64.50/lb lower than expected: analysts Washington (Platts)--22Jul2008 The spot price for uranium now stands at $64.50/pound for U3O8, up 50 cents/lb according to Ux Consulting's report released Monday and up $1.25/lb according to TradeTech's Friday report. While both price reporting companies said they continued to see a firming of the spot price, their reported prices were lower than some analysts had predicted, given reports that offers to buy uranium at $66/lb were not being accepted by more bullish sellers. Those sellers, analysts said, appear to be influenced by the expectation that the price will move above $70/lb in this current market cycle as new demand from utilities and investment funds enter the market. But given the discretionary nature of most current market demand, another analyst said, it is unclear whether buyers will continue to chase the market price upward -- at least not right away. If buyers back away from the market now, the price could drop several dollars, one analyst said. However, he said, new demand created by that drop could quickly move the price back up. The Platts NuclearFuel range for the week was $63-$69/lb U3O8. ------------ Production estimate from proposed Australian uranium mine raised Barcelona (Platts)--21Jul2008 Projected uranium production from the proposed Bigrlyi mine in Australia's Northern Territory has increased by 93% to 16.2 million lb U308, according to mine manager Energy Metals Ltd. Energy Metals, which manages the Bigrlyi Joint Venture with Paladin Energy, said an updated scoping study of the mine project resulted in the higher production projection and an extension in projected mine life from eight to 12 years, according to a filing with the Australian Stock Exchange July 18. The study assumed a price of US$75/lb U308. The updated scoping study is being independently reviewed. Paladin Energy holds a 42.06% stake in uranium exploration and mine developer Energy Metals. ------------ Nufcor Uranium buys UF6 below spot price for uranium as U308 Barcelona (Platts)--21Jul2008 Nufcor Uranium has bought 237,000 kgs of uranium as UF6 at $5 to $6 below the spot price for uranium as U308. Nufcor said Monday it bought the UF6 for US$38.9 million from a major international counterparty. The purchase, equivalent to 620,532 lbs of U308, comes at an inferred price of US$59.03/lb U308; while the current spot price is $64/lb according to trade publisher Ux Consulting's July 14 price and $65/lb in the July 18 Platts midpoint forward uranium price indicator. The spot price bottomed at $57/lb U308 in late June and has started to rise since then. The uranium Nufcor bought is for payment and delivery in the fourth quarter, the company said. Nufcor intends to pay for the UF6 from its existing cash resources and from the proceeds of the proposed sharing offering in Canada announced June 30. If the offering does not proceed, the directors believe that Nufcor will be able to pay for the UF6 by the sale of some of its existing uranium assets and, if necessary, by the arrangement of suitable credit facilities, the company said. Nufcor Uranium is a Guernsey-incorporated and domiciled investment company created to invest substantially all of its assets in natural uranium with the primary investment objective of achieving capital appreciation in the value of its uranium holdings. The company had a net asset value of US$174.8 million or US$4.24/share as of June 30 and holdings of 2.3 million lbs of U308 and 200,000 kgs of UF6. --David Stellfox, david_stellfox@platts.com ------------ Florida muni group IRP eyes nuclear stake; biomass, solar supply Boston (Platts)--21Jul2008 The Florida Municipal Power Agency said Monday that an integrated resource plan for the 15 municipal utilities that secure power through its "All-Requirements Project" has concluded that the munis should seek to become partial owners of one or more of four nuclear plants now under development in the state. The IRP also recommends that the 15 munis buy 58 MW from a biomass-fired facility and 10 MW from a solar photovoltaic plant. With the nuclear-plant stake, those purchases would help the munis meet Republican Governor Charlie Crist's July 2007 mandate that utility 2017 greenhouse gas emissions not exceed 2000 levels. FMPA said that power demand for the 15 all-requirements munis is projected to rise by about 38% over the next 20 years. It said that a planned demand-response program could reduce peak demand by 44 MW by 2012 and that energy efficiency programs could reduce the 15 munis' 2018 electricity needs by about 4%. FMPA secures power for a total of 20 munis through separate arrangements. The 15 munis that are part of the all-requirements project hold ownership stakes in several existing plants and buy power from others. The 15 munis demanded a total of up to about 1,600 MW in 2007. ------------ IRSN says no uranium found in 19 residents near Socratri plant Paris (Platts)--18Jul2008 No trace of uranium was found in 19 residents near the Socatri plant at Tricastin, in southern France, site of a uranium leak on July 7, the Institute of Radiological Protection and Nuclear Safety, IRSN, reported July 18. IRSN said it had run confirmatory checks on urine samples from 19 people living near the Socatri uranium treatment plant who feared contamination from the uranium-bearing effluent that accidentally leaked offsite and into local rivers and groundwater. The 19 had already been checked at their request at Areva's Tricastin facilities. Socatri is a subsidiary of Eurodif, itself a subsidiary of Areva. Jacques Repussard, IRSN director general, said that the level of uranium in the groundwater around the plant now is under the World Health Organization guidelines for drinking water of 15 micrograms per liter. He said local prefects were expected soon to lift restrictions on drinking well water and using surface water. The restrictions had been in place since the incident. "There is no reason for concern about health" impacts from the Socatri leak, he said at a press conference called by the environment minister, Jean-Louis Borloo. Borloo said he would press for publication of radioecological status reports for all of France's major nuclear installation sites. An initial assessment is due to be completed by September. ------------ British Energy continues talks with potential takeover bidders Barcelona (Platts)--17Jul2008 British Energy is continuing to talk with potential takeover bidders, but BE Chairman Adrian Montague said July 17 he could not comment further. During the BE annual general shareholders meeting, Montague said, "Our dialogue is ... continuing and a further announcement will be made in due course." The UK newspaper Daily Telegraph reported earlier this week that BE had hired a new financial adviser, Gleacher Shacklock, to deal with the takeover issues. The report said Gleacher Shacklock was hired because BE's customary adviser, NM Rothschild, and its broker, JP Morgan Cazenove, both have relationships with Electricite de France, the prime -- and perhaps only -- bidder. However, BE spokesman James Garthwaite said, "Rothschild is still our adviser." He noted that it's possible to have more than one adviser but wouldn't confirm or deny that Gleacher Shacklock had been hired. ------------ Rio Tinto uranium production down in second quarter Washington (Platts)--16Jul2008 Rio Tinto on July 16 reported second-quarter uranium production of about 3.149 million lb U3O8, down from 3.207 million lb the same time last year. Rio Tinto has a 68.4% interest in Energy Resources of Australia Ltd.'s Ranger mine and a 68.6% interest in Rossing Uranium Ltd.'s Rossing mine in Namibia. Rio Tinto said its share of production from ERA was 1.643 million lb in the just-ended quarter, down from 2.236 million lb a year ago. It said its share from Rossing was 1.505 million lb, up from 971,000 lb in second-quarter 2007. The downturn at Ranger was due to lower-than-normal stockpiles of high-grade ore, Rio Tinto said. Rossing had higher-grade ores than a year ago, it said. ------------ Florida PSC approves Progress Energy plan to build two nuke units Washington (Platts)--15Jul2008 Florida regulators on Tuesday approved Progress Energy's plan to build two nuclear reactors in Levy County, about 10 miles north of the company's existing Crystal River-3 nuclear plant. The Florida Public Service Commission's five members voted unanimously to approve the company's petition for a determination of need for the new reactors, which would have a capacity of about 1,100 MW each. Under the utility's plan, the first unit would go online in 2016 and the second in 2017. Before new electric generating capacity can be built in Florida, the PSC must determine that it is needed. The PSC staff recommended July 2 that commissioners grant Progress Energy's petition. In March, the commissioners unanimously approved Florida Power & Light's petition for a determination of need for two new nuclear units at its Turkey Point site. Progress Energy officials have told the US Nuclear Regulatory Commission that the company plans to submit an application this month for a combined construction permit-operating license for the new Levy reactors. Progress Energy has said the new reactors would cost about $14 billion to build, and that those costs could escalate if the units are not constructed within 18 months of each other. --Tom Harrison, tom_harrison@platts.com ------------ Spot uranium prices jump $4 in last week to $64/pound: analysts Washington (Platts)--15Jul2008 The spot price of uranium jumped by $4 over the last week to at least $64 a pound U3O8, the price reported late Monday by Ux Consulting and a number of analysts believe the market is looking at still more upward pressure. Pricing reporting firm TradeTech, which on Friday raised its price to $63.25/lb from $60/lb, noted there is strong demand for material with at least nine buyers seeking nearly 3 million pounds. As a result, TradeTech said, sellers are "seizing the opportunity to increase offer prices." Ux Consulting said many suppliers are now looking to sign only market-related spot contracts, a move that is "reminiscent of past periods when prices moved up quickly." While some more utility demand is starting to emerge, it is unclear whether more utilities will enter the market now or wait until later this year or until next year to buy in hopes prices may be lower. The Platts NuclearFuel range for the week was $62-$68/lb U3O8. ------------ NRC begins special inspection at Vermont Yankee Washington (Platts)--14Jul2008 NRC began a special inspection July 14 at Vermont Yankee, three days after plant operator Entergy Nuclear reported a leak in one of the east cooling tower cells and reduced the reactor's power from full power. NRC said Vermont Yankee crews found about 60 gallons of water per minute was leaking from a pipe joint in one of the non-safety-related cells. The plant has two cooling towers, each of which has 11 cells. Only one of the 22 cells is safety-related. NRC said the source of the latest leak was from the supply header pipe, which carries about 90,000 gallons/minute of water that feeds into the cells. The water escaped after a support beam to the supply header broke away from a connecting vertical column, NRC said. NRC reported the reactor was around 23% power early July 14. ------------