Fear of nuclear energy can be guessed. Disasters in Japan on March 11, has been withholding from the momentum accelerated nuclear renaissance. Over the past few years, nuclear energy has been promoted by its supporters as an alternative energy source that is clean, efficient, reliable and safe for dirty fossil fuels, and the world agrees.

A wave of new orders from BRIC countries as well as developed nations created a nuclear renaissance. Then over the past nine months, the price of uranium began to climb. Dormant since the 2008 recession, uranium rose from $42 per pound to a 52-week high of $72.65 in February.

The spot price of uranium fell over 25 percent in the days following the earthquake and subsequent tsunami in Japan. Value investors helped the troubled commodity regain ground by buying the plunge. But the question is still on everyone’s minds: What’s going to happen from this point forward?

On Monday, Germany announced it will shut down all of its nuclear reactors by 2022. The new policy is a complete reversal to the proposal to enhance Germany’s nuclear energy established by the government only seven months prior.

German Chancellor Angela Merkel stated to reporters on Monday: “Our energy system has to be fundamentally changed, and can be fundamentally changed …. We want the electricity of the future to be safer and, at the same time, reliable and economical.”

The decision by the German government to end its dependence on nuclear energy has once again riled the uranium market, but I believe the German decision is just creating short-term noise. Once this noise is gone, uranium stocks will once again reflect earnings – and while sales to reactors in Japan and Germany may slump, the world’s other 436 reactors will be as hungry as ever for uranium fuel.

Because as people are recovering from the Japan disaster – and possibly hating nuclear power more than ever – the supply and demand fundamentals of uranium have not changed in a significant way. The bottom line is that even in the wake of the Japanese catastrophe, uranium’s supply crunch lives on.

If we look out over the next eight to 10 years, which is the amount of time it takes a nuclear power plant to become fully operational, the market is still about 400 million pounds short of projected demand. The top 10 producers, which make up almost 90 percent of the uranium market, only produced 110 million pounds of uranium in 2010. In other words, uranium producers need to produce nearly four times the amount just to meet estimated new demand. The new supply will have to come from somewhere, or the price of the existing supply will need to increase to clear the market.

For uranium miners, the market is red hot. For investors, shares of the best uranium mining stocks could represent the best energy investment opportunity in decades.

The World Nuclear Association’s chart below sums up why now is the time to get into uranium-related investments. The world will be using more uranium for years to come, and many great investment opportunities appear in the midst of a supply crunch.

The supply crunch easily has the potential to become even more strained with 63 percent (note this is not the same as the top 10 producers mentioned above) of the current uranium production coming from only 10 mines worldwide. Additionally, the global supply of mined uranium is susceptible to supply shocks if one mine floods, or stops production for other reasons.

The most direct way to profit from the coming growth in nuclear energy and the shortage in uranium is to buy shares in the most productive uranium miners in the world. As I stated over a month ago, the tragedy in Japan and subsequent fear in the market have presented us with the opportunity to invest in several well-managed and fundamentally sound uranium companies. For well-informed investors with the patience to tolerate volatility for a couple of months, I think this could potentially be the single best opportunity to buy and hold uranium stocks.

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Last week the Business section of the Daily Telegraph reported that the Chinese state-owned TV service had claimed that the country’s scientists had achieved a major technical breakthrough in nuclear fuel reprocessing technology. The report stated that the breakthrough allowed for the uranium to be used for 60 times longer than under current conditions, meaning that the impact on price could be quite savage. This report was said to be based on an announcement from the China National Nuclear Corporation that it had developed a new process which would allow spent nuclear fuel to be reused, and it reckoned that China’s current 170,000 tonnes of uranium resources would therefore last for 3,000 years.

It seemed a strange claim to make at a time when China is entering into deals to ensure that it has a hand on adequate production of uranium to meet future requirements. If it is not going to need so much uranium, why bother? But the Chinese are great traders, and traders like to try to tip prices to their advantage. If this is the case, they presumably expected the spot price of uranium to drop sharply on the news, and lead the contract price downwards. This would have enabled them to buy more at a cheap price. At the time, a number of analysts noted that the Chinese were also in talks with French nuclear giant AREVA about a reprocessing technology transfer so a technical breakthrough such as this might increase the pressure on the French.

In the event the spot price rose from US$62.50 per pound to US$66.50 per pound, which makes it look as if the Chinese tactic had imploded. It is never wise to underrate the Chinese, though, so Minews got in touch with Alan Eggers, the Australian uranium entrepreneur who maintains a chain of listening posts around the world and who’s thus always up to date with news about the nuclear power industry. Nowadays he is running ASX-listed Manhattan Minerals Corporation which is exploring for uranium in various parts of Australia. But early in 2007, his previous company, Summit Resources, was taken over by Paladin Energy for A$1.2 billion, so he has plenty of claim to a track record of success in the industry.

Sure enough, Alan produced a report from Beijing News.Net which repeated the Telegraph story but which was published a week earlier. The only difference was that it confirmed just how important uranium is to the future of that huge country. China has 12 nuclear power plants in operation and 25 under construction, so by 2020 it expects to be using 20,000 tonnes of uranium a year, which is quite a step up from its own internal production of 2,400 tonnes. Lin Boqiang of the China Centre for Energy Economics Research put the situation in context when he admitted that recycling of spent nuclear fuel is still at a very early stage.

Alan Eggers canvassed a number of experts and the majority verdict was that the Chinese claim was a load of old rubbish. It relates, according to Edward Sterck, a uranium analyst at the Bank of Montreal, to the use of MOX fuel, which is not new. MOX is a blend of plutonium oxides and uranium, whether pure, reprocessed or depleted, and is being used mainly in the UK and France. “The problems are that this fuel cannot be used in older nuclear power stations and is more expensive than actual uranium”, says Sterck

Mike Smith, senior vice president of UxC, the industry’s leading source of consulting, data services and publications on global nuclear fuel cycle markets reckons that China has been reprocessing uranium for 50 years, as that is how the country made its nuclear weapons. He thinks the announcement from CNNC was simply a progress report on the commercial viability of the technology which is probably still 20 years away. So there you have it. Maybe something was lost in translation, but it has certainly not deterred Mike Smith, another UxC analyst from repeating his forecast that the spot price of uranium will advance quietly this year to around US$70 per pound. Alan Eggers rounds off the debate with his straightforward view that a supply shortfall for uranium looms for 2012/13.

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As day five closed a drill hole into the heart of the area provided the growing rescue team with critical information about the level of methane and other toxic material while an NZ army robot was being prepared to go downstairs and a sophisticated American robot was being flown in.

However, this evening NZ time Pike River Coal Ltd chief executive Peter Whittall said a camera probe into a targeted "fresh air" station not only did not show any evidence of miners but also showed there was damage there from the blast.

Earlier Whittall showed relatives of the miners a video of the Pike River mine portal that recorded the severe methane explosion - a reality hit for some, but an understanding from others who were or had been in the coal mining business.

Driving the now diminishing hope is the fact all miners had respirators that had up to an hour's use that would have allowed those not in the direct line of the explosion to get to one of the refuges which could sustain them for several days.

What is preventing a simple rescue attempt is the high risk of rescues also being imperilled by poisonous gases but more importantly the chance of a second explosion that would end any hope for the trapped miners.

Among those spending time on the surface facilities have been Prime Minister John Key, Energy & Resources Minister Gerry Brownlee, a host of mine rescue specialists from throughout NZ, and from Australia. Non-coal mining rescue groups have also offered assistance.

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Energy & Minerals Australia (ASX: EMA) said today that the sandstone-hosted Ambassador deposit could be producing at an estimated operating cost of $US23 per pound of U₃O₈, net of by-products.

The scoping study viewed two possible production routes - resin in pulp (RIP) of the lignite deposits at Mulga Rocks concurrent with in-situ recovery (ISR) of adjacent sandstone-hosted deposits.

The nameplate production was given as 1,200 tonnes (2.6 million lbs) U308 per annum, being 600 tpa each from RIP and ISR production. Project capital was given as $A260 M ($US259 M) with a maximum negative cash flow of $A165 M ($US164 M).

The internal rate of return was given as 30%.

EMA's managing director Chris Davis said the project was expected to be a long term, high volume, low cost producer of uranium with the flexibility of two production routes.

The Mulga Rocks deposits were discovered about three decades ago by the Japanese utility PNC but the low uranium price and then negative Federal Government policies on uranium mining saw this and many other Australian uranium discoveries dropped or put on ice.

Mulga Rock has the Ambassador, Emperor and Shogun deposits which Davis said collectively comprise one of Australia's largest undeveloped uranium resources.

The project is about 240 kilometres north east of the regional city of Kalgoorlie-Boulder and, despite its remoteness, has access to all required infrastructure and inputs for development, and is in an area with no conflicting land uses.

The modelling used was based on a U₃O₈ price of $US65/lb in Year 1 (2014), increasing to $US75/lb by 2016, and then constant thereafter. The exchange rate was a constant $US/$0.80 which today is out of kilter with the Australian dollar going past parity today against the weakening Greenback.

Principal by-products are nickel, cobalt and rare earth elements that could contribute sales of $US465 M over the life of the Ambassador open pit.

EME said the mining extraction from the Ambassador deposit will involve two distinct operations -- conventional open pit mining of the lignite resources by truck and shovel methods, after in situ recovery of uranium from sandstone mineralisation areas under the open pits.

There would be two separate primary treatment plants and one combined product preparation facility.

The first section of the treatment facilities will be a solvent extraction (SX) plant attached to the acid ISR well fields, and used to extract uranium from sandstone hosted mineralisation.

The second front end treatment facility, utilising agitated-tank, atmospheric acid leach and RIP, has been designed to extract uranium, base metals and rare earth elements from lignite hosted mineralisation mined from the open pit operations.

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