| According to China's Ministry of Land | | | | April, Gene Clark, CEO of TradeTech LLC |
| Resources, China plans to build up | | | | warned us, "In reality, the U.S. utilities, |
| "sufficient reserves" of uranium and other | | | | which tend to wait longer to contract, may be |
| minerals, in a new five-year government plan. | | | | the ones on the losing end because the |
| The ministry said it would be stockpiling | | | | Chinese and the Indians will contract early. |
| strategic reserves of uranium, copper, | | | | The implication of current group-think is |
| aluminum and other key minerals because of | | | | that the Chinese and Indians are not going to |
| rising demand for those commodities. The | | | | be able to find enough uranium for their new |
| Chinese also wish to avoid supply disruptions | | | | plants. But, they are committing for supplies |
| by hoarding uranium and other minerals, over | | | | way out into the future. When the U.S. |
| the next few years. | | | | utilities come to the market, they're going |
| | | | to look around say, 'Oh blankety- blank, what |
| Until now, you've probably taken for granted | | | | happened? Where's the uranium?' They'll be |
| a steady, reliable source of electricity. A | | | | the ones that sat around. I think that is |
| large part of your dependable energy came | | | | what's going to happen unless things really |
| about because of the nuclear energy generated | | | | change in the way contracting is done in the |
| by the 103 nuclear reactors in 30 states. | | | | United States." |
| Without a steady supply of uranium to power | | | | |
| those nuclear reactors, the U.S. electrical | | | | U.S. utilities have been cautioned, warned |
| transmission network suffers a 20 percent | | | | and advised that the Chinese demand for |
| loss. China's new five-year plan to stockpile | | | | uranium could very well create a serious |
| uranium had better be a Wake-Up Call to U.S. | | | | energy crisis for the U.S. grid. Nuclear |
| utilities. If they missed the import of | | | | reactors help supply the baseload generation |
| China's announcement, we are all going to be | | | | for the U.S. electrical grid. Nuclear power |
| in a heck of lot of trouble before this | | | | plants provide stability to the electricity |
| decade ends. | | | | transmission network. About one-fifth of |
| | | | electrical generation is derived from nuclear |
| Since June 2004, we have warned of supply | | | | power. Nuclear plants are running at more |
| disruptions for uranium. David Miller, who | | | | than 89 percent capacity. U.S. utilities are |
| has since become President and Chief | | | | fiddling around like Nero, who watched Rome |
| Operating Officer of Strathmore Minerals, | | | | burn, hoping that promises of increased |
| argued at the time, "In my opinion, no one | | | | uranium production will stem the dramatic |
| has any extra uranium to sell on the spot | | | | uranium price rise. |
| market. There's just not excess inventory | | | | |
| that people are unloading in the spot | | | | Severe strains in natural gas supplies, |
| market." We interviewed Miller again in | | | | combined with the ongoing uranium supply |
| November 2005, for an article entitled, | | | | squeeze, could very well put U.S. consumers |
| "China Demand for Uranium, World Growth in | | | | on rations for their electricity. Can't |
| Electricity Demand to Drive Uranium Price | | | | happen, you say? Ask the Brits about how |
| Higher." Miller warned us, "China is the | | | | business was conducted in their country, in |
| future wild card... what they are planning | | | | late 1973 and early 1974, during the Arab oil |
| for nuclear is probably the most aggressive | | | | embargo crisis. Or more recently, |
| program in the world." Miller added in his | | | | California's rolling brownouts. |
| explanation, "All the new production is | | | | |
| already factored into the future market for | | | | An electrical energy crisis is in the making, |
| uranium. We're underwater right now without | | | | while U.S. utilities are patiently hoping or |
| building one more nuclear power plant." | | | | praying the price of uranium stop climbing. |
| | | | UxC President Jeff Combs wasn't kidding when |
| In mid April, during an interview with Sprott | | | | he urged U.S. utilities, during our |
| Asset Management Market Strategist Kevin | | | | interview, to "support the expansion of |
| Bambrough, we asked him about the Chinese. He | | | | (uranium) production in the United States." |
| answered, "Why shouldn't they have strategic | | | | And if you don't let your local utility know |
| uranium reserves to supply their nuclear | | | | about the upcoming electrical energy crisis, |
| reactors? It makes sense to have a good | | | | then perhaps it will be your lights they may |
| stockpile of uranium considering the relative | | | | someday be turning out. The irony of ironies: |
| cost of nuclear power versus anything else." | | | | All of those sweet anti-nuclear folks in |
| And now, the Chinese plan to build up a | | | | Vermont, who depend upon nuclear energy for |
| strategic reserve of uranium for their | | | | more than 70 percent of their electricity? |
| aggressive nuclear program. | | | | They'll be the first to suffer the most, if |
| | | | U.S. utilities don't respond to China's |
| In another interview, also published in | | | | five-year plan. |