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The Australian Uranium Sector

  1. The Australian Uranium Sector

    Author: Sam Green/Tuesday, February 10, 2015/Categories: Mikes Blog
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    As coal power stations are taken off-line, is uranium poised to become a part of Australia’s domestic energy mix?
    South Australia has just announced an inquiry into the “practical, financial and ethical issues” of adding nuclear to the power mix of the state.
    South Australia has significant amounts of fossil fuel deposits, with the majority of the state’s power currently generated from its vast coal, oil and gas reserves.
    However, South Australia is also home to the world’s biggest Uranium deposits, with over 30% of the world’s proven reserves residing in the state. Additionally, South Australia is also the leading state in terms of power generated by renewable sources, with plenty of renewable capacity added in the state, in recent years.
    In a state with as much fossil fuel as just about anywhere on earth, it is interesting to witness the departure from the traditional coal and gas fired power stations, towards a potentially nuclear future; especially with fossil fuel prices at cyclical lows.
    The surprising announcement from South Australia reflects a growing global trend towards the next generation of nuclear power production. Indeed, the amount of energy produced by Australian uranium rose a massive 17.5% in 2012-13, after a decade of flat-growth in Australian uranium production. It is now responsible for more than one fifth of all energy produced from Australian resources.

    This growth in global uranium consumption is forecast to increase dramatically over the next few years, as modern and safe nuclear technologies expand into developing economies.

    Australia is well placed to capitalise on the expected rise in uranium demand, with more than 30% of the world’s total uranium reserves located here. Despite having significantly more uranium than anywhere on earth, we are currently the just the third largest uranium producer – perhaps indicating the significant additional capacity that could be achieved in the Australian uranium industry over the next few years.

    After significant weakness in much of the commodities sector, the outlook for the uranium sub-sector is beginning to look more and more positive. Especially if domestic demand grows as a result of changes in Australia’s energy policy. Those looking to gain exposure to the Australian uranium space could look at ASX:ERA (Energy Resources of Australia Limited), ASX:AGS (Alliance Resources Limited) or ASX:pDN (Paladin Energy Limited).
    Additionally, ASX:RIO (Rio Tinto) and ASX:BHP (BHP Billiton) are two optionable stocks with significant exposure to the uranium market.
    Additional source: http://www.businessinsider.com.au/a...l-explore-alternative-energy-potential-2015-2

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