26 May (NucNet): China National Nuclear Corporation subsidiary CNNC International is eyeing overseas uranium acquisition opportunities to help meet demand that will arise from the expansion of the country’s civilian nuclear power programme, chief executive Wang Ying said at the annual shareholders meeting.
The Beijing-based company, which develops and trades overseas uranium resources, is particularly interested in Kazakhstan, Canada and Australia, which are home to rich resources with promising development opportunities, Ms Wang said.
“For any potential acquisition, timing is very important. If the acquisition is made too early, one may be stuck with a loss-making project for a while,” Ms Wang said. “If the investment is made too late, the profit upside may be missed… quality reserves, manageable risk and promising return prospects are some of the criteria for investment.”
Projects with economic development potential should have at least 30,000 tonnes of uranium resource, cash production cost no higher than US$25 (€22) a pound and total production costs of no more than US$45 a pound, she added.
Ms Wang said the next five years would be “a good window” for acquisitions, as the market is working down the surplus inventory accumulated after Japan’s Fukushima-Daiichi nuclear accident in March 2011. The accident resulted in the shutdown of all 48 commercial reactors in Japan.
Kyushu Electric Power Company’s Sendai-1 reactor is likely to be the first to restart. In March 2015 Japan’s nuclear regulator, the Nuclear Regulation Authority, began a pre-service inspection of Sendai-1, the first such inspection carried out under new laws to make sure reactors meet safety standards introduced following Fukushima-Daiichi.
CNNC International said earlier this month it expected to post a “significant increase in loss” for the first half of 2015, citing poor market sentiment in the uranium market.
On the trading side of its business, Ms Wang said since uranium prices were stuck in a narrow range in the first half of the year, trading volume and profit margins had been lacklustre.
Most of the demand from China will take years to arrive because it takes six or seven years to build a nuclear plant, she said, adding that “mass expansion” would follow the successful commissioning of reactors based on new technology from the West.
Production at CNNC International 37.2 per cent-owned mine in Niger has been suspended since February 2015 due to a shortage of cash and because it needs the uranium price to be much higher than the current level of about US$36 a pound to break even.
In Mongolia, talks are continuing with the government on a mining licence for a uranium project to be 51 percent owned by the government and 49 percent by the company, Ms Wang said.
According to the China Nuclear Industry Association, China will approve six to eight nuclear reactors this year. Another eight reactors will go into commercial operation this year, which would be the biggest annual rise in China’s history.
The Paris-based Nuclear Energy Agency said the total capacity of nuclear stations in China will reach between 40 gigawatts and 58 GW by the end of 2020, up from around 21.4 GW today. Based on preliminary calculations, uranium requirements will amount to between 8,200 tU in 2020, then rise to between 12,300 and 16,200 tU in 2025 and 2030, then increase to 14,400 and 20,500 tU in 2035.
According to the International Atomic Energy Agency, China has 27 reactors in commercial operation with 23 under construction.
