Fiercer Than the Race for Oil or Natural Gas

Brian Hicks

Updated April 12, 2007

I have to admit something–I don’t know much about nuclear physics. You might not either, but I bet you know what a mushroom cloud looks like. Unfortunately, a filmstrip’s worth of familiarity with nuclear fuel and its possible uses just won’t do in this reinvigorated nuclear century.

What I do know about is international relations, and the geopolitical glow coming from uranium has caught my eye in a new way this week.

Unless you’ve been under a rock (or in a fallout shelter) for the past year and change, you are aware of Iran’s proclamation of its right to be a nuclear power. This week, the government in Tehran happily announced its atomic maturity, or adolescence at least, as it claimed to have initiated operation of 3,000 centrifuges. This boast, up from about 30 previously known centrifuges, has mainly furrowed international eyebrows in disbelief rather than worry.

If these 3,000 are functional, it flies in the face of UN demands and multilateral sanction threats spearheaded by Washington. But Russian officials, who have offered to enrich uranium on Iran’s behalf on Russian soil, are incredulous.

In the words of Russian Foreign Minister Sergei Lavrov:

"We have of course heard the Iranian president’s statement and treat everything related to the Iranian nuclear program with seriousness. But we want to base [our position] not on emotional political gestures but on facts." Lavrov added that Russia has no independent confirmation (from the International Atomic Energy Agency) that practical enrichment has begun.

Iran’s exuberance is indeed emotional, if not farcical. Esfahan provincial television has been airing a pretty little ditty since the weekend, called "Nuclear Song." This atomic anthem is backed by footage of nuclear scientists at work in their hermetic suits, large official demonstrations complete with destruction of Israeli and American flags, and the following lyrics:

"O Iran, O proud Iran, the most capable Iran, your name at the peak of glory. Your scientists have reached new horizons, nuclear know-how, nuclear know-how."

Iranian patriots may be bouncing to a different beat than the doubting Russians, but the whole world is chiming in on nuclear notes.

As pressure persists on the so-called rogue regimes of Iran and North Korea, ostensibly saner nations like China and India have contributed to a twelvefold increase in uranium prices since Y2K. Each of those momentous emerging powers is planning to build 20 nuclear reactors, and they’re inking deals from Australia (with the world’s top reserves) to former Soviet countries like Kazakhstan (which holds the world’s second-largest uranium deposits).

In fact, the Japanese and their sluggish economy seem to be the most vocal bulls on uranium during this nuclear spring. One hundred government officials and businesspeople from the Land of the Rising Sun will soon head to Kazakhstan for intense negotiations with Kazakh counterparts.

Japan’s Kyodo news agency quoted an industry source as saying, "The global race for uranium supplies has become fiercer than that for oil or natural gas."

The visiting firms plan to offer a range of nuclear technology as a sort of barter for those sought-after uranium supplies, in a bid to ramp up the Kazakh contribution from 1% to 33% of Japan’s total uranium imports.

Kazakhstan’s leader, President Nursultan Nazarbayev, said on April 9 that the country needs a nuclear power plant. His reasons are simple, and not so far from Iran’s: increasing export of profitable natural gas rather than using it for domestic electricity production, reducing coal-fired plant dependency in anticipation of more stringent global emissions standards, and showing the country’s "scientific and technical progress."

As the major producers of this commodity become primary consumers, the race for nuclear fuel will only grow tighter and more heated. Russia’s Federal Atomic Energy Agency head, Sergei Kiriyenko, said Wednesday that he did not perceive a need for a "uranium OPEC," though an OPEC-style cartel for natural gas seems to be in the works with Russia at the helm.

"The technology of converting natural uranium into fuel, and the specific character of nuclear power plants whose loading with nuclear fuel must be guaranteed, prefigure the fact that today we are concluding contracts on the enrichment and delivery of enriched uranium or fuel elements until 2018 or 2020. This is a very long-term market and I do not see the need to set up uranium OPECs," Kiriyenko said.

Ahem, isn’t 2018 just eleven years away? We are dealing with energy questions today on a generational scale, and a decade will zip by with all the energy of a charged particle. This market is as radioactive as the commodity itself, with a long way to go in a bull run that will affect power, politics–and of course profit–beyond our lifetimes.



Sam Hopkins


For all the latest international market news and insight, sign up for Orbus Intel FREE by clicking here.


Angel Publishing Investor Club Discord - Chat Now

Brian Hicks Premium