Next Generation of Nuclear Reactors Could Extend Uranium Bull Market

Nearly 80 percent of the world's operatingenergy. Finland moved forward in building Europe's
commercial reactors were built more than 15 yearsfirst nuclear reactor since 1991 because of worries
ago. The nuclear renaissance, since 2002, has beenabout energy supplies. They depend for 100 percent
driven by the anticipated evolutionary shift from oneof their natural gas supplies from Russia. Many Finns
reactor design to a later generation. Most of theare concerned about rising natural gas prices and
world's nuclear reactors are the second generation.availability of supply. This will be the world debut of
In 1996, Japan became the first country to beginthe EPR (European Pressurized Reactor) which is
using the third generation of reactors. This transitorybeing built by the joint venture of Areva's
third generation could dominate nuclear reactorFramatome and Siemens AG.
designs for the next two to three decades. The oneA second EPR is expected to be operational by 2012.
exception, the Pebble Bed Modular Reactor (PBMR),France is adding more nuclear to its existing
could revolutionize the entire nuclear energy field andinfrastructure by constructing its 1600 MW reactor
accelerate the global demand for uranium.for the power utility Electricite de France in western
Newer, more high-tech designs have been selectedFrance at Flamanville. As we were going to press, the
to launch the Generation IV nuclear reactors as earlyFrench Prime Minister had approved a plan to build
as by 2020. The preponderance of such reactorsthe country's second nuclear plant using third
would not likely arrive until after 2030. Subsequently,generation technology.
our forecasts of a sustained bull market in uranium,By the end of the second decade, China, India,
one which might last through 2015, could result in anPakistan, Iran, Russia, Argentina, Brazil, Bulgaria, Chile
understatement. As nuclear countries convert over toTurkey, the Czech Republic, South Korea, Taiwan
the next generation of reactors, during the comingand South Africa each hope to have built one or
two decades, there should be several significantmore reactors to keep up with electricity growth in
growth spurts, within this super bull uranium cycle oftheir countries. For example, South Korea currently
this sector.has four reactors under construction and a further
Several countries are building new reactors to replaceeight planned by 2015. By then, the country hopes to
their aged fleet. New reactors will have to replacehave boosted its total capacity of nuclear energy
decommissioned ones, said the International Energyproduction to 13,000 MW. Korea's electric company,
Agency. The hope is to maintain nuclear energy'sKEPCO, maintains some of the world's operational
percentage in the overall energy source mix.ratios with its twelve reactors. Russia is constructing
Otherwise, air-polluting coal will fill the gap. Ontario'ssix nuclear plants and hopes to build eight more.
Bruce Power plans to rebuild two nuclear reactors,China, India, Japan, South Korea and Taiwan
which have remained idle for the past decade.combined could account for another 85 to 100 new
Canada's Ontario Power Authority announced plans tonuclear plants over the next two to three decades.
build twelve new plants in place electricity-generatingThere could be many surprises, especially in South
coal plants. More importantly, as many as 20 ofAmerica. During the last uranium bull market, several
Ontario's AECL-designed CANDU reactors may besouthern hemisphere countries had announced great
retired. This opens the door for nuclear reactorexpectations. Brazil hoped to build as many as 30
vendors to replace the CANDU with a thirdnew reactors, Argentina aimed for six, Venezuela for
generation reactor.as many as three, Mexico for between two and ten,
Finland's Teoliisuuden Voima' (TVO) utility companyand Chile, Peru and Colombia for as many as two.
should have its third reactor powered up on OlkiluotoThose are the wild cards, which might benefit from
island in western Finland by 2010. The 1600 MWthe more advanced smaller scale commercial
pressurized water reactor, aptly named Olkiluoto 3,reactors, such as the Pebble Bed Modular Reactor.
will join two reactors built in the 1970s. With theNew engineering designs will spur demand for nuclear
addition of the third, much larger reactor, Finland willenergy as fossil-based energy prices continue to
derive about 30 percent of electricity of nuclearremain high.