News

May 01, 2008

The Sentiment Spring Is Coiled For A Rebound In Uranium

By Our Man in Oz

If anyone in Hollywood is looking for a theme for the next version of Mission Impossible, a potential script could go like this: The world must boost electricity production by 500 per cent to sustain economic growth between now and the year 2100. The good guys, led by Tom Cruise, set about finding solutions. The bad guys, led by grey-cardiganed civil servants carrying plastic lunch boxes, stand in the way waving a secret file marked “carbon tax – the death of coal and oil”. So what does Tom Cruise do? Easy. He turns to the nuclear power industry and says: “build me 6,000 new nuclear reactors”. Then he turns to the mining industry, and says: “dig me one million tonnes of uranium a year”. Hey presto. The world is saved.

If this sounds somewhat improbable - if not just plain silly - then you’ better think again, because those are the numbers wafting around the power industry today that are being seized on by analysts as reason to re-enter the market for uranium stocks. Out front, in his usual provocative style, is the effervescent Australian stockbroker, Warwick Grigor. He argues that the underlying outlook for nuclear power and the market in uranium stocks has “diverged”, creating a value gap waiting to be...