Global drive for nuclear power lifts uranium to record highDavid Robertson, Business Correspondent
An increasing demand for nuclear power pushed the global price of uranium to a new high of $85 per pound yesterday, capping another record week in the commodities sector.
Tin, lead and nickel have also hit record levels in the past three days, to the benefit of London-listed mining companies, which have seen their share prices rise on the market.
The increase in uranium prices comes as countries across the world are seeking to reduce their reliance on oil-and gas-generated electricity.
Nuclear power has returned as a viable option and an estimated 251 new reactors are being designed or planned across the globe.
Each new reactor requires 600 tonnes of uranium to start the generating process and then it requires a further 200 tonnes a year.
This increase in demand has not been matched by an increase in supply because it can take up to a decade to develop and exploit new mines.
As a result, the price of uranium yellowcake, the raw material used in reactors, has rocketed. It has quadrupled in the past two years and rose a further 13 per cent this week to $85 per pound.
Analysts predict that it could reach $100 per pound next week when Cameco, the Canadian uranium miner, reports on the status of its Cigar Lake facility.
Flooding at Cigar Lake, which will add 17 per cent to the world’s uranium supply, threatens to delay the start of production.
The rise in uranium prices has created a rush to develop uranium mines and a number of new companies are raising money to begin operations.
Yesterday, UraMin, the Aim-listed miner, announced that it was intending to raise a further $200 million (£102.4 million) from investors to help finance a mine in Namibia.
The London Metal Exchange was also setting records this week. The price of tin hit a high of $13,950 a tonne on Thursday as traders continue to worry about limited supplies. The price eased slightly yesterday to $13,300.
Nickel hit its high on Wednesday, reaching $40,250, and then matched it again yesterday.
Production difficulties at Xstrata’s lead refinery in Aus-tralia caused the price of the metal to rise this week as it hit new highs in the past two days. It closed yesterday at $1,930.
Even copper, which has slipped 30 per cent since reaching $8,800 a tonne last May, has seen a bounce in price. It rose $345 on Thursday and $175 yesterday, closing at $6,310.
Traders believe that the copper sell-off has reached the end of its run and speculators are returning to the market. Even at $6,310, copper is still more than three times the price it was in 2003.
Shares in London-listed miners rose yesterday as commodity prices surged.
Xstrata was up 73p to £26.45, Rio Tinto rose 42p to £29.07, Anglo American gained 46p to £26.08 and BHP Billiton was up 14p to £11.07.
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