Uranium price jumps to record 40-year high

The price of uranium has recorded its biggest percentage increase since dealings were first reported almost 40 years ago. The cost of the fuel used in nuclear power plants jumped 19% to $113 a pound at a US auction last week. According to TradeTech, one of a handful of uranium price publishers, the surge from last week's previous record of $95 a pound followed a sealed bid for 100,000 pounds of uranium being sold by Mestena Uranium, a Texan producer. Uranium prices have risen by 57% this year, TradeTech said in its weekly Nuclear Market Review. This week's jump was the biggest percentage rise since industry prices were first reported in 1968.

Demand for uranium is soaring thanks to a renaissance in the nuclear power industry. According to the International Atomic Energy Agency, 168 new nuclear reactors will be built over the next 15 years. There are currently 440, generating around 16% of the world's electricity. China plans to build 40 new reactors and India wants to add eight more to the 15 it has already. Indian scientists said that uranium mining production would double this year while Japan said it was planning to send a delegation to Kazakhstan at the end of April to secure uranium and other energy supplies from the former Soviet republic.

The soaring uranium price also reflects supply constraints. Energy Resources of Australia, which produces around 10% of the world's uranium, said last week that its Ranger mine will see a sharp fall in production because of heavy rainfall. Last year Cameco, the world's biggest uranium producer, said a flood at its giant Cigar Lake mine in Canada would delay first production until 2010, two years later than expected. Cigar Lake was expected to meet around 10% of the world's uranium needs.

- And here it is - U3O8 at $113 per pound. Incredible - uranium has quite easily done that which crude oil has not yet achieved - a price jump above the psychological $100 level. More people are going to sit up and take notice.

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