How Putin Conquered South Africa

By: Marin Katusa | Mon, Jan 13, 2014
Print Email

In the global war for energy supremacy, Russia has won another victory over the United States.

This time, the battleground has been South Africa, where Russia's state-owned nuclear power company, Rosatom, has just signed an agreement to build eight new reactors. Once all of them are operational, South Africa's nuclear capacity will increase more than sixfold-from 1.8 gigawatts (GW) to 11.4 GW over the next 15 years.

This means that Russia will help develop the entirety of South Africa's nuclear energy sector, including financing and training.

And just as importantly, South Africa will be using Russia's nuclear fuel.

Rosatom has been busy signing these types of deals with other foreign countries as well-Finland, Turkey, Ukraine, even the United Kingdom-which guarantees that Russia will be able to keep a stranglehold on these countries' nuclear industries.

The strategy is clear: Rosatom is aiming to become the world's largest supplier of uranium in the coming years.

Remember what we said about the ongoing "Putinization" of Europe's oil and gas; how Russia is planning to leverage its control over Europe's energy to gain political and economic benefits?

The same thing is happening in uranium, except the stakes are even higher-because Putin is now looking to dominate the global nuclear market.

Russia and the former Soviet nations (colloquially called "the -stans") already control nearly half of the world's uranium supply:

World Production of Uranium

Similarly, they hold more than half of the world's capacity for uranium enrichment, a necessary part of fuel fabrication:

Estimated World Enrichment Capacity

Note that the United States only controls 3% of global uranium supply-and less than 15% of the enrichment capacity, despite the fact that it's the largest consumer of uranium in the world.

While nuclear energy powers one out of every five homes in America, the US currently imports more than 90% of the uranium required for its nuclear reactors.

So what happens when one day Rosatom says "Nyet" to the American utilities? You can be sure that they'll be scrambling to find any source of uranium they can get their hands on.

And they'll pay far more than the current spot price of US$34.50/lb. You should know that the price of uranium accounts for just 3% of the total costs of a nuclear power plant, so whether the utilities pay $100 or even $200 per pound of yellowcake is irrelevant, as long as they can keep the reactors running and the lights on in America.

As the US and other countries scramble to get out from under Putin's heavy thumb, for the right uranium producers outside of Russia's sphere of influence, this will be a bonanza for the history books.

 


You just read an article from the Casey Daily Dispatch, Casey Research's informative daily e-letter. Get the Daily Dispatch in your inbox every day and stay in the loop on the ever-changing energy, gold, and technology sectors, as well as big-picture economic trends. all completely free of charge. Click here to get it now.

 


 

Marin Katusa

Author: Marin Katusa

Marin Katusa
Senior Editor Energy Division
Casey Research, LLC.

Marin Katusa

Marin Katusa, an accomplished investment analyst, is the senior editor of Casey Energy Opportunities, Casey Energy Confidential, and the Casey 50. He left a successful teaching career to pursue analyzing and investing in junior resource companies. In addition, he is a member of the Vancouver Angel Forum where he and his colleagues evaluate early seed investment opportunities. Marin also manages a portfolio of international real estate projects. Using advanced mathematical skills, he has created a diagnostic resource market tool that analyzes and compares hundreds of investment variables. Through his own investments, Marin has established a network of relationships with many of the key players in the junior resource sector in Vancouver. Marin has the connections, the mathematical and analytical acumen to bring the best investment ideas and most promising private placement offerings to Casey Research subscribers.

Information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The information contained herein is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed herein are those of the publisher and are subject to change without notice. The information herein may become outdated and there is no obligation to update any such information. Doug Casey, entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications. Corporate policies are in effect that attempt to avoid potential conflicts of interest, and resolve conflicts of interest that do arise in a timely fashion. No portion of this web site may be extracted or reproduced without permission of the publisher.

Copyright © 2006-2014 Casey Research, LLC.

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

SEARCH





TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/