Uranium Prices Down after Grand Canyon Mining Ban Was Upheld

At Monday’s close, uranium prices were trading slightly lower at $27.45, a decline of 0.18%. After news that the US Supreme Court had effectively banned mining of near the Grand Canyon.

This ban was announced by the Obama administration in 2012, which stipulated a 20-year ban on fresh mining activity, following fears that it could lead to environmental impacts. This was met with a series of legal action from commercial interests.

A manageable and worthwhile risk?

Many people in the uranium and mining sectors hoped for court support to remove the Obama order. The national Mining association (NMA) as well as the American Exploration and Mining Association (AEMA) have disputed this, saying uranium exploration is not a risk to the canyon.

But on Monday they lost the challenge in the ninth cycle of appeals starting from December last year. There’s still a possibility that the Trump administration could still overturn the ban through an executive policy decision.

That said, there is already a uranium mining operation set to be placed about eight kilometres from the edge of the canyon, which existed before the ban. There are talks that protesters will be gathering there this coming Thursday.

But before you think of joining the protest, here are some things you should know.

Firstly, fossil fuel-fired power such as coal, produces more emissions and are more harmful to the environment, and yet one kilogram of uranium produces the same amount of energy as three million kilograms of coal.

And the potential risk of a nuclear reactor actually resulting in widespread contamination of air or water in the United States is considerably small, due to the added barriers and various safety systems in place.

The US Nuclear Regulatory commission goes under vigorous regulatory oversights, and Australia would be no different. The uranium operations currently in Australia already have great oversight.

And the radioactive waste, such as uranium mil tailings and used reactor fuel is sorted into high or low level waste. Radioactive waste that is considered harmful to humans is stored until it can be appropriately disposed of.

You’ll be pleased to know that volume wise, most of the waste associated with nuclear power has fairly low levels of radioactivity. It is really only the used nuclear reactor fuel, which can no longer produce electricity, and forms fuel pallet in long metal tubes called rods.

However, these materials are subject to such specialised regulations that prevents outside contact with us and our environment. This also extends to inactive nuclear plants, through a process could decommissioning. Which is basically a clean up of contaminated radioactivity power plants, structures and mils, as well as the safe removal of radioactive fuel.

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New targets for uranium

In a fast moving and emerging market, uranium is one sector that looks likely for a breakout.

The need for reliable, efficient and clean energy is gaining fast traction in our global economies. With the US Department of Commerce investigating the effects of uranium exports on national security, combined with recent news that Cameco will no longer restart its suspended production in nuclear plants. This could mean spot prices are ready for a significant increase, or so analyst Joe Reagor believes.

On the back of this news and the US government’s own study into uranium imports, Mr Reagor claimed that uranium prices were likely to increase substantially in the near future, saying, ‘We believe the uranium spot price is poised to increase significantly.’

Mr Reagor also commented on the study if uranium imports, saying:

We view this as a significant positive for the U.S. uranium industry and believe the investigation could lead to a recommendation of imposing tariffs.’

But the benefits to the industry may take a little time to become fruitful, as requisite steps and related time frames for processing would most likely not come until a year or more.

And as we know, Australia is highly sensitive when it comes to its bigger commodity producing counterparts, like the US and China. So keep an eye out for that.


Ryan Clarkson-Ledward,
For Money Morning

PS: Discover how you could take advantage of the next big resource rush. Today, Greg Canavan shares how you could capitalise on uranium’s next potentially colossal comeback. To find out more read his free report ‘The catalysts set to spark Uranium’s next Blockbuster Bounce-Back’. Downloadable now.

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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