Uranium Supply Imbalance to Drive M&As on Asian Build

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"The world's atomic-power plants risk running short of fuel within a decade. . ."

International mergers and acquisitions to gain access to uranium mines are set to rise as countries seek to strengthen fuel security to power new nuclear reactors, Nomura International said in a report.

"The key feature of worldwide uranium resource distribution is that a couple of countries own most of the world's uranium resources," Nomura International (HK) Ltd. analyst Ivan Lee said in a report yesterday. "Some countries with a large amount of nuclear power capacity are not endowed with rich uranium resources."

About 200 gigawatts of atomic capacity are planned or under construction globally, and China, India, Russia and South Korea are set to be the main drivers of uranium demand growth, according to the report. Utilities will be forced to compete for supplies from the few countries with substantial reserves, led by Australia, Kazakhstan and Canada, which collectively supply 60% of the world's uranium, Lee said.

Kazakhstan, holding 15% of global reserves, has attracted investments from China, Canada, Russia and France, according to the report.

China is now competing for supplies with the U.S., France and Japan, the three biggest nuclear power generators, which make up over 58% of the world’s uranium demand.

The world's atomic-power plants risk running short of fuel within a decade because uranium suppliers can't build enrichment facilities or recycle Soviet-era warheads fast enough, the World Nuclear Association said in a 2009 report.

About 10% of global fuel demand will be met with supplies generated through a U.S.-Russia weapons agreement ending in 2013, the industry group said. Under the 1993 accord, Russia retrieves enough bomb-grade uranium from melting warheads and blending the metal with lower-level fuel to feed about 30 U.S. plants that can produce 41,250 megawatts of power.

There are 53 atomic plants under construction and 435 operating, according the London-based World Nuclear Association.

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