2010-08-06 10:33

Beijing - China Guangdong Nuclear Power Holding Corp (CGNPC), one of the three nuclear utilities in China, signed a memorandum of understanding (MOU) with Australian uranium producer Paladin Energy Ltd to explore long-term sales and a possible joint venture, CGNPC told China Daily on Thursday.

Workers lay cables at a nuclear power station in the Guangxi Zhuang autonomous region. [Photo/Provided to China Daily]

"We are also in discussion with Canada and Uzbekistan for a potential uranium supply," Lou Yun, spokesman of CGNPC, said.

Paladin, which owns mines in Africa and projects in Australia, may begin supplying uranium within one or two years after the initial accord with CGNPC, Bloomberg cited the miner's Chief Executive Officer John Borshoff as saying.

The uranium miner also said the MOU will include a possible expansion of joint venture relationships between Paladin and Energy Metals, in which CGNPC holds a 69 percent stake, without providing more details.

Energy Metals has a 54 percent stake in the Bigrlyi uranium project in Australia's Northern Territory. Paladin owns 41 percent of the project.

Meanwhile, Canada-based Cameco Corp, the world's second-largest uranium producer, is "pursuing long-term cooperation opportunities" with CGNPC to supply fuel, the company said earlier. Discussions between the two companies are ongoing, according to Cameco.

CGNPC is only one of two Chinese companies authorized to import uranium and will purchase overseas resources of natural uranium totaling 170,000 tons, General Manager He Yu said earlier this year.

Its Uranium Resource Company is responsible for uranium procurement through either the purchase of uranium or the exploitation of new mines.

CGNPC's nuclear reactor build projects would account for at least 50 percent of China's anticipated growth in nuclear power to 2020.

Industry analysts said two thirds of the country's uranium would depend on overseas supplies.

China's demand for uranium may rise to 20,000 tons a year by 2020, more than one third of the 50,572 tons mined globally last year, as it boosts output to 85 gigawatts, nine times its current capacity, according to the World Nuclear Association.

China currently produces around 750 tons of uranium per year. The demand-supply gap of uranium is expected to exceed 10,000 tons by 2015 and reach nearly 30,000 tons by 2030, according to Yan Qiang, a researcher with Chinese Academy of Geological Sciences.

The nation is likely to double its uranium purchases to around 5,000 metric tons this year to build stockpiles for new reactors, said Thomas Neff, a physicist and uranium industry analyst at the Massachusetts Institute of Technology in Cambridge.

On June 24, China National Nuclear Corporation (CNNC) signed the first long-term contract for natural uranium supply with Cameco to buy more than 10,000 tons over 10 years.

The country's growing demand for the resource is also benefiting companies like Areva, the French nuclear giant which also has access to uranium mines, with an output of around 7,000 metric tons per year, or 20 percent of worldwide production.

The reactor builder is now in an agreement with CGNPC for the supply of natural uranium and enriched uranium for 15 years to its Taishan nuclear projects.

Areva said it is looking forward to benefiting from China's increasing demand for uranium, as the country's nuclear power development accelerates, indicating more imports from overseas.