Uranium prices may be in the dumps, but China isn’t taking any chances and is working to secure long-term uranium supplies that will be necessary to power the dozens of nuclear reactors that it is building.
In the latest agreement; China and Pakistan signed a framework to cooperate on uranium exploration and development. This latest agreement, between China National Nuclear Cooperation and Pakistan Atomic Energy Commission, is similar to one signed earlier in the year between CNNC and Saudi Arabia. Under the China/Pakistan agreement, China’s uranium industry will fully employ its technological advantages, its nuclear research institutes, nuclear chemistry industry, aerial remote sensing center and other units in its cooperation with Pakistan, according to World Nuclear News.
In March, CNNC signed a memorandum of understanding with the Saudi Geological Survey regarding bilateral cooperation in uranium and thorium resources. Under the agreement, CNNC is to carry out exploration of nine potential areas in Saudi Arabia over the next two years. Late May, CNNC provided an update on this agreement and said that it had completed the field work phase and identified several target mineral areas for further investigation.
We have heard over and over again that uranium prices will rise, and China’s move to secure long-term uranium supply is a major bullish signal for the market. The country currently has many nuclear power plants under construction and some of these plants will be operational as early as 2018. While, right now, uranium prices are low due to a huge market oversupply, clearly China does not think this will last forever and it is planning ahead by forming partnerships to expand uranium resources.