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To do so would exacerbate increasing concerns labelled by the new acronym EROEI, energy returned on energy invested. Or, as Berry says, “What do I get for what I have to spend?”
Nuclear’s growth further suggests its practicality. Berry said there are 60 reactors under construction, 160 planned and 320 proposed, although he cautioned that the last category hardly implies certainty. But countries like the UK, the United Arab Emirates and Argentina have joined others, like China and India, in adding nuclear energy. “It’s not just an emerging market phenomenon,” Berry emphasized. “This is an industry that’s growing, despite the negative headlines, about 3% per year up to about 2022, according to the World Nuclear Association.
“This means to me that the uranium market is poised to consolidate. I think it’s going to get a lot smaller because you have majors, like AREVA, Cameco and BHP, they’ve mothballed projects because they need $70 or $80 per pound uranium to break even, and we’re sitting here today with $40 per pound.… So the majors are on the sidelines, which has opened up the window for those near-term producers in reliable geo-political jurisdictions.”
Looking at the challenges, he said, “Obviously risk-mitigation is always important. But it is of particular importance today.” He discussed countries “where you can mitigate against resource nationalism, permitting risk, low grades and lack of expertise with uranium production and uranium exploration.” Comparing the world’s top two uranium producers, he asked, “Where would you want to be”—Kazakhstan or Saskatchewan? “And that leads to the Athabasca Basin.”
The region’s advantages? “The highest grades in the world, among the largest reserves, permitting is very straightforward and very well understood, Premier [Brad] Wall is a big proponent of uranium mining and production, and you have a deep history of production up in the Basin.”
That brings him back to an earlier statement. “In the West you’ve got these deflationary forces of debt, deleveraging, slow growth and us trying to find ways to maintain and increase our quality of life. In the East it’s a much different story. You have much lower levels of debt to GDP, you have hope, you have optimism, you have a huge population yearning for a higher quality of life.”
Yet he argues that “no middle class has ever sustained itself or prospered without access to cheap and reliable energy.” That’s why Berry favours energy metals and “uranium in particular.”
Read Chris Berry’s May 26 remarks about green energy technology here.
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