China To Set Up Strategic Uranium Reserve

SpaceWar

BEIJING, April 18 (AFP) Apr 18, 2007China, planning a massive expansion of its nuclear power industry, aims to build a strategic uranium reserve in the coming years as global competition for the scarce resource heats up.

Over the next 10 years, China will construct as many as three new nuclear power plants each year, resulting in increased demand for nuclear fuels of up to five times current consumption, the China News Service said.

"Going forward, China will have the greatest growth rate in nuclear power so it makes sense for them to set up a strategic reserve," said Warren Edney, a uranium analyst for ABN Amro in Melbourne.

"With a lot of new nuclear power plants coming on line, they are going to need nuclear fuel, so to get nuclear fuel, you need uranium," he told AFP.

The plans for the reserve -- China's third after its strategic oil and grain stockpiles -- highlight its concern about long-term energy security and how that can affect global supply of essential resources.

With a resurgence of interest in nuclear energy in the face of global warming caused by fossil fuels, China could be facing tough competition on the world market.

"There is a significant increase in exploration for uranium globally by many countries including China, Australia, Canada, the US and in Africa as global demand is rising," Edney said.

"Just last week Japan announced its intention to secure uranium reserves in Kazakhstan."

China's powerful Commission of Science Technology and Industry for National Defence advocated the uranium reserve in its 11th five-year plan for nuclear energy development that spans from 2006 to 2010, the China News Service said.

The announcement of the plan comes as the price of uranium has risen sharply in recent months on the resurgence of interest in nuclear power.

At the end of 2006, only 1.9 percent of China's total energy needs were produced by nuclear power but this is set to increase to 4.0 percent by 2020.

China currently produces between 700 and 800 tonnes of uranium a year but consumes about 1,600 tonnes, ABN Amro's Edney said.

This is expected to grow to about 8,000 tonnes a year by 2020, when China will continue to need to import about half of its uranium needs, he said.

According to the strategic reserve plan, China will focus domestic uranium exploration in the Yili Basin in northwestern China's Xinjiang region and in the Ordos Basin in Inner Mongolia.

China will also seek uranium resources overseas, according to the state-controlled China News Service.

In February, China National Nuclear Corp said it had signed a strategic cooperation agreement with Sinosteel Corp to jointly invest in and explore overseas for uranium resources. Sinosteel is also negotiating a deal to invest in uranium assets in Australia.

In January, Australia and China ratified a nuclear agreement clearing the way for the export of up to 187 million dollars worth of Australian uranium to China annually.

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