up 85%, page-4

re: up 85% - the age article Probably been posted elsewhere but I find some points interesting. Still no explanation for the huge parcels bought today! I still can't get over the huge parcels bought today.

Uranium stocks run hot as investors bank on China deal


ANALYSIS

URANIUM exploration stocks have gone crazy ahead of Chinese Premier Wen Jiabao's tour of Australia. With investors anticipating his visit will coincide with a bilateral safeguards agreement that will clear the way for first uranium exports to China, local exploration stocks have soared.

Gains such as the 62 per cent leap by Toro Energy yesterday, Encounter Resource's 44 per cent surge and the 24 per cent gain for Uranium Exploration show the market is punting heavily on the safeguards agreement being put in place when Premier Wen is in Canberra on Monday.

China has a stated demand to source up to 20,000 tonnes a year of uranium to fuel the rapid growth of its nuclear power industry, part of its plan to use cleaner energy for its booming but heavily polluting economy.

That alone represents double what Australia is producing from just three mines — Olympic Dam and Beverley in South Australia and the Ranger mine in the Northern Territory. To meet the expected demand from China, the Australian industry will have to get a whole lot bigger.

BHP Billiton's $10 billion expansion planning could match the Chinese demand in one hit. And if some analysts are right, there will be a deal between the Chinese and BHP on long-term uranium supplies from Olympic Dam.

But what the explorers are banking on is a Chinese preference to acquire their uranium needs lower down the value chain; that is by getting in at the exploration level.

Late yesterday they got encouragement on that score, with a Chinese Foreign Ministry official saying the two countries were focused on peaceful nuclear goals and had been working on two agreements — one on peaceful uses of nuclear power and one on uranium exploration and "exploitation".

These people get around. In early October some other Chinese officials were swanning around a uranium conference in Fremantle, telling all the exploration companies present that the value of known uranium deposits had got too high, making exploration for new deposits in joint ventures with them a priority.

As an aside, it is worth noting that it was at the same conference that federal Labor signalled a major shift in its anti-uranium policies.

Shadow resources minister Martin Ferguson said Australia had a responsibility to help China achieve a cleaner energy mix.

He said Australia should go "out of our way to guarantee a strengthening of a nuclear non-proliferation treaty, and also put in place, with countries such as China, bilaterals guaranteeing the peaceful use of Australian uranium for only power opportunities".