RIL gears up for mega play in nuclear sectorPiyush Pandey, TNN |...

RIL gears up for mega play in nuclear sector
Piyush Pandey, TNN | Dec 23, 2011, 03.55AM IST

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Comments from times of India December 2011

MUMBAI: Reliance Industries' nuclear play just got another boost. Even as Australian mining company UXA Resources, where RIL acquired a 49 % stake in 2007, just announced discoveries of new high grade uranium targets, it has simultaneously strengthened its presence in the nuclear sector by acquiring a minority stake in US-based nuclear design and engineering company, Terra Power LLC.

That's not all. Australia's decision to lift its ban on uranium sales to India is also expected to help UXA Resources find newer ready markets in the country. RIL's acquisition in Terra Power, for an undisclosed sum, was described by a company spokesman as one of its series of investments in the broader energy sector.

" Reliance Industries, through one of its subsidiaries, has made a minority investment in Terra Power LLC, " an RIL spokesperson said. He, however, declined to comment on the size of the deal.

Ambani will join the board of Terra, which includes Microsoft chairman Bill Gates and Silicon Valley venture capitalist Vinod Khosla. RIL shares closed up 1% on BSE at Rs 755 in a stable Mumbai market.

India bans private sector participation in uranium exploration and mining. Nuclear power generation is also reserved for the public sector. While many private players have envisaged interest in getting into nuclear power generation as and when the sector opens up for private participation, RIL is tight lipped about its nuclear power play. Even when Ambani brothers signed the no-compete agreement in June 18, 2005, nuclear power generation was kept out of its purview, which was later scrapped in 2010. This signifies Mukesh Ambani's aspirations in the nuclear power generation space.

"From uranium mining to a stake in nuclear design and engineering firm signifies RIL's dream for a mega play in nuclear power generation. The company wants to be an integrated player. However, RIL will have to wait till the sector is opened up for private participation. Till then RIL is seen to be doing the groundwork to take the first mover advantage," said an energy analyst closely tracking RIL.

Russel Penney, managing director UXA Resources in an investor presentation, recently, highlighted the importance of the JV with RIL, which is exploring uranium deposits in the northern territory. It got encouraging results to enter in the second phase of drilling.

Nuclear energy contributes about 16% of total electricity demand but this is expected to rise as countries try to move away from coal-based power generation.