Huge shot in the arm for uranium price
Uranium is having the worst start to a year in a decade.
U3O8 is down more than 25% in 2016 with the UxC broker average price sliding to $25.45 a pound last week. Current levels are the cheapest spot uranium has been since 2005. The long term price, where most uranium business is conducted, has fallen to unprecedented levels below $40 a pound.
Uranium's weakness persists despite strong fundamentals with only reactors already being built – mostly in China – expected to increase the global need for uranium by a fifth from today's levels.
An announcement by the UK government may go far in returning some confidence to the market.
After years of uncertainty, Prime Minister Theresa May gave the go-ahead for a $24 billion nuclear power station at Hinkley Point – Europe's biggest energy project and the UK's first nuclear project in a generation.
French company EDF is building the facility and putting up two-thirds of the funding for the project, which will create more than 25,000 jobs. Jean-Bernard Lévy, EDF CEO said "The decision of the British Government to approve the construction of Hinkley Point C marks the relaunch of nuclear in Europe."
China is investing the remaining $8 billion to build Hinkley Point reports the BBC:
"The Chinese agreed to take a stake in Hinkley and at Sizewell in Suffolk on the understanding that the UK government would approve a Chinese-led and designed project at Bradwell in Essex, which has raised questions over national security."