Japan firms look to uranium amid nuclear revivalTOKYO, Jan 24 (Reuters) - Japanese firms are boosting investment in uranium sources in Central Asia as a revenue stream, since an expected surge in global demand for nuclear fuel is likely to keep prices at record-high levels.
Sumitomo Corp. (8053.T: Quote, Profile, Research) and Kansai Electric Power Co. (9503.T: Quote, Profile, Research) , Japan's third-largest trading firm and second-ranked utility, agreed on Monday with Kazakhstan's state-run KazAtomProm to jointly develop a uranium deposit in the country.
Japan's fourth largest trader Itochu Corp. (8001.T: Quote, Profile, Research) targets boosting its uranium dealing volumes to between 7,000 and 8,000 tonnes in 2010 from an estimated 4,000 tonnes in 2005, the top executive at the company's nuclear energy group told Reuters.
"We want to take upstream equities in natural uranium production and get one third of our target volumes from upstream by either direct investment or using loans," the Itochu official said, declining to be named.
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Global uranium demand is expected to grow in the next couple of decades, as countries such as China plan to build nuclear power plants to meet booming demand for power.
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Concerns over energy security and goals to cut greenhouse emissions from fossil fuel use are also spurring renewed global interest in building new plants, in an industry tainted by past disasters and the problem of nuclear waste disposal.
Spot uranium prices have risen to $35-$37 per pound this week, surging from around $30 last year, $20 in 2004 and $7 in 2003, industry officials say.
"Spot uranium prices will continue to rise. That is purely because of concern over supply shortage," Itochu's uranium official said.
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Japan will still have to import uranium and wants to avoid competition with China, which has also been rushing for stakes in projects and to secure resources to meet energy demand.
"We need to secure uranium stakes before the competition with China starts over again," the Sumitomo spokesman said.
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