China set on nuclear path

Age
12 July 2011, Page: 5,

CHINAS hunger for uranium to underpin the expansion of its nuclear industry has not been curbed by the Fukushima disaster, according to the country's main energy agency. On the same day that China's Hanlong Mining was outed as the $144 million suitor of WA uranium junior Bannerman Resources, National Energy Commission advisory board chairman Zhang Guobao told the Boao Forum for Asia Perth conference his country's nuclear expansion plans were on track.

"It is no longer feasible to continue to rely on fossil fuels developing nuclear power is a choice of must", he told the gathering of Chinese and Australian political and business leaders. He said there were 13 operational nuclear power plants in China with another 28 under construction to take capacity to nearly 40 GWs by 2015. "And we have stayed firm on this plan", he said. Of Japan's Fukushima nuclear crisis, which led many European countries to review their nuclear plans, Mr Zhang said the world "should not stop eating just because of choking".

The bullish note struck by some of China's most senior nuclear officials should bode well for Bannerman, which was set in play yesterday after admitting Hanlong's $144 million proposal. Bannerman Resources described the 61.2¢ a share cash bid as highly conditional and timed to take advantage of weakness in its share price, which it said had been battered by negative sentiment following the Fukushima disaster. But Bannerman has left the door open to further talks because it still needs project finance or a joint venture partner to develop its Etango deposit in Namibia. The target's shares soared 23% to 47.54¢.

Bannerman Resources chairman David Smith said it was understandable that the junior had been targeted. "Bannerman Resources controls one of the largest undeveloped uranium resources in the world and, despite recent events, there is no doubt that nuclear power will continue to play a key role in meeting the world's growing energy needs, as well as alleviating greenhouse gas emissions", he said in a statement.

Rio Tinto chief development officer uranium Andy Lloyd told Boao delegates Fukushima has been a major setback for confidence, particularly in the junior sector. But he was confident on the longer term outlook. "I think we can rely on the price signals of the market to pull those projects through", he said. Rio Tinto has an indirect stake in the Husab project in Namibia, which is close to Etango, being developed by Extract Resources.