The big question now being asked by investors, institutions, uranium speculators, fuel brokers, uranium miners, industry consultants and utilities is: ‘How high will the price of uranium reach during 2007?’ Growth in the uranium sector continues to depend upon ever more convincing confirmatory evidence of global warming, caused by excessive fossil fuel use, in order to accelerate broad public demand for the expansion of nuclear energy as a replacement source for electricity.

In that context, it was a fitting end to 2006 when Associated Press reported the Ayles Ice Shelf had broken away from Ellesmere Island in Canada’s northernmost shore, where polar bears are reportedly drowning from the lack of ice to rest upon. This 41-square mile block was one of six remaining ice shelves in Canada’s Arctic, some 800 miles from the North Pole. To put this into perspective, the ice chunk was larger than New York City’s Manhattan Island – about the size of 11,000 football fields. By next summer, oil and gas drillers may find the ice shelf interrupting their production and explorations; shippers may need to re-route to avoid collisions.

While this news passed by generally unnoticed, a new record January temperature in Manhattan’s Central Park was widely reported. Global warming closer to home, as opposed near the Arctic Circle, obviously carries more weight. Juxtaposed against December’s bizarre near-hurricane-like winds in the Pacific Northwest and three winter blizzards in Denver within three weeks, cynics still dismissing abrupt climate change should wake up and smell the CO2. (Perhaps some should visit downtown Beijing for a ruder awakening on this subject.)

According to a 2002 report in the Christian Science Monitor newspaper, three key countries – China, India and the United States – collectively plan to build more than 800 coal-fired plants by 2012. These would emit an additional 2.7 billion tons of carbon dioxide into the atmosphere. Ironically, the Kyoto Protocol countries had proposed “reducing” CO2 emissions by a mere 450-plus million tons by 2012. Climate change, global warming and political tomfoolery worldwide should strengthen the case for stronger uranium prices at higher sustainable prices.

Will 2006 be remembered as uranium’s watershed year? If for no other reason, the past year should be marked as the transformation period for uranium mining projects. Those exploration and development uranium companies, which had uneconomic sub-$40 and $50/pound projects, became very economic when uranium began trading north of $60/pound. After spot uranium broke through $70/pound in mid December, and long-term uranium reached $69/pound, those once-questionable uranium miners took on shades of becoming potential cash cows within this decade.

The Year of the Uranium ‘Auction’

“The year 2006 was undeniably the most extraordinary in the history of the uranium market,” wrote TradeTech Chief Executive Gene Clark in the December 31st issue of Nuclear Market Review. “Although there is no open exchange for uranium (in contrast to most other commodities), a new market mechanism evolved with the secondary benefit of providing such transparency: the (so-called) uranium auction.”