The rise of the mining stocks contrasts neatly with the fall of the US dollar. In currency terms, the main beneficiaries of the dollar’s decline are the euro, which made a new high at US$1.37 to the dollar, and the British pound, which rose to a 26-year high of US$2.03.
Treasurer Peter Costello says the stronger Aussie dollar is creating “difficulty” for Australian exporters as it makes Aussie goods more expensive overseas. Fair enough. But what problem would you rather have today as the nation’s Treasurer, a declining currency, backed by enormous debts and an unpopular government…or one of the strongest commodity currencies in the world, and billions in corporate tax revenues that come with the resource boom?
More good news for Australian uranium producers comes at the expense of Canadian producer Cameco (NYSE:CCJ). The company said flooding issues would delay production at the world’s largest undeveloped uranium mine at Cigar Lake until 2011. BHP (ASX:BHP), meanwhile, is looking for a backdoor into China’s uranium market. Marius Kloppers’ Melbourne-based behemoth has asked the federal government for permission to export copper-coated uranium to China.
It’s not pure yellowcake, you see. It’s uranium-bearing copper concentrate. The 1.2 million tonnes of copper-concentrate ore exported to China under the BHP plan would yield up 2,500 tonnes of uranium a year for China’s nuclear needs.
Markets and Money