Reader Mail: Uranium Bubbles, Indonesia Supplying Coal to China

Some reader mail. Christina M. writes:

“Bubbles – bubbles – the housing mortgage bubble could indeed be next. Maybe there will be a geothermal bubble later on. But my interest is in the uranium bubble. It is surely such a speculative investment area. For one thing there need be only one notable nuclear mishap (and that is statistically inevitable – over time). And the other thing – there is a world-wide growing wave of popular opinion against the nuclear industry.”

Hmm. We’re not buying your claims, Christina. First, it’s important to distinguish between financial demand for uranium and real, economic demand. Do speculators want to make a buck on rising uranium prices? Of course. That includes junior mining companies as well as punters. But uranium as nuclear fuel is in demand. There’s no bubble there. In fact, there’s a looming supply deficit.

That deficit, though, is as much a product of political stupidity as it is actual uranium scarcity. Australia has plenty of the stuff. There’s an estimated AU$20 billion worth of uranium in Queensland alone. But opponents of uranium do a good job of confusing the issues at stake. Whether Australia should have new uranium mines is different from whether it ought to have a nuclear power industry, which is where you’d be concerned about an accident.

And for the record, there already have been accidents. But most of the world’s nuclear plants have been operating for years, safely, cleanly, and efficiently, without the kind of accidents anti-clean energy types conjure up. There were probably cavemen who were opposed to the use of fire, too.

And as for popular opinion… we’re with Lang Hancock. It’s always wrong.

And this from Doug L.,

Dan, firstly as a retired War Correspondent and retired Journo I wish to congratulate you on your work, good easy reading and a lot of sense even if you do labour the point at times.
Have you or your organisation given a thought to the compounding problem our coal loaders are having with at times over a hundred vessels at anchor waiting to load. The costs must be horrific.
It occurs to me that Indonesia as a coal supplier to China et-al would be a much shorter and quicker trip and would also affect the bottom price for these buyers. What is the price of coal shares over there and do you know of any of them?
All the best.
Doug L.

Thanks Doug. We appreciate the compliment and will work at being less laborious. As for Indonesian coal, we have no idea. Our beat is Aussie stocks. However, you make a good point.

If industrial infrastructure can’t expand enough to boost export volumes for things like coking coal, iron ore, and uranium, then the world doesn’t HAVE to get these things from Australia. There are substitutes.

The world would prefer to get them from Australia. The ore grades from the Pilbara are world-class. The black coal of Queensland is rich in heat content. And the uranium, well you know that story.

But for some reason – and we gather this from Robert Duffield’s book on Lang Hancock – Aussie politicians and even some mining execs have a habit of making Australia’s resources hard to get when the world wants them most.

Dan Denning
Markets and Money

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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Christina Macpherson
Well, Dan Denning, I’m not surprised that you’re “with Lang Hancock”. He was quite a famous guy. For one thing – he brought Ed Teller here – flew over the Pilbara – with their plan to use hydrogen bombs to get out the iron ore. (Luckily – this one didn’t eventuate) Another famous Hancock story was his response when he refused to contribute to the fund for Christine Vos – in her fatal – asbestos-caused cancer – Lang said “Well, someone has to pay the price of progress” Sure – the miners, the aboriginal communities – they pay the price… Read more »
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