Letting off steam

Well, I suppose I didn't need to be any sort of prophet to foresee that the uranium market would crash as a result of what's happening at Fukushima Dai Ichi. So now I'm feeling both poor and despondent. I hold significant (for me) uranium stocks, and I'm supposed to be heading over to the USA to work on some uranium exploration projects. In the meantime, I'm learning heaps about reactors and the nuclear fuel cycle, and I find it fascinating, so that's some consolation.

It is no surprise that the stock market, which seems to be populated largely by ignorant speculators, would react in this way to an incident of any sort in any nuclear power plant anywhere in the world. It is a universal fact that when people lack understanding, they replace knowledge with emotion on sometimes religious scales. The anti-carbon lobby is an excellent example of such ignorance.

But in an attempt to retain some level of optimism, I feel it is important to look at a few fundamentals:

• The first fundamental is that in spite of the scale of the "malfunction" at Fukushima Dai Ichi, the operators appear to be handling the matter extremely well, and radiation levels aren't anywhere near "disaster scale". So this has the potential to show that a serious malfunction at a nuclear plant doesn't have to mean holocaust. Of course it does help that the steam is being blown offshore.

• The most fundamental of the fundamentals in the uranium market are that there are currently 62 new power reactors under construction around the world, and this construction will not be halted because of the current negative sentiment - that you can be sure of. There are a further 158 reactors on order or planned, and 324 proposed. This is in addition to the 443 currently operational reactors (minus a few in Japan), most of which will continue to operate for decades to come. So the demand for uranium is not going to go away. On the contrary, as long as people insist on breeding, populations will need increasing amounts of energy, and there are very few ways of generating the sort of base-load capacity required.

So, if you have some spare cash lying around, may I suggest that you keep a close eye on uranium stocks in the next few weeks. There are already some bargains out there, as share prices continue to be decimated.