Toshiba/Westinghouse Moves to Secure Kazak Uranium Supply

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Researched by Industrial Info Resources (Sugar Land, Texas) -- Japan’s Toshiba (NYSE:TOSBF ) (Tokyo) and its nuclear power company Westinghouse is one of the three entities at the forefront of global competition for the estimated 100 nuclear power projects to be initiated in the next 20 years, worldwide. They will be competing to design and build the nuclear plants against Mitsubishi Heavy Industry with France’s Areva, GE with Hitachi, Russia’s Rosatom and the domestically developed nuclear manufacturing industries of China, India and South Korea.

In a deal estimated to be worth billions of dollars, Toshiba is making a move to secure long term supplies of uranium to back its nuclear power projects by acquiring 22.5% in Kazakhstan’s Kharassan mine. The deal should give Toshiba access to 600 tons of uranium per annum. The Kharassan mine is in the south of the country and is being developed by the state’s Kazatomprom and Japan’s Marubeni, Tokyo Electric Power, Chubu Electric Power and Tohoku Electric Power. Marubeni has a 55% stake in the holding company. Output from the mine is expected to reach 5,000 tons per annum in 2014.

In a network of cross deals Toshiba acquired its stake in the mine from Marubeni (NYSE:MARUY ) (Tokyo) and at the same time agreed to sell a 10% stake in Westinghouse to Kazatomprom for $540 million.

Toshiba is aiming at the U.S., where 25% of new nuclear plants are planned, and Chinese nuclear markets to treble its sales in the nuclear sector by 2015, and reduce its reliance on the semiconductor market which contributes for half of its operating profit. At the end of 2006 Toshiba-Westinghouse won a key contract for nuclear plants in China.

Although the price of uranium has fallen in the past weeks after 18 months of exponential growth the long-term future of the supply market seems secure. Even if it falls back to an average of $100/lb this year some market watchers see a widening supply gap pushing it to $200/lb by 2009. Top price for uranium in 2001 was $10/lb.

Kazakhstan is targeting an increase of production in 2007 to over 6,900 tons over the 2006 total of 5,280 tons. The country is the global No3 uranium miner after Australia and Canada and has the world’s second largest estimated reserves after Australia at 1.5 million tons.

For related news items see May 27, 2005 - Kazakhstan Set for Top Uranium Spot with 275% Increase to 15,000 tons by 2010 NEI Provides Supporting Nuclear Power Scenario and June 1, 2007 – Comeco and Kazatomprom Join Uranium Production Boom.

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