Japan looks to Kazakhstan for Uranium Supply

The IHT reports that Japan is trying to purchase stakes in uranium mines in Kazakhstan and Russia in order to protect itself from surging uranium prices driven by higher Chinese energy demand. In contrast to the United States, Japan already derives 30% of its power from nuclear energy. But a plan to curb carbon dioxide emissions has Japan planning to increase its reliance on atomic energy to approximately 40%.

Uranium prices are currently at a record $113 a pound, and even without an increase in demand, prices are likely to rise further due to problems with mines in Australia and Canada. A global effort to address greenhouse gas emissions will only exacerbate an annoying supply bottleneck.

As a practical matter, uranium production will never run up against the natural limits that face fossil fuels both because there is plenty in the ground and because uranium is so energy dense. But uranium mines have been floundering for decades because they simply weren't terribly profitable investments if no one in the richest country on earth wanted to buy any.

Now that companies like TXU are considering expanding nuclear power again within the United States, the prospect for higher margins for uranium mines looks good. Take a look at this chart from The UxC Consulting Company, LLC: