The U.S. Senate voted 67-28 to end debate on the New Strategic Arms Reduction Treaty and proceed to a final vote. They have enough support to proceed to a final vote and ensure the two-thirds majority necessary for ratification.
President Barack Obama has a lot at stake in the ratification vote because he made nuclear disarmament a cornerstone of his presidency. Furthermore, he was awarded the Nobel Peace Prize for a speech declaring America’s “moral responsibility” to rid the world of nuclear weapons.
The treaty was signed in April of 2010 by President Obama and Russian President Dmitry Medvedev. It would cut strategic nuclear arsenals by one-third leaving each country with some 1,550 warheads, cut from the current limit of 2,200.
At the surface it seems that Russia has softened its previously stance against allowing U.S. missiles in European countries. After the signing of the Treaty, it also adjusted its stance on Iran and Afghanistan. On the surface it looks good for world peace right? Hmmm….lets take a closer look.
Have you heard of Kazakhstan. Kazakhstan, officially the Republic of Kazakhstan, is a transcontinental country located in Central Asia and Eastern Europe. It is ranked as the nighth largest country in the world, is the world’s largest landlocked country with a territory of 2,727,300 km², which is greater than Western Europe. The country is neighboured Russia, China, Kyrgyzstan, Uzbekistan, Turkmenistan, and also borders on a significant part of the Caspian Sea. It is a former state of the United Soviet Socialist Republic (USSR). It was the USSR’s primary nuclear weapon testing site.
Something else you should know is that Kazakhstan is that over the last few years, from a production perspective, Kazakhstan has aggressively promoted its Uranium mining activities to the point where their mines in 2009 produced over 14,000 tonnes of Uranium, followed by Canada with over 10,100 and Australia with almost 8,000. They are now looking to be the world’s largest exporter of Uranium.
Now let me tie it together for you:
– Russia’s strategy is to focus on energy supply and control as much supply into Europe as possible.
– Kazakhstan is a former Soviet state, still very heavily influenced (or controlled) by the controlling political class in Russia.
– Kazakhstan has aggressively promoted its uranium mining activity to become a world leader, fast tracking projects at fractions of the time that they would be approved in Canada or Australia.
– Kazakhstan is manipulating circumstances to take control of Uranium projects developed by foreigners. (Take a look at Uranium One: UUU and how they tried to arrest company officials and take over the local operations of a Canadian-based exploration company)
– Kazakhstan has more uranium than it knows what to do with and is looking for buyers (most likely China, but also anyone that will pay for it)
Given the above, of course Russia wants the U.S. to sign an agreement to reduce uranium supplies. Meanwhile, Russia works through its puppet state (Kazakhstan) to develop and export as much uranium as possible. It is just another way to take over another energy source. Meanwhile, the U.S., lead by a naive politician is totally oblivious to the consequences, not just on the U.S. economy but also on the geopolitical implications.
Could you imagine a world where you had to get your uranium for our reactors (not to mention weapons) from a Russian puppet state? Forget about $50 per pound pricing. Look more at $100-$200 per pound pricing. Also forget about becoming an innovator in the development and use of clean energy and energy supply security.
I don’t think Barack Obama is thinking past the next election. Where is his 10 year, 25 year, 50 year plan to assure the success of the United States into the future. No wonder Americans are cashing in their greenbacks and buying gold bullion or taking their money offshore.
What do you think?
By the way, if this agreement is approved the 95% grade uranium in the war heads will have to be removed and disposed of, usually by putting it into the fuel supply for nuclear reactors. However, reactors take a 6% concentration, therefore the uranium has to be de-graded. Analysts were predicting a spike in uranium prices by 2013 because of the ending of the previous agreement by which Russia was dismantling their weapons and selling the uranium into the fuel supply. This treaty would in fact be a type of extension of this supply. Also, I wonder how well regulated and secure the uranium stocks are in that part of the world, especially when last year someone in India was found walking around with a case of uranium.
On a positive note, I’m glad that atleast on the surface the politicians are agreeing to reduce the nuclear weapons. We have way more than we need and too much to assure our security.
Peace to all.
Having worked in the Uranium industry and understanding it better than most Canadians, I was surprised to read this morning that Saskatchewan Premier Brad Wall supports a federal private member’s bill sponsore by Saskatchewan Conservative MP Brad Trost.
Allow me to share some background with you so that you may understand my surprise.
The Uranium industry around the world has been protected by national governments for reason’s of environmental, military, economic and political sensitivity. Over the last few years Canada has been the world leader in Uranium production, supplying about 30% of the world’s Uranium supply, followed by Australia and then Kazakhstan. However, over the last three years from a production perspective, Kazakhstan has aggressively promoted its Uranium mining activities to the point where their mines in 2009 produced over 14,000 tonnes of Uranium, followed by Canada with over 10,100 and Australia with almost 8,000.
So, what’s driving Kazakhstan’s rise to the top?…the forecast for Uranium demand and the government’s willingness to allow exploration and mining activities that are much more lax than those in Canada and Australia. The forecasts show that the demand for Uranium, primarily from China and India for nuclear reactor fuel will show a very tight market in 2013. Uranium has moved from being a strategic mineral for military purposes to being a strategic mineral for economic purposes.
If China can’t get cheap energy to power their mills, refineries and factories, then they can’t continue to compete with producers from other countries. That is why China was trying to buy a Canadian Potash producer recently, so they could control the price of fertilizer to make their farms more productive. Otherwise, they can’t produce as much per acre to be able to compete against Canadian farmers. Plus they could sell any surplus to other countries at a much higher price to assure that they can’t compete with Chinese producers. This is a tactic they’ve used in various situations and why they have been able to produce products cheaper in the past.
By the way, Canada is the world’s largest producer of Potash with a 51% share of the market. We are the leader, why would we want to just hand that over to someone else without getting equal benefit in return. Kudos to the government for knowing the value of our Potash and not giving it away at a discount!
So what about Uranium? Although Uranium for fuel is different than Uranium for military uses (6% concentration versus 96% concentration) the danger remains that if anyone secures a supply of Uranium ore they can refine it using basic centrifugal processing. This would allow them to concentrate Uranium to the point where Weapon grade Uranium can be produced. They ofcourse need much more technology to use it for military purposes. This is the concern over what is happening with Iran. Therefore, the military and political sensitivity with Uranium remains in place and should not be ignored.
Let us not forget that Uranium has other uses that are rarely discussed in the media. The most important being medical research, diagnostic and treatment. I myself have benefited both directly and indirectly from the medical applications of Uranium and its by-products and am grateful for it. In this way, Uranium has saved lives.
As for Uranium as an economic tool, this goes back to the shifting of world economic powers. The low cost of Nuclear fuel compared to the alternatives combined with its base load reliability makes it a desirable source of energy for the economic complex. Basically, once you turn on a nuclear reactor it will produce cheap energy for years to come. It will also produce that energy regardless of time of day or weather conditions. Do you see the competitive advantage yet? In addition, it is produced locally, so you don’t have to worry about your natural gas pipeline being shot-off by Russia, as they did to Europe in 2008 or the interruption of shipments over the boarder, such as China has done with Rare Earth Elements (REE) to Japan over the last two months. REE are used by Japan for the manufacture of high-tech vehicles, industrial equipment and products. Without their supply, Japan can’t produce these items, has to shut down plants and therefore can’t export product in return for money. It’s simply modern economic warfare.
This is why China has been aggressively looking to secure resources, especial energy sources. It knows that without control over these production inputs it is still vulnerable to international influces and politics. And China does not want to be accountable to anyone. Potash is just one of the production inputs China would like to secure, Uranium is another, but their are many others. For example, China has invested hundreds of millions of dollars over the last couple of years in specific educational institutions and programs in China. They are looking to transfer as much knowledge as they can so they can replicate it throughout their population and then with their large population use probability to create further knowledge to better compete against other countries. This is the reason I am surprised that Dalton McGuinty is looking at giving $40,000 scholarships to 75 Chinese students every year.
As for Uranium, now that I’ve covered its political and economic sensitivity it should be obvious why we should not have China, or any other country own Uranium mines in Canada. Uranium should remain a strategic mineral as Potash is and we should not treat it any differently.
Although Mr. Wall would like to repair damage to Saskatchewan’s willingness to attract investment, the solution isn’t to make a bad political decision. After all, investing in Canada seems to be a lot easier than investing in other countries. Could you imagine China allowing a Canadian company to own an Uranium mine in China. No way they would let that happen. Now China is saying a Canadian company can’t even own real estate in China unless it is used for its operations (creating local Chinese jobs). Yet, a company owned by Chinese in Canada can buy farms, empty land, all the small businesses they want.
It is time that we as Canadians started thinking strategically and stop giving away our competitive advantage. We have more natural resources than any other country. So, lets leverage them and make sure that we get value in return, value through sustainable cash flow, through sustainable lifestyle, through sustainable living environment, through sustainable economy, but most of all through sustainable values that will allow the Canadian legacy exist well into the future.
Uranium should be treated with as much respect and sensitivity as Potash has been treated.