The post-Fukushima freeze on new projects is thawing, writes Peter Ker.
A nuclear winter persists across the uranium industry more than two years after the Fukushima disaster, but look closer and there are signs of life from the developed and developing worlds.
The greenest shoots appear to be in China, where the nation's economic planning agency was told this week that Chinese nuclear power production would grow by 20 per cent this year.
China was aggressively growing its nuclear power capacity before the Fukushima tragedy in March 2011, when a deadly tsunami caused a meltdown at a Japanese nuclear plant.
The disaster prompted China to slow the pace of nuclear approvals, and the uranium sector has since eagerly awaited any sign Beijing might revive its ambitious growth plans.
While He Yu - chairman of the China Guangdong Nuclear Power Group - did not announce a full-scale revival of the nuclear building plan when he addressed economic planners this week, he did confirm China would install an extra 3.24 gigawatts of nuclear power this year.
That will take China's nuclear capacity from about 12 gigawatts to just under 16 gigawatts, and the nation expects to have 58 gigawatts of nuclear generation by 2020.
UBS commodities analyst Tom Price said despite the 20 per cent rise being expected, it was still a reminder the sector was far from stagnant.
"The market will get excited by 20 per cent, it's a big number ... expect a lot more to come over the next five to 10 years," he said.
"When the Fukushima disaster happened, people thought China would just stop everything but it turns out they're not going to. The fact is, China is quite determined to diversify away from their massive coal dependency, and nuclear is a screamingly obvious one for them."
The World Nuclear Association believes China has 51 further uranium plants on the drawing board, and approval to build some of those projects is what Australian uranium plays like Paladin Energy and Toro Energy are desperate for.
When marking the first anniversary of Fukushima a year ago, uranium bulls believed the spot price for uranium had reached rock bottom at about $US51 a pound.
But things got worse, and the second anniversary has been marked with the spot price down at $US42.25 a pound.
With 48 of Japan's 50 reactors still closed, Credit Suisse expects demand for uranium to be weak enough to keep the price below $US48 until at least June. What happens after is unclear; the new Japanese government appears keen to restart some reactors but has also vowed to reduce Japan's dependence on nuclear longer term.
Some believe delays in establishing new standards will prevent any Japanese reactor restarts this year, while others like Cameco - the world's third biggest uranium producer - predict Japan will have eight reactors up and running by Christmas.
Mr Price believes other factors are combining to create a tighter uranium market than many people realise; a deal between the US and Russia to convert old nuclear weapons into fuel for civilian nuclear power plants will end this year, meaning close to 10 per cent of the world's nuclear fuel supply will disappear from the market.
Mr Price also pointed to BHP Billiton's decision to defer development of one of the world's biggest new uranium mines at Olympic Dam in South Australia.
"The market is actually tighter than people realise and I think people have been focusing too much on Japan and the risk of facilities being closed."
While China, Japan, India and South Korea are seen as the future drivers of uranium demand, parts of Europe are also keen to buck perceptions the continent has turned its back on nuclear. Those perceptions were built on high-profile decisions by the likes of Germany to abandon nuclear in the aftermath of Fukushima but others such as Britain are keen to increase the amount of nuclear in their power mix to help meet targets for carbon emission reductions.
Britain may install as much as 16 gigawatts of nuclear power by 2025 but process is not easy: a host of British companies have baulked at the cost of building new reactors, while others are lobbying the British government for treasury backing to ensure their projects go ahead.
Those talks continue, but British Energy Minister John Hayes said his government was "determined to make Britain a leading destination for investment in new nuclear".
"I am the most pro-nuclear Energy Minister the UK has had for a generation," he said.
Mr Hayes said Britain's nuclear build could create trade opportunities with Australian miners. "Australia is the world's third-ranking uranium producer and holds almost a quarter of global reserves so it's entirely reasonable to expect that a nuclear renaissance in the UK, and in places like China, would benefit the Australian uranium sector," he said.
His words will offer encouragement to the likes of ASX-listed Toro, which will know by March 31 whether Environment Minister Tony Burke will allow it to build Australia's next uranium mine. If approved, the mine could be operating at Wiluna in Western Australia by 2015, and Toro chief executive Vanessa Guthrie said 2013 shaped as the year the supply and demand equation would turn in favour of the uranium industry.
"Uranium is almost through the bottom of the cycle and we are starting to see some return of interest, even if that's not yet investment in the sector," she said.