9 April 2006

FSU Editorial: "New Priorities in the Chinese Energy Sector" by Kevin McKern 04/03/2006

FSU Editorial: "New Priorities in the Chinese Energy Sector" by Kevin McKern 04/03/2006: "Aussie uranium stocks rocketed into bubble territory this week, driven by the Uranium sale agreement between Australia and China. For example, the leader in the sector, Paladin Resources is now trading at $5.19, a big move up from the low of $0.05. Incidentally, the Paladin CEO reported on the weekend that Uranium was so out of favour in the late nineties that the mining rights to the Namibia deposit were purchased for a mere fifteen thousand dollars; the company has a current capitalisation of 2 billion.
China has spent big in Australia on energy; an agreement to buy liquid natural gas from the Gorgon project in Western Australia, which was signed last year, was the biggest commercial deal ever signed and contracts Australia to supply China with a billion dollars worth of gas a year for the next twenty five years.
In all, during 2005, Australian exports to China jumped by more than 20 percent, and with the 72 percent increase in the value of coking coal exports, China displaced the United States as Australia's number two trading partner.
At 385,000 MW (megawatts), the current electric grid of China is second only to the United States. To keep up with demand, China will double its electric-generating capacity every decade until 2020 while it moves away from dependence on Coal.
Apart from the environmental and human costs, simple logistics rule out the use of coal to meet new energy demands. Half of China's railroad capacity is already occupied hauling the one billion tons of coal per year used to produce two thirds of China electricity.
China is building a world class Photovoltaic industry and the current wind energy target calls for six gigawatts of power by 2010 and 30 gigawatts by 2020, a boost that would give China t"

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