Throwing stones in a glass Dacha: The West’s metal vulnerabilities – by Christopher Ecclestone ( – April 4, 2014)

Christopher Ecclestone of Hallgarten & Company addresses supply issues the West faces with Russia as adversary.

LONDON – Some have accused the EU and U.S. of soft-pedaling on the Crimea/Ukraine issue. But might these economic powers think twice before stirring up too much of a ruckus? The EU is particularly vulnerable to Russia cutting off natural gas exports and the U.S. has to play nice with Russia to keep getting cheap uranium supplies.

According to the US Energy Administration, in 2011 the United States mined nine percent of the uranium consumed by its nuclear power plants. The remainder was imported, principally from Russia (50%), Canada, and Australia. As uranium bulls will ceaselessly inform you the supply situation is tight and if it wasn’t for those pesky Russians the price would be a lot higher.

We usually do not make common cause with the tin-foil-hatted but would beg to agree with the uranium bulls. It is a truism that the unwinding of the Soviet stockpiles have beggared the global uranium mining industry and that the great day will be when an end to this attrition is seen.

The current events might bring this around sooner rather than later. Just as the recent House of Cards series highlighted the somewhat mystical (and downright incorrect) applications of samarium in nuclear energy, it is really with the far better known, and far less prosaic, uranium that the Russians have the U.S. dancing on some rather short marionette strings.

Basically if Russia decides to sit on its stockpiles, slow down supplies, cite inventory errors or whatever, then we would have a Cold War in a hot metal. Frankly, with Putin being a far better Machiavellian than any of his adversaries, it does not require us to tell him that this is the obvious play.

The stockpile selling game was coming to a close anyway and it would be a good moment for him to bring it to a foreshortened end. There is no swing producer and there is no appreciable stockpile (beyond what the uranium ETF, Uranium Participation Corp has stashed away). The price could spike to over $120 per lb in the spot market easily if Russia let its intentions to play this card be known.

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