Kepco buys uranium supplier to stabilize fuel source
– By Linton Levy –
Korea, which depends wholly on imports for its uranium needs, will now be able to secure supplies more easily, according to the Korea Electric Power Corporation. The state-funded electric power supplier said yesterday it signed a deal to buy 17 percent of Denison Mines Corp., a Canadian uranium supplier, for $68 million on Thursday. Denison produces around 1,000 tons of uranium annually. Korea imports around 4,000 tons of uranium every year.
The contract, Kepco explained, will give the Korean firm the right to secure 20 percent of the uranium to be produced between 2010 and 2015 by the Canadian company. The right to secure the 20 percent will be maintained unless the portion of the stake at Denison held by Kepco drops below 10 percent, Kepco said. Kepco said it will also participate in the management of Denison through the contract.
Two Denison executives will be designated by Kepco, the Korean firm said. The two companies will also hold executive-level meetings twice a year, it said. Uranium is used to make nuclear-reactor fuel. Analysts expect the demand for the fuel to rise over the next years. Kepco said it also plans to buy one or two uranium mines in Africa this year.