By Jonathan Ratner, Vancouver Sun, Financial Post, May 31, 2011
Country to shut down all reactors by 2022
The uranium sector came under some selling pressure on Monday after Germany announced it will shut down all of its nuclear reactors by 2022, reversing a nuclear energy policy put in place in October 2010.
By the close Monday, Cameco Corp. fell 3.32 per cent to $27.36, Paladin Energy Ltd. declined 3.24 per cent $3.29, and Uranium One Inc. dipped 2.63 per cent to $3.70. Denison Mines Corp., which declined earlier in the day, rallied for a gain of 2.6 per cent to $2.35.
Germany's decision comes as Tokyo Electric Power Co. has still not decided how to deal with the Fukushima nuclear power plant site, where radioactive soil pockets have reportedly reached the same level as Chernobyl, and as political pressure continues to mount against nuclear energy.
"Our energy system has to be fundamentally changed, and can be fundamentally changed," German Chancellor Angela Merkel told reporters on Monday. "We want the electricity of the future to be safer and, at the same time, reliable and economical."
Many countries have announced in-depth safety reviews of their nuclear reactors, placing moratoriums on new plants in the near-term.
Despite the share price declines, David A. Talbot, an analyst with Dundee Securities, believes investors in the uranium sector should stay the course. He told clients that the long term fundamentals remain very strong for the sector -despite Germany's decision to opt out. "It should not impact the spot market of which the uranium stocks tend to trade in tandem," Talbot said. "It could impact the stocks in the short term as this news plays with investor perceptions of Germany's importance."
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