Looking for a great deal on radioactive uranium? A online auction site for nuclear power producers has a glowing future.
A new B2B offering for nuclear power producers may seem like a bomb maker's dream come true: Radioactive uranium can now be bought or sold with the click of a computer mouse.
"An (Internet) auction for uranium seems far out, but it's really quite straightforward. It's like any other commodity," said Becky Battle, director of marketing for New York Nuclear, which owns and operates the uranium trading Web site UraniumOnLine.com.
The Internet auction site allows nuclear power plants to purchase the uranium fuel needed to make electricity. But Battle and others in the uranium production industry said it would be nearly impossible for terrorists to acquire the material online.
"There is no additional risk at all as a result of online trading," said Charles Scorer, chief executive officer of Nufcor International Ltd, a London-based uranium production and trading company.
By invitation only
Nufcor, equally owned by South African mining giant AngloGold and South African banking to insurance group FirstRand, bought 120,000 pounds of uranium oxide in UraniumOnLine.com's first Internet auction in July.
"Any physical movement of uranium must be from a licensed producer to a licensed trader or buyer," Scorer said, adding that the international community of uranium traders is relatively small and any new bidders would quickly be recognised as such.
Also, auctions on UraniumOnLine.com are private, and participants must be invited by New York Nuclear.
Uranium is used as nuclear fuel in about 430 power plants worldwide, which supply about 20 percent of the planet's electricity needs, Battle said.
Apples and oranges
"The general public may have a difficult time separating what they think of as defensive (weapons-grade) uranium and commercial uranium," Battle said, "But the content (of nuclear fuel) is very very much different from bomb grade. We are talking apples and oranges here."
Bomb-grade uranium must go through a much more extensive and complex refining and enhancement process than uranium used for nuclear fuel. The process requires sophisticated and generally unavailable enhancement technology closely monitored by government agencies, industry sources said.
"With the deregulation of the electricity industry, the fuel procurement process will be more open," Nufcor's Scorer said. "It's more efficient than the traditional system."
Beyond opening the market to free trading, the online auction provides price transparency for utilities and producers. Traditionally, most power plant operators buy uranium under long-term contracts with producers, with the price per pound kept secret.
A slow start
"Naturally and organically, the market will become more liquid (with time), and people will use more of these online services as (they) develop," Scorer said.
At an online auction on Friday, the third one held on UraniumOnLine.com, an undisclosed buyer picked up 124,160 pounds of uranium for US$10.46 per pound. That compares with the current average market price of US$10.56 per pound for a traditional trade, Battle said.
The auction attracted a "handful" of active bidders and "at least two dozen" more observers who are studying the mechanics of the process for possible future participation, she said.
