Nuclear Reactors Restart Uranium Mines
Commodities / Uranium Dec 03, 2014 - 09:03 AM GMT
By: Metals_Report
http://www.marketoracle.co.uk/Article48470.html
Thomas
Drolet has decades of experience in capitalizing on the movement of
international energy markets. The chief of Drolet & Associates
Energy Services is not sanguine about the long-term potential of
fracking, but in this interview with The Mining Report, he tells us why now is a great time to reinvest in the uranium space.
The Mining Report: It's been a rough couple of years
for uranium prices. Realistically, could news of possible restarts of
nuclear plants in Japan positively impact the price of uranium, even if
it's only psychologically?
Thomas Drolet: The psychology of Japan restarts has been
driving the spot price; perhaps it will start to move the all-important
long-term price, too. The long-term price is the signal that the
utilities are buying. It is paramount to core value investing.
Let's talk about Japan. My observation, after having been there
several times post-Fukushima Daiichi, is that there is a giant tug-o-war
going on. Pulling on one end of the rope is Japanese industry, which is
paying a high price for fossil fuels replacement electricity, and the
current government, which is definitely for bringing the nuclear plants
back on-line. Tugging on the other end of the rope is a profoundly
fearful public. Hanging onto the middle of the rope is Japan's new
nuclear regulatory agency. It will take time for this stronger regulator
to finish a series of mandated safety checks before it can authorize
bringing back some of the mothballed reactors.
Kyushu Electric Power Co. Inc. (9508:TKY) plans to restart two
reactors at Sendai in the middle of Q1/15. This is sending a positive
signal to the whole uranium production and supply space. However, the
inventory of fuel at the Japanese reactors is very high; the utilities
had long-term contracts when they were shut down. And those contracts
generally could not be terminated. The large, existing inventory of fuel
will be gradually eaten up as reactors restart after wending their way
through nuclear regulatory approvals, prefecture approvals, local town
approvals and, finally, national government approval.
TMR: Will the Japanese be building new reactors, as well as bringing back the ones that were mothballed?
TD: The Japanese have announced the intent to start building a
couple of new reactors, but I do not see any real progress yet on the
early-stage design efforts. What I do see is that the major reactor
suppliers from Japan—Mitsubishi Corp. (MSBSHY:OTCPK), Toshiba Corp.
(TOSBF:OTC: 6502:TKY)—are actually doing the opposite; they are
concentrating overseas. They are doing deals in the United States, in
Europe, in Southeast Asia.
Two years ago in the U.S., there were 104 working reactors. Six of
them were stilled for valid local or contractual reasons: i.e., the
argument with a supplier of new heat exchangers for San Onofre took two
units out. And there was significant displeasure in the Northeast with a
couple of reactors, and one in Wisconsin. Anyway, we are down to 98
reactors in the U.S. now.
In the U.S., four new AP1000 reactors, each one delivering 1,200
megawatts, are being built by Toshiba/Westinghouse Electric Co. Toshiba
is the master contractor, supervising Westinghouse and, among others,
Chicago Bridge & Iron Co. N.V. (CBI:NYSE). Until these four reactors
are operating successfully, roughly on schedule and roughly on budget,
the U.S. is not going to be a high-growth area for nuclear power.
Waiting on the sidelines, major utilities like Duke Energy Corp.
(DUK:NYSE), Exelon Corp. (EXC:NYSE) and Entergy Corp. (ETR:NYSE) are in
the very early stages of applying for new reactor builds.
TMR: Given this environment, how do spot prices relate to long-term contracts in the uranium market?
TD: Spot is simply uranium put up by suppliers for short-term
cash needs. The price is almost certain to be taken up further by a
smart utility, or by the enrichers, the firms that enrich the uranium
that goes into the fuel fabrication process and eventually burns in the
reactors. Current activity in the spot market is a signal that a corner
is turning. Uranium fell to ~$30/pound ($30/lb) on the spot market in
the early fall. That is below the average cost of worldwide production
by a good US$10. The price obviously cannot stay there because people
have to make money to stay in business.
Although an important corner has turned, I am not saying that there
is massive upside for all uranium companies as a result of what is
happening on the spot side. There will be a slow and steady climb driven
by major utilities coming in on buying cycles that meet their internal
needs.
TMR: When the long-term prices shoot up, who will benefit?
TD: The uptick will mostly benefit the big producers and the current suppliers, such as Cameco Corp. (CCO:TSX; CCJ:NYSE) and Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT). Juniors such as Ur-Energy Inc. (URE:TSX; URG:NYSE.MKT)
may catch a bit of that wave. Interestingly, Ur-Energy has ramped up
production to about 600,000 pounds (600,000 lbs) this year at its Lost
Creek operation in Wyoming. The company is very transparent. According
to its CEO, the firm's production cash costs are averaging $22–23/lb.
Ur-Energy is selling into the long-term market. It has 5 million pounds
under contract through 2021 at an average price of $50/lb. Targeting the
long-term users is a smart move. And, importantly, Ur-Energy's capital
and production costs are relatively low, because it does solution
mining.
TMR: How does solution mining create cost efficiencies?
TD: In the Athabasca Basin, by counter-example, miners
typically drill vertical mine shafts into a very hard, but high-yielding
uranium-rich rock. However, the capital cost of hard rock mining is
high.
The solution miners, on the other hand, drill both vertical and
horizontal holes to introduce solutions. A solution is injected into the
bore hole and, after it sits for a while, it is pumped out and U3O8
yellowcake is then precipitated out.
TMR: What are the components of the solution?
TD: It depends on the chemistry of the rock. It can be mildly
acidic; it can be mildly basic. The solutions are not toxic by any
industry standards.
TMR: Are Ur-Energy's long-term contracts economic? Is $50/lb going to hold up?
TD: Yes, the $50/lb is tied up until 2021. With an average production cost base of approximately $20–25/lb, that is very
economic. Ur-Energy is solidifying its book for the next six years at a
cost that is roughly half of its average sale price. In short, solution
mining is quick off the mark, it is relatively low capital cost. Smart
juniors, like Ur-Energy, are signing long-term contracts.
TMR: Is Ur-Energy still exploring the Lost Creek region?
TD: It has various properties around the Lost Creek. But, I
understand the managers want to create a steady cash flow before
investing capital in the other areas. When those other areas are
developed, there will be an economy of scale already in place, perhaps
with a precipitating mill and network of pipelines serving multiple
extraction sites.
TMR: Let's look at the Athabasca juniors. Who are you following there?
TD: I am on the Advisory Committee with Lakeland Resources Inc. (LK:TSX.V) and Skyharbour Resources Ltd. (SYH:TSX.V). Lakeland and Skyharbour have agglomerated properties around successful mid-cap developers like Fission Uranium Corp. (FCU:TSX),
and seniors like Denison and Cameco. In my opinion they both have a
high probability of finding high-yielding uranium-bearing rock.
The problem that all hard rock Athabasca juniors share is the time
and money it takes to develop a producing mine. Each junior has to
survive this very difficult market and still raise the required
exploration and production funds. The uranium spot and long-term price
markets will continue to slowly improve. This will enable the juniors
access to capital markets. Right now, most juniors in the Athabasca are
supporting themselves by issuing equity, or associating with capital
groups or getting gobbled by the big guys, the Camecos, the Denisons,
the AREVA SAs (AREVA:EPA) of this world. That has been the way of the
oil and gas junior business, and that will ultimately be the way in the
uranium junior business, as well, in my opinion.
TMR: How is the stock market treating the Athabasca juniors?
TD: The stock prices are down about 30% from the peak of a year ago. Investors exited uranium mining en masse
because Japan did not appear to be coming back. And, not well reported,
China's reactor program temporarily slowed down after Fukushima Daiichi
as well. Now, new Chinese reactor developments are back with a
vengeance. Both the spot and the long-term prices will benefit from
China's immediate and near-term nuclear fuel needs.
In the Middle East, four reactors are being built by South Koreans
for the United Arab Emirates. These will need a reliable fuel stream.
The Russians just signed up for building two reactors, and maybe four
more, in Iran. The Russians have a particularly unique and clever
marketing business strategy—compared to majors like AREVAs and
Westinghouse. They are doing turnkey operations for their customers. The
Russians will design the reactor, build it, and either run it directly
or train the client to operate it. They will supply the fuel and, also,
take it back for disposal.
TMR: Will Russia have to go into the global market for uranium?
TD: Russia will supply the uranium, enrich it and fabricate it
within the boundaries of Russia. Also using the Kazakhstani reserves,
Russia will supply yellowcake for the reactors that it builds, be they
in Pakistan, Iran, Turkey, Indonesia or Bangladesh. Russia is the most
aggressive nuclear reactor exporting nation on the face of the earth at
the moment.
TMR: What kind of creative financing are the uranium juniors using to keep moving ahead in this environment?
TD: Lakeland is backed by a capital group called Zimtu Capital Corp. (ZC:TSX.V).
Zimtu holds preferential positions in a dozen or so companies. It helps
these firms to access other capital sources. Until the share prices
rebound somewhat for the juniors, there is not a lot that the Athabasca
juniors can do other than to make sound investments in new properties,
continue drilling their well positioned properties and potentially
associate with capital suppliers that are willing to take a preferential
position. Otherwise, a junior will fall into the spiral of the dilution
mode. Never good for shareholders.
TMR: Leaving uranium, what are the driving forces affecting the price of oil and gas today?
TD: There are several forces driving these prices. Nation
states such as Venezuela, Saudi Arabia and Iran are taking over the
place of the international integrateds. Nation states with large oil
reserves are attending to their own needs and gradually blowing off the
integrateds.
Second, the revolutionary advance of fracking and horizontal drilling
has taken away a lot of the uncertainty about future supply. There is
indeed a large supply of tight oils and shale gas, with the new
technology to extract it. However, the price is not going to stay down
forever. There is a new and important phenomenon emerging.
We will soon start to run out of shallow, easy-to-access, reasonably
permeable, low decline rate tight oil and shale gas zones. President
Obama has said that fracking and horizontal drilling will provide a
transitional fuel source for the next 50 years. I personally doubt that
that super supply will last that long, simply because the decline rates
are huge and have a long, low tail. Frackers have been able to get their
money back in one to two years, but as production drops, I worry about
the high, never ending, poke-a-new-hole drilling cost syndrome.
TMR: How does the strong dollar affect junior miners in Canada?
TD: The cost of operating a drill rig is paid in Canadian
dollars, which is substantially below the U.S. dollar. That means that
the capital and operating costs for oil and gas companies is denominated
in a currency that is 15% less than the currency tied to the sale of
the product!
TMR: What shale oil and gas firms are poised to do well as the energy environment continues to evolve, as you say?
TD: The big guys: the Chevrons (CVX:NYSE), the Exxon Mobils
(XOM:NYSE), the big integrateds in North America stand to last the
longest in this necessary constant high cost drilling environment.
TMR: Are oil and gas juniors doomed?
TD: Most of the juniors will survive. Eventually, the good
ones will be bought up because that is the way of the world. The little
ones get bought up by the big guys.
TMR: Is now a good time to invest in major electrical utilities?
TD: Yes. A lot of them have been beaten down, because we are
still emerging from a difficult period in the U.S. But as the U.S.
economy picks up steam, the big, well-managed utilities—the Dukes, the
Exelons, the Entergys, the Pacific Gas and Electrics (PCG:NSYE)—are good
places to invest for the long term.
TMR: Thanks for your insights, Thomas.
TD: You are welcome, Peter.
Thomas Drolet
is the principal of Drolet & Associates Energy Services Inc. He has
had a four-decade career in many phases of energy—nuclear, coal,
natural gas, geothermal and distributed generation, with expertise in
commercial aspects, research and development, engineering, operations
and consulting. He earned a bachelor's degree in chemical engineering
from Royal Military College of Canada, a master's of science degree in
nuclear technology/chemical engineering and a DIC from Imperial College,
University of London, England. He spent 26 years with North America's
largest nuclear utility, Ontario Hydro, in various nuclear engineering,
research and operations functions.
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DISCLOSURE:
1) Peter Byrne conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
2) Thomas Drolet: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship (options) with the following companies mentioned in this interview: Lakeland Resources Inc. and Skyharbour Resources Ltd. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
3) The following companies mentioned in the interview are sponsors of Streetwise Reports: Ur-Energy Inc., Fission Uranium Corp. and Zimtu Capital Corp. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.
1) Peter Byrne conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
2) Thomas Drolet: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship (options) with the following companies mentioned in this interview: Lakeland Resources Inc. and Skyharbour Resources Ltd. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
3) The following companies mentioned in the interview are sponsors of Streetwise Reports: Ur-Energy Inc., Fission Uranium Corp. and Zimtu Capital Corp. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.
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U.S. Federal Reserve - The Birth of a Monster
Politics / US Federal Reserve Bank Dec 01, 2014 - 01:35 PM GMT
By: David_Howden
http://www.marketoracle.co.uk/Article48446.html
The
Federal Reserve’s doors have been open for “business” for one hundred
years. In explaining the creation of this money-making machine (pun
intended — the Fed remits nearly $100 bn. in profits each year to
Congress) most people fall into one of two camps.
Those inclined to view the Fed as a helpful institution, fostering
financial stability in a world of error-prone capitalists, explain the
creation of the Fed as a natural and healthy outgrowth of the troubled
National Banking System. How helpful the Fed has been is questionable at
best, and in a recent book edited by Joe Salerno and me — The Fed at One Hundred — various contributors outline many (though by no means all) of the Fed’s shortcomings over the past century.
Others,
mostly those with a skeptical view of the Fed, treat its creation as an
exercise in secretive government meddling (as in G. Edward Griffin’s The Creature from Jekyll Island) or crony capitalism run amok (as in Murray Rothbard’s The Case Against the Fed).
In my own chapter in The Fed at One Hundred I find sympathies with both groups (you can download the chapter pdf here).
The actual creation of the Fed is a tragically beautiful case study in
closed-door Congressional deals and big banking’s ultimate victory over
the American public. Neither of these facts emerged from nowhere,
however. The fateful events that transpired in 1910 on Jekyll Island
were the evolutionary outcome of over fifty years of government meddling
in money. As such, the Fed is a natural (though terribly unfortunate)
outgrowth of an ever more flawed and repressive monetary system.
Before the Fed
Allow me to give a brief reverse biographical sketch of the events leading up to the creation of a monster in 1914.
Unlike many controversial laws and policies of the American
government — such as the Affordable Care Act, the Troubled Asset Relief
Program, or the War on Terror — the Federal Reserve Act passed with very
little public outcry. Also strange for an industry effectively
cartelized, the banking establishment welcomed the Fed with open arms.
What gives?
By the early twentieth century, America’s banking system was in a
shambles. Fractional-reserve banks faced with “runs” (which didn’t have
to be runs with the pandemonium that usually accompanies them, but
rather just banks having insufficient cash to meet daily withdrawal
requests) frequently suspended cash redemptions or issued claims to
“clearinghouse certificates.” These certificates were a money substitute
making use of the whole banking system’s reserves held by large
clearinghouses.
Both of these “solutions” to the common bank run were illegal as they
allowed a bank to redefine the terms of the original deposit contract.
This fact notwithstanding, the US government turned a blind eye as the
alternative (widespread bank failures) was perceived to be far worse.
The creation of the Fed, the ensuing centralization of reserves, and
the creation of a more elastic money supply was welcomed by the
government as a way to eliminate those pesky and illegal (yet permitted)
banking activities of redemption suspensions and the issuance of
clearinghouse certificates. The Fed returned legitimacy to the laws of
the land. That is, it addressed the government’s fear that
non-enforcement of a law would raise broader questions about the general
rule of law.
The Fed provided a quick fix to depositors by reducing cases of
suspensions of their accounts. And the banking industry saw the Fed as a
way to serve clients better without incurring a cost (fewer bank runs)
and at the same time coordinate their activities to expand credit in
unison and maximize their own profits.
In short, the Federal Reserve Act had a solution for everyone.
Taking a central role in this story are the private clearinghouses
which provided for many of the Fed’s roles before 1914. Indeed,
America’s private clearinghouses were viewed as having as many powers as
European central banks of the day, and the creation of the Fed was
really just an effort to make the illegal practices of the
clearinghouses legal by government institutionalization.
Why Did Clearinghouses Have So Much Power?
Throughout the late nineteenth century, clearinghouses used each new
banking crisis to introduce a new type of policy, bringing them ever
closer in appearance to a central bank. I wouldn’t go so far as to say
these are examples of power grabs by the clearinghouses, but rather
rational responses to fundamental problems in a troubled American
banking system.
When bank runs occurred, the clearinghouse certificate came into use,
first in 1857, but confined to the interbank market to economize on
reserves. Transactions could be cleared in specie, but lacking
sufficient reserves, a troubled bank could make use of the certificates.
These certificates were jointly guaranteed by all banks in the
clearinghouse system through their pooled reserves. This joint guarantee
was welcomed by unstable banks with poor reserve positions, and imposed
a cost on more prudently managed banks (as is the case today with
deposit insurance). A prudent bank could complain, but if it wanted to
use a clearinghouse’s services and reap the cost advantages it had to
comply with the reserve-pooling policy.
As the magnitude of the banking crisis intensified, clearinghouses
started permitting banks to issue the certificates directly to the
public (starting with the Panic of 1873) to further stymie reserve
drains. (These issues to the general public amounted to illegal money
substitutes, though they were tolerated, as noted above.)
Fractional-Reserve Free Banking and Bust
The year 1857 is a somewhat strange one for these clearinghouse
certificates to make their first appearance. It was, after all, a full
twenty years into America’s experiment with fractional-reserve free
banking. This banking system was able to function stably, especially
compared to more regulated periods or central banking regimes. However,
the dislocation between deposit and lending activities set in motion a
credit-fueled boom that culminated in the Panic of 1857.
This boom and panic has all the makings of an Austrian business
cycle. Banks overextended themselves to finance the booming industries
during America’s westward advance, primarily the railways. Land
speculation was rampant. As realized profits came in under expectations,
investors got skittish and withdrew money from banks. Troubled banks
turned to the recently established New York Clearing House to promote
stability. Certain rights were voluntarily abrogated in return for a
guarantee on their solvency.
The original sin of the free-banking period was its
fractional-reserve foundation. Without the ability to fund lending
activity with their deposit base, banks never would have financed the
boom to the extent that it became a destabilizing factor. Westward
expansion and investment would still have occurred, though it would have
occurred in a sustainable way funded through equity investments and
loans. (These types of financing were used, though as is the case today,
this occurred less than would be the case given the fractional-reserve
banking system’s essentially cost-free funding source: the deposit
base.)
In conclusion, the Fed was not birthed from nothing in 1913. The
monster was the natural outgrowth of an increasingly troubled banking
system. In searching for the original problem that set in motion the
events culminating in the creation of the Fed, one must draw attention
to the Panic of 1857 as the spark that set in motion ever more
destabilizing policies. The Panic itself is a textbook example of an
Austrian business cycle, caused by the lending activities of
fractional-reserve banks. This original sin of the banking system
concluded with the birth of a monster in 1914: The Federal Reserve.
David Howden is a PhD candidate at the Universidad Rey Juan Carlos, in Madrid, and winner of the Mises Institute's Douglas E. French Prize. Send him mail. See his article archives. Comment on the blog.
© 2014 Copyright Ludwig von Mises - All Rights Reserved Disclaimer: The
above is a matter of opinion provided for general information
purposes only and is not intended as investment advice. Information
and analysis above are derived from sources and utilising methods
believed to be reliable, but we cannot accept responsibility for any
losses you may incur as a result of this analysis. Individuals should
consult with their personal financial advisors.
© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
Putin’s World: Why Russia’s Showdown with the West Will Worsen
Politics / Russia Nov 20, 2014 - 12:22 PM GMT
By: John_Mauldin
http://www.marketoracle.co.uk/Article48286.html
Russia
and its redoubtable president, Vladimir Putin, have been much in the
news lately. The latest flurry came when Putin was taken out behind the
woodshed at the G20 conference in the Philippines last weekend over his
recent moves to inject more Russian troops and arms into Ukraine.
For today’s Outside the Box we have two pieces that deliver
deeper insights into the situation with Russia and Putin. The first is
from my good friend Ian Bremmer, President of the Eurasia Group and
author of Every Nation for Itself: Winners and Losers in a G-Zero World. You probably caught my mention of Ian’s presentation at the institutional
fund manager conference where we both spoke last weekend. He had some
unsettling things to say about Russia; and so when he followed up with
an email to me on Monday, I asked if he’d let me share the section on
Russia with you. Understand, Ian is connected, and so what you’re about to be treated to here is analysis from way inside. (He’ll be presenting at our Strategic Investment Conference again next April, too.)
Then we turn to a piece that my friend Vitaliy Katsenelson published last week in his monthly column in Institutional Investor.
I need to preface this one by mentioning that Vitaliy was born in
Murmansk, Russia, where he lived until age 18, when his family emigrated
to the US. Fast-forward 23 years, and today Vitaliy is Chief Investment
Officer for Investment Management Associates in Denver and author of
the highly successful Active Value Investing: Making Money in Range-Bound Markets and The Little Book of Sideways Markets.
That’s quite a journey, and Vitaliy has some very strong feelings about
the country he left as well as the one he came to. In his intro to
today’s piece he admits,
[This is] one
of the most emotionally taxing things I ever wrote. A few days ago my
wife looked at me and said, “When are you going to be done with it; this
article is bringing you down.” She was right.
But I think you’ll
agree that when Vitaliy recently subjected himself to a 7-day news diet
of nothing but Russian media, the better to comprehend current Russian
attitudes, he resurfaced with some valuable insights.
And I can’t leave our deliberations on all things Russia and Putin without mentioning again Marin Katusa’s new book, The Colder War, which I featured in Outside the Box
two weeks ago. It’s a compelling survey of the history and dynamics of
world energy markets and the role that Putin seeks to play in them.
Geopolitically, the world seems to be a calmer place as we head into
the Christmas season, with the significant and glaring exception of
Russia. And remember, falling oil prices will seriously impact an
already stressed Russian economy.
But before we turn to the
eye-opening if somber notes below, I want to share with you a fabulous
story from my friend Art Cashin, who is one of the world’s great
raconteurs. I make sure to have dinner with Art whenever I’m in New
York. In addition to his wisdom concerning the markets, he simply has
the best stories. The last dinner (also attended by Barry Ritholtz and
Josh Brown) was at an establishment called Sparks, an old New York
watering hole and famous steakhouse not far from Grand Central Station.
Art
shared the following story with us and had us in tears. Back in the
day, the New York Stock Exchange was a mighty interesting place with a
very curious cast of interesting and interlocking personalities. It has
calmed down some over the decades, but the stories … well, let’s just
let Art tell it.
For years, one of the
communal tables at the Luncheon Club would issue a group challenge. They
would all set a target for losing weight by some date a couple of
months out. The one who weighed up furthest from their target had to buy
dinner for the others.
In 1985, the
loser was Maurice (Monk) Meyer of Henderson Brothers. Among the others
were Jack (Jackie D) D’Alessandro, Pat McCarthy, Bill Fitzpatrick, and
Roger Hochstin.
They decided to turn
the event into a sort of a Christmas party and scheduled the dinner for
the week before Christmas. They made reservations at Sparks Steakhouse.
As
the day approached, there was an unexpected development. Mafia kingpin
Paul Castellano was gunned down, along with his driver, on the sidewalk
outside Sparks.
Nevertheless, the show must go on.
When
the fated date arrived, the group decided to meet at the Luncheon Club
bar for some rehearsal cocktails. They rehearsed for a couple of hours
and then headed for Sparks.
As they
arrived, around 7:00, there were some early hints it might be a bumpy
evening. When they walked in, the hostess asked if they had
reservations. “Only about the food,” snapped Pat McCarthy. That was
followed by the maître d’ asking where they’d like to sit, only to hear
Roger say, “In the non-shooting section, please.”
Once
they were seated, they ignored the menu and ordered more cocktails and
several bottles of wine. For the next three hours, they ignored the
pleas of several waiters and the maître d’ to order some food to go
along with the wine and drinks.
In the
meantime, Roger may have been getting bored. He noticed another table
with six Japanese men in their twenties and one older man, who looked
maybe 60.
Somehow, Roger found a
Chinese takeout menu from Chou Lu in his pocket. He put his napkin over
his arm as though he were a waiter and went over to the table of
Japanese men and began reading the menu in a form of broken Chinglish
that would have embarrassed even the producers of the old Charlie Chan
movies. Things like “Pork Flied Lice.”
Ironically,
only the older man spoke English, and he seemed to think it was a
wonderful joke. He told Roger that Roger’s table seemed to be having a
wonderful time and asked if he might join it briefly.
Roger
brought him over and introduced him around. There was a pleasant
exchange for about 15 minutes and then Jackie D asked him where in Japan
he came from. They man replied – “Actually, I’m from Okinawa.” Bill
Fitzpatrick darkened and said, pointedly, “My favorite uncle was killed
on Okinawa by you people during the war.” The man quickly excused
himself.
Pat McCarthy reminded Bill
that he had not had an uncle in the war. Jack turned to Pat and said,
“That doesn’t matter; Bill went through the barrier about two drinks
ago.”
Anyway, the waiter finally
prevailed upon the boys to order entrees by 10:00. Meanwhile, Maurice
was sinking fast. He had come out despite a bad case of the flu, since
he was the designated payer. It quickly became evident that Meyer would
not make it much past 10:30. He called for the check.
As
they were about to help Meyer to his feet, Jackie D noticed that
McCarthy had had his untouched entrée put into a doggie bag. Not wanting
to be outdone, Jackie reached down and put his medium rare petite filet
in his inside jacket pocket without benefit of a doggie bag.
At
the coatrack, Jackie attempted to help Meyer get his overcoat on. In
doing so Jack lifted his own hand high and out. That swept his jacket
off to the side, revealing a shirt dripping with blood from the medium
rare filet in his pocket.
Perhaps recalling Castellano’s recent fate, one woman at a table spotted Jack’s shirt and screamed, “My God! He’s been shot!”
Everybody
in the restaurant hit the deck, including the maître d’ and our
adventurous group. When everyone got back to their feet, the maître d’
told the boys they were never allowed back – collectively or
individually.
In a huff, the boys headed off to the John Barleycorn.
Art can go on all night with stories like that. You really should put them into a book, Art.
You
have a great week. I am off to the gym, where The Beast will continue
to try to whip this poor old body into some similitude of shape.
Your still smiling from all the great stories analyst,
John Mauldin, Editor
Outside the Boxsubscribers@mauldineconomics.com
Outside the Boxsubscribers@mauldineconomics.com
Notes on Russia
By Ian Bremmer
Nov. 17, 2014
Nov. 17, 2014
the russians are taking
every opportunity to escalate an already plenty hostile relationship
with the united states and some selected allies. the g20 summit was
particularly negative on that front, with russian president putin
bringing along some warships to australia, while canadian prime minister
stephen harper led a rope line of western leaders calling putin a
scoundrel and a liar. putin left early, claiming a need to catch up on
sleep and some other business to attend to.
like in ukraine.
i
had a chance to talk with some senior russians last week, including two
advisors to the kremlin. they explained that putin expected his offer
of a ceasefire in southeast ukraine would be sufficient to get the
americans to tolerate a status quo, while bringing the europeans to the
table with some sanctions reductions. that didn’t happen: instead a
coordinated harder line policy stayed in place, while the americans and
germans looked set to put more sanctions in place unless the russians
actively backed down. despite mounting economic pressure on the
europeans, the frozen conflict/long game the kremlin was playing didn’t
look like it was going to succeed.
and so the kremlin moved
backed to escalation, dramatically expanding their direct military
presence in the region – confirmed by nato and the
typically-conservative osce, denied by the russian government – and
announcing plans to build up troops in crimea. they’re preparing both
sides to consolidate their territory, initially through taking the port
city of mariupol...potentially then a land-bridge between eastern
ukraine and crimea and beyond (odessa being the most obvious place). the
most likely path is the kremlin now looking for provocations to “go
further” – they’ve already expressed a level of outrage around the
ukrainian government severing economic ties to the separatist region –
then the fiction of ceasefire is erased and the russians/separatists
take more territory. ultimately, whatever the formalized “governance”
structure, the kremlin is moving towards making crimea and southeast
ukraine a single place.
there’s very little the ukrainians can
do. the ukrainian military will remain badly outgunned, and the local
populations in the region remain fairly anti-kiev, even if they’re
skittish about the notion of russian takeover. we’ll see a pickup in
international calls to provide arms for the ukrainian military, but
they’ll be rejected, most particularly by the united states. at best
we’ll see a step up in intelligence and training support, to little
consequence.
putin’s military efforts are also stepping up
outside ukraine: the “unknown” but clearly russian submarine off sweden,
a russian nuclear armed exercise during an intelligence meeting in
denmark; bomber patrols in the gulf of mexico. they’re all bluster, but a
clear message to america and its allies...and pose a far higher
potential for accidents – one scandanavian airlines flight recently made
an emergency alteration to its flight path when a russian military jet
suddenly appeared in front of it.
the likelihood of moscow
backing down in this environment is near zero. the sanctions aren’t
having a meaningful impact on the russian economy (yet) and the
popularity of the kremlin isn’t taking a hit. the speech from former
soviet general secretary mikhail gorbachev – no fan of putin, but
clearly pointing the finger at the west for russia’s troubles – makes
that clear. and it’s getting harder for the americans to find an out.
german chancellor angela merkel continues to be the best opportunity for
compromise, but her relationship with putin is now only barely
functional (the kremlin advisors i spoke with said this was the single
biggest misstep from putin to date – they believed his bilateral
conversations with her were too aggressive and led merkel to feel
misled; neither believed the relationship could be salvaged near-term).
and so russians are now presuming the sanctions environment will be
there for the long haul, and are thinking about the longer term economic
implications.
i’d now say that’s meaningful before we get to
russia’s 2018 elections: further sanctions causing steep recession
leading to unrest in the regions, which begins to metastasize to the
cities. that would spook russian elites, some of whom could split from
the kremlin. the key early warning indicator would be meaningful
defections of any insiders to the west. but critically, we’re at least a
year or two away from that. by which time ukraine has been economically
devastated, while the strategic shift of russia-china is thoroughly
entrenched.
Putin’s World: Why Russia’s Showdown with the West Will Worsen
By Vitaliy KatsenelsonInstitutional Investor, Nov. 17, 2014
My father, Naum Katsenelson, painted this watercolor, “Dolls Become Humans,” two years after we came to the United States in 1993. This is the only “thematic” picture my father ever painted.
If you look at the picture carefully you’ll see the silhouette
of Lenin in the clouds (representing the past). On the far left there is
a Stalin doll and a line of people going to prison. Across from Stalin
on the right there is a doll of Brezhnev (you’ll recognize him by his
large, distinct eyebrows). On the building on the right there is an
image of Gorbachev. Look carefully at the faces in the foreground
(representing the present and the future): as they get closer to you
they become more humanized – transforming from dolls into humans. The
man in front of the woman draped in the American flag is my father; the
boy with the Star of David on his chest is me.
This was an aspirational picture. In 1993 the Soviet Union fell
apart. Russia’s future looked bright – although it was in chaos, it was
a democracy. The dolls here are an analogy for robots, suggesting
uniformity of thought. As I was composing this I called my father and
asked him if he’d paint the same picture today. He said, “No. Today’s
picture would look very different.”
I spent three months
aggravating over the following article. It was one of the most
emotionally taxing things I ever wrote. A few days ago my wife looked at
me and said, “When are you going to be done with it; this article is
bringing you down.” She was right.
I
grew up hating America. I lived in the Soviet Union and was a child of
the cold war. That hate went away in 1989, though, when the Berlin Wall
fell and the cold war ended. By the time I left Russia in 1991, the year
the Soviet Union collapsed, America was a country that Russians looked
up to and wanted to emulate.
Twenty-three
years later, a new version of cold war is back, though we Americans
haven't realized it yet. But I am getting ahead of myself.
After
Russia invaded Crimea and staged its referendum, I thought Vladimir
Putin's foreign excursions were over. Taking back Crimea violated plenty
of international laws, but let's be honest. Though major powers like
the U.S. and Russia write the international laws, they are not really
expected to abide by those laws if they find them not to be in their
best interests. Those laws are for everyone else. I am not condoning
such behavior, but I can clearly see how Russians could justify taking
Crimea back – after all, it used to belong to Russia.
I
was perplexed by how the Russian people could possibly support and not
be outraged by Russia's invasion of Ukraine. But I live in Denver, and I
read mostly U.S. and European newspapers. I wanted to see what was
going on in Russia and Ukraine from the Russian perspective, so I went
on a seven-day news diet: I watched only Russian TV – Channel One
Russia, the state-owned broadcaster, which I hadn't seen in more than 20
years – and read Pravda, the Russian newspaper whose name means
"Truth." Here is what I learned:
If
Russia did not reclaim Crimea, once the new, illegitimate government
came to power in Ukraine, the Russian navy would have been kicked out
and the U.S. navy would have started using Crimean ports as navy bases.
There are no Russian troops in Ukraine, nor were there ever any there.
If any Russian soldiers were found there (and there were), those
soldiers were on leave. They went to Ukraine to support their Russian
brothers and sisters who are being abused by Ukrainian nationalists.
(They may have borrowed a tank or two, or a highly specialized
Russian-made missile system that is capable of shooting down planes, but
for some reason those details are not mentioned much in the Russian
media.) On November 12, NATO reported that Russian tanks had entered
Ukraine. The Russian government vehemently denied it, blaming NATO for
being anti-Russian.
Malaysia Airlines
Flight MH17 was not downed by Russia or separatists. It was shot down by
an air-to-air missile fired by Ukraine or a NATO plane engaged in
military exercises in Ukraine at the time. The U.S. has the satellite
imagery but is afraid of the truth and chooses not to share it with the
world.
Ukraine was destabilized by the
U.S., which spent $5 billion on this project. As proof, TV news showed a
video of Senator John McCain giving a speech to antigovernment
protesters in Kiev's Maidan Square. It was followed by a video of Vice
President Joe Biden visiting Ukraine during the tumult. I wasn't sure
what his role was, but it was implied that he had something to do with
the unrest.
Speaking of Joe Biden, I
learned that his son just joined the board of Ukraine's largest natural
gas company, which will benefit significantly from a destabilized
Ukraine.
Ukraine is a zoo of a
country, deeply corrupt and overrun by Russian-haters and neo-Nazis
(Banderovtsi – Ukrainian nationalists who were responsible for killing
Russians and Jews during World War II).
Candidates
for the recent parliamentary election in Ukraine included Darth Vader
(not kidding), as well as a gay ex-prostitute who claims to be a working
man's man but lives in a multimillion-dollar mansion.
I
have to confess, it is hard not to develop a lot of self-doubt about
your previously held views when you watch Russian TV for a week. But
then you have to remind yourself that Putin's Russia doesn't have a free
press. The free press that briefly existed after the Soviet Union
collapsed is gone – Putin killed it. The government controls most TV
channels, radio and newspapers. What Russians see on TV, read in print
and listen to on the radio is direct propaganda from the Kremlin.
Before
I go further, let's visit the definition of propaganda with the help of
the Oxford English Dictionary: "The systematic dissemination of
information, especially in a biased or misleading way, in order to
promote a political cause or point of view."
I
always thought of the Internet as an unstoppable democratic force that
would always let the truth slip out through the cracks in even the most
determined wall of propaganda. I was wrong. After watching Russian TV,
you would not want to read the Western press, because you'd be convinced
it was lying. More important, Russian TV is so potent that you would
not even want to watch anything else, because you would be convinced
that you were in possession of indisputable facts.
Russian's
propaganda works by forcing your right brain (the emotional one) to
overpower your left brain (the logical one), while clogging all your
logical filters. Here is an example: Russian TV shows footage of schools
in eastern Ukraine bombed by the Ukrainian army. Anyone's heart would
bleed, seeing these gruesome images. It is impossible not to feel hatred
toward people who would perpetrate such an atrocity on their own
population. It was explained to viewers that the Ukrainian army
continued its offensive despite a cease-fire agreement.
Of
course if you watched Ukrainian TV, you would have seen similar images
of death and despair on the other side. In fact, if you read Ukrainian
newspapers, you will learn that the Ukrainian army is fighting a
well-armed army, not rebels with Molotovs and handguns, but an organized
force fully armed by the Russian army.
What
viewers were not shown was that the cease-fire had been broken before
the fighting resumed. The fact that Putin helped to instigate this war
was never mentioned. Facts are not something Russian TV is concerned
about. As emotional images and a lot of disinformation pump up your
right brain, it overpowers the left, which capitulates and stops
questioning the information presented.
What
I also learned is that you don't have to lie to lie. Let me give you an
example. I could not figure out how the Russian media came up with the
$5 billion that "America spent destabilizing Ukraine." But then I found a
video
of a U.S. undersecretary of State giving an 8.5-minute speech; at the
7.5-minute mark, she said, "Since Ukrainian independence in 1991 … [the
U.S. has] invested more than $5 billion to help Ukraine." The $5 billion
figure was correct. However, it was not given to Ukraine in three
months to destabilize a democratically elected, corrupt pro-Russian
government but over the course of 23 years. Yes, you don't have to lie
to lie; you just have to omit important facts – something Russian TV is
very good at.
Another example of a
right-brain attack on the left brain is "the rise of neo-Nazism in
Ukraine." Most lies are built around kernels of truth, and this one is
no different. Ukraine was home to the Banderovtsi, Ukrainian
nationalists who were responsible for killing tens of thousands of Jews
and Russians during World War II.
Putin
justified the invasion of Crimea by claiming that he was protecting the
Russian population from neo-Nazis. Russian TV creates the impression
that the whole of Ukraine is overrun by Nazis. As my father puts it,
"Ukrainians who lived side by side with Russians did not just become
Nazis overnight."
Though there may be
some neo-Nazis in Ukraine, the current government is liberal and
pro-Western. Svoboda – the party whose members are known for their
neo-Nazi and anti-Semitic rhetoric – did not get even 5 percent of the
votes in the October election, the minimum needed to gain a significant
presence in parliament. Meanwhile the TV goes on showing images of Nazis
killing Russians and Jews during World War II and drawing parallels
between Nazi Germany and Ukraine today.
What
also makes things more difficult in Russia is that, unlike Americans,
who by default don't trust their politicians – yes, even their
presidents – Russians still have the czarist mentality that idolizes its
leaders. Stalin was able to cultivate this to an enormous degree – most
Russians thought of him as a father figure. My father was 20 when
Stalin died in 1953, and he told me that he, like everyone around him,
cried.
I keep thinking about what Lord
Acton said: "Power corrupts, and absolute power corrupts absolutely."
The Putin we scorn today was not always like this; he did a lot of good
things during his first term. The two that stand out the most are
getting rid of the organized crime that was killing Russia and
instituting a pro-business flat tax system. The amount of power Russians
give their presidents, however, will, with time, change the blood flow
to anyone's head. Come to think of it, even Mother Teresa would not have
stood a chance in Russia.
A few weeks
ago Putin turned 62, and thousands of people took to the streets to
celebrate his birthday. (Most Americans, including this one, don't even
know the month of Barack Obama's birthday.)
In
my misspent youth, I took a marketing class at the University of
Colorado. I remember very little from that class except this: For your
message to be remembered, a consumer has to hear it at least six times.
Putin's propaganda folks must have taken the same class, because Russian
citizens get to hear how great their president is at least six times a
day.
We Americans look at Putin and
see an evil KGB guy who roams around the country without a shirt on.
Russians are shown a very different picture. They see a hard-working
president who cares deeply about them. Every news program dedicates at
least one fifth of its airtime to showcasing Putin's greatness, not in
your face but in subtle ways. A typical clip would have him meeting with
a cabinet minister. The minister would give his report, and Putin,
looking very serious indeed, would lecture the minister on what needed
to be done. Putin is always candid, direct and tough with his ministers.
I've
listened to a few of Putin's speeches, and I have to admit that his
oratory skills are excellent, of a J.F.K. or Reagan caliber. He doesn't
give a speech; he talks. His language is accessible and full of zingers.
He is very calm and logical.
Russians
look at the Putin presidency and ask themselves a very pragmatic
question: Am I better off now, with him, than I was before he came into
power? For most the answer is yes. What most Russians don't see is that
oil prices over the past 14 years went from $14 to more than $100 a
barrel. They are completely responsible for the revival of Russia's
one-trick petrochemical economy. In other words, they should consider
why their economy has done better the past decade, and why it may not do
as well going forward. Unless Putin was the one who jump-started
China's insatiable demand for oil and other commodities that drove
prices higher, he has had very little to do with Russia's recent
"prosperity."
I place prosperity in
quotes because if you take oil and gas riches away from Russia (lower
prices can do that with ease), it is in a worse place today than it was
14 years ago. High oil prices have ruined Russia. They have driven its
currency up, making its other products less competitive in international
markets. Also, capital gravitates toward higher returns; thus oil has
sucked capital from other industries, hollowing out the economy. After
the Soviet Union collapsed, Russia had a chance to broaden its economy;
it had one of the most educated workforces in the world. Sadly, it
squandered that opportunity. Name one noncommodity product that is
exported from Russia. There aren't many; I can think only of vodka and
military equipment.
But most Russians
don't look at things that way. For most of them, their lives are better
now: No more lines for toilet paper, and the stores are full of food.
Their personal liberties (such as freedom of speech and freedom of the
press) have been taken away from them, but many have so much trust in
their president that they don't mind, whereas others are simply
complacent.
Today we see three factors
that influence oil prices and are working against Russia: Supply is
going up with U.S. shale drilling; demand growth will likely decline if
the Chinese economy continues to cool; and the dollar is getting
stronger, not because the U.S. doing great but just because the rest of
the world is doing worse. If oil prices continue to decline, this will
expose the true state of the Russian economy.
When
I visited Russia in 2008, I sensed an anti-American sentiment. NATO –
which in Russia is perceived as a predominantly American entity – had
expanded too close to Russian borders. Georgia tried to join NATO, but
Russia put a quick end to that. Russians felt they extended a friendly
hand to the U.S. after 9/11, but in response America was arraying
missiles around its borders. (The U.S. says they are defensive, not
offensive; Russians don't see the distinction. They are probably right.)
The
true colors of this new cold war came to light recently. In August
2008, according to Henry Paulson, the U.S. Treasury secretary at the
time, "top level" Russian officials approached the Chinese during the
Olympics in Beijing and proposed "that together they might sell big
chunks of their GSE (Fannie Mae and Freddie Mac) holdings to force the
U.S. to use its emergency authorities to prop up these companies."
This
incident took place just weeks before the collapse of Lehman Brothers.
The U.S. economy was inches from revisiting the Stone Age. The proposed
Russian-Chinese maneuver could have made such an outcome more likely.
The Federal Reserve would have had to step in and buy Fannie's and
Freddie's debt, and the dollar would have taken a dive, worsening the
plunge in the U.S. economy. Our friend Putin wanted to bring the U.S.
economy down without firing a single shot, just as he annexed Crimea
from Ukraine.
Today anti-American
sentiment is much greater in Russia. European sanctions are seen as
entirely unjustified. Here is why: Crimea had a "democratic referendum,"
and the Ukrainian conflict is believed to be not of Russia's doing but
rather an American attempt to destabilize Russia and bring Ukraine into
NATO. In his annual speech at the Valdai conference last month, Putin
said America had pushed an unwilling Europe into imposing sanctions on
Russia. America is perceived as an imperialistic bully that, because of
its economic and military power, puts its own self-interest above
everyone else's, and international law.
Putin
uses anti-Americanism as a shiny object to detract attention from the
weak Russian economy and other internal problems. In the short run,
sanctions provide a convenient excuse for the weakening Russian economy
and declining ruble. They have boosted Putin's popularity (at least so
far). As the Russian economy gets worse, anti-American sentiment will
only rise.
This new version of the
cold war has little in common with the one I grew up in. There are no
ideological differences, and there is no arms race (at least not yet,
and let's be honest: Today neither country can afford one, especially
Russia). At the core of it, we don't like what Russia is doing to its
neighbors, and Russia doesn't like what we do to the rest of the
(non-EU) world.
The criticisms of U.S.
foreign policy voiced by Putin in his latest Valdai speech are shared
by many Americans: The U.S. is culpable in the unresolved, open-ended
Afghanistan adventure; the Iraq War; the almost-bombing of Syria, which
may have destabilized the region further; and the creation of the
Islamic State, which is in large part a by-product of all of the above.
Yet Putin's abominable Ukrainian excursion and the thousands of lives
lost were never mentioned.
But there
is also something less tangible that is influencing Russia's behavior: a
bruised ego. During the good old Soviet Union days, Russia was a
superpower. It mattered. When it spoke, the world listened. The Russian
people had a great sense of pride in their Rodina (Mother Russia).
Today, if Russia did not have nuclear weapons, we'd pay much less
attention to it than we do. Pick a developing country without oil whose
president you can name. (Okay, we Americans can't name the president of
almost any other country, but you get the point.)
Anti-Americanism
and Putin's popularity will both rise as the Russian economy weakens.
For instance, Putin took his own people hostage when he imposed
sanctions on imports of European food. The impact on Europe will not be
significant (the Russian economy is not very large in comparison to the
European Union), but Russia is very dependent on these imports. In the
U.S. consumers spend about 13 percent of their earnings on food, but in
Russia that number is almost three times larger. Therefore, food
inflation hurts Russians much more. Yet as food inflation spiked, so did
Putin's popularity and anti-Americanism. Even declining oil prices will
be explained as a anti-Russian manipulation by the U.S.
Unfortunately,
the only thing Russia has going for it today is its nuclear weapons.
Russia has started to remind us of its military recently. According to
NATO, the alliance "has conducted over 100 intercepts of Russian
aircraft in 2014 to date, which is about three times more than were
conducted in 2013."
Every article
needs a conclusion, but this one doesn't have one. I am not sure what
this new cold war means for the world. Will Russia start invading other
neighboring countries? Will it test NATO resolve by invading Baltic
countries that are part of NATO? I don't know. Economic instability will
eventually lead to political crises. We have plenty of economic
instability going on around the world.
I'll
leave you with this thought: On March 7, 1936, the German army violated
the Treaty of Versailles and entered into the Rhineland. Here is what
Hitler later said:
"The forty-eight
hours after the march into the Rhineland were the most nerve-racking in
my life. If the French had then marched into the Rhineland, we would
have had to withdraw with our tails between our legs, for the military
resources at our disposal would have been wholly inadequate for even a
moderate resistance."
Those two days determined what Germany would do next – build out its army and start World War II.
Comparing
Putin with Hitler, as one of my Russian friends put it, is "absolutely
abominable" because it diminishes Hitler's atrocities and overstates by a
mile what Putin has accomplished to date. Yet it feels as if we are at a
Putin-of-1936 moment. Will he turn into a Putin of 1939 and invade
other countries? I don't know. But the events of the past nine months
have shown Putin's willingness to defy international law and seize the
advantage on the ground, betting – correctly so far – that the West
won't call his bluff.
As Garry
Kasparov put it, while the West is playing chess, responding tactically
to each turn of events, Putin is playing high-stakes poker. We ignore
Putin at our own peril.
Vitaliy
Katsenelson, CFA, is Chief Investment Officer at Investment Management
Associates in Denver, Colo. To receive Vitaliy’s future articles by
email or read his articles, click here.
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About Mark Skousen — Dr. Mark Skousen is editor of Forecasts & Strategies, Skousen Hedge Fund Trader, Skousen High-Income Alert, Fast Money Alert, and Skousen Investor CAFÉ. A former analyst for the Central Intelligence Agency, and former columnist to Forbes magazine, and author of more than 25 books Dr. Skousen has more than 35 years of financial experience.
http://learnmine.blogspot.com/2013/03/10-tambang-uranium-terbesar-di-dunia.html#axzz3L09MfZ1Y
Beberapa Produsen Uranium terbesar di Dunia
Beberapa Produsen Uranium terbesar di Dunia10 tambang uranium terbesar di dunia memproduksi 29.337 ton uranium (TU), atau menyumbang 55% dari produksi global pada tahun 2010. Statistik yang disediakan oleh World Nuclear Association.
1. McArthur River (Canada) - Areva/Cameco
MacArthur
Sungai terbesar di dunia memiliki tambang uranium bermutu tinggi , memproduksi
7654 ton uranium (TU), atau 14% dari produksi global, pada tahun 2010. Kadar
bijih pada tambang bawah tanah rata-rata lebih dari 10% kandungan uranium,
membuat mereka one hundred times the global average untuk tambang uranium.
Cameco mengoperasikan tambang dan mengendalikan kepemilikan 70%, sedangkan
Areva memiliki 30%.
2. Ranger (Australia) - Energy Resources of Australia Ltd.
Energy
Resources of Australia Ltd. (ERA) telah mengoperasikan tambang Ranger, yang
terletak 260 kilometer sebelah timur dari Darwin, Australia, sejak tahun 1980.
Tambang open-pit diproduksi 3216tU, sekitar 6% dari total dunia, pada tahun
2010. ERA dioperasikan dan 68% dimiliki oleh Rio Tinto.
3. Rossing (Namibia) - Rio Tinto
Dimulai pada
tahun 1976, tambang Rossing di Namibia Namib Desert adalah tambang uranium
terpanjang di dunia berjalan open-pit. Rio Tinto memiliki 69% dari tambang,
yang diekstrak 3077tU tahun 2010.
4. Kraznokamensk (Russia) - ARMZ
Kota
Kraznokamensk didirikan di sekitar tambang uranium Priargunsky lebih dari 40
tahun yang lalu. Cumulative uranium production dari tambang bawah tanah sejak
saat itu telah melampaui 117 000 ton. Pada tahun 2010, produksinya adalah
2920tU. Pengembangan lebih lanjut dari daerah-daerah baru dan program modal
modernisasi saat ini sedang diberlakukan di tambang untuk menjaga volume
produksi naik meskipun kualitas bijih menurun.
5. Arlit (Niger) - Somair:
The Somair
tambang open-pit ini terletak 7 kilometer sebelah barat laut dari Arlit di
Niger. Uranium diekstrak dari deposit sedimen pada kedalaman 50 sampai 70 meter
dan tumpukan tercuci di situs, di tambang open-pit. Produksi di tambang, yang
merupakan anak perusahaan yang sepenuhnya dimiliki oleh AREVA, diperkirakan
akan mencapai 3.000 tu tahun 2012 dan, pada tingkat produksi saat ini, memiliki
kehidupan yang diharapkan dari 13 tahun.
6. Tortkuduk (Kazakhstan) - Kazatomprom/Areva
Dioperasikan
oleh KATCO JV, Site No 2 di tambang uranium Tortkuduk diproduksi 2439tU
menggunakan teknik in-situ leaching pada tahun 2010. KATCO JV adalah set-up
pada tahun 1996 antara Perancis Areva, yang mengontrol 51%, dan perusahaan atom
nasional Kazakhstan, Kazatomprom, yang mengontrol 49% sisanya.
7. Olympic Dam (Australia) - BHP Billiton
7. Olympic Dam (Australia) - BHP Billiton
Olympic Dam
terbesar di Australia dan ditandai oleh a multi-mineral ore body yang
menghasilkan uranium beberapa tembaga, emas dan perak. Operasi bawah tanah
menghasilkan 2330tU, atau sekitar 4% dari produksi uranium dunia, pada tahun
2010.
8. Budenovskoye 2 (Kazakhstan) - Kazatomprom
Karatau LLP
didirikan pada tahun 2005 sebagai anak perusahaan dari Kazatomprom untuk
mengembangkan Site No. 2 dari deposit uranium Bedenovskoye di selatan
Kazakhstan. Menggunakan in-situ pencucian, tambang yang dihasilkan 1708tU pada
tahun 2010 dan memiliki kapasitas desain mencapai 3.000 tu tahun 2015.
9. South Inkai (Kazakhstan) -
Kazatomprom/Uranium One
Beroperasi
di wilayah Suzak Kazakhstan, deposit uranium Inkai Selatan adalah in-situ
pencucian operasi yang dioperasikan oleh gabungan perusahaan-Betpak Dala yang
dimana Uranium One mengontrol bunga 70% dan Kazatomprom mengontrol
keseimbangan. 1701tU diproduksi di tambang pada tahun 2010, sedangkan kapasitas
desain Inkai Selatan adalah 2000tU per tahun.
10. Inkai
(Kazakhstan) - Kazatomprom/Cameco
Joint Venture Inkai (JVI)
mengoperasikan deposit Inkai uranium di Kazakhstan. Cameco memegang bunga 60%
di JVI dan Kazatomprom memegang 40% sisanya. Produksi tambang dimulai pada 2009
dengan menggunakan in-situ teknologi pemulihan dan, pada tahun 2010, 1642tU
diproduksi di blok 1 dan 2. Cameco saat ini sedang mencari persetujuan untuk
memproduksi atas dari 2.3tU per tahun.
Source : The 10 Largest Uranium Mines
More info: http://learnmine.blogspot.com/2013/03/10-tambang-uranium-terbesar-di-dunia.html#ixzz3L09ktxZj
Wow! Ternyata Indonesia Miliki Cadangan Uranium Sebanyak 70.000 Ton!!
Wow! Ternyata Indonesia Miliki Cadangan Uranium 70.000 Ton!!
Uranium adalah suatu unsur
kimia dalam tabel periodik yang memiliki lambang U dan nomor atom 92.
Sebuah logam berat, beracun, berwarna putih keperakan dan radioaktif
alami, uranium termasuk ke actinide series (seri aktinida).
Isotopnya digunakan sebagai bahan bakar reaktor nuklir dan senjata
nuklir. Uranium biasanya terdapat dalam jumlah kecil di bebatuan, tanah,
air, tumbuhan, dan hewan (termasuk manusia).
Badan
Tenaga Nuklir Nasional (Batan) memperkirakan terdapat cadangan 70 ribu
ton Uranium dan 117 ribu ton Thorium yang tersebar di sejumlah lokasi di
Indonesia, yang bisa bermanfaat sebagai energi alternatif di masa
depan!
“Untuk Uranium potensinya dari berbagai
kategori, ada yang dengan kategori terukur, tereka, teridentifikasi dan
kategori hipotesis, sedangkan Thorium baru kategori hipotesis belum
sampai terukur,” kata Direktur Pusat Pengembangan Geologi Nuklir Batan
Agus Sumaryanto di sela peluncuran Peta Radiasi dan Radioaktivitas
Lingkungan di Jakarta.
Sebagian besar cadangan Uranium
kebanyakan berada di Kalimantan Barat, sebagian lagi ada di Papua,
Bangka Belitung dan Sulawesi Barat, sedangkan Thorium kebanyakan di
Babel dan sebagian di Kalbar.
Menarik Perhatian Pihak Asing
Perusahaan dari Amerika Serikat, Rusia,
Prancis dan Cina serta negara-negara besar lainnya telah mengincar
uranium yang demikian potensial di Indonesia.
PT Freeport Indonesia diberitakan menggali, memproduksi dan mengeskpor bahan uranium secara diam-diam tanpa melaporkannya kepada pemerintah (ANTARA, 17 Juli 2011).
Freeport Indonesia, anak usaha Freeport
McMoran, adalah perusahaan tambang yang beroperasi di Papua sejak tahun
1964, dan hanya diizinkan menambang emas, tembaga, dan tidak diizinkan
menambang uranium.
Namun anehnya, DPRD Timika bukannya
mendukung pengusutan dan penyelidikan itu, namun justru meragukan
laporan tersebut dan menganggapnya tak benar. Kalangan DPRD Mimika,
Papua menyatakan tidak yakin PT Freeport Indonesia (PTFI) secara
diam-diam memproduksi uranium, demikian Wakil Ketua I DPRD Mimika,
Pieter Yan Magal di Timika, ibukota Kabupaten Mimika, Rabu.
“Saya berpendapat, hal itu merupakan sesuatu yang tidak mungkin, kami tidak yakin kalau Freeport juga memproduksi uranium.Itu hanya dugaan yang tidak mendasar dan tidak punya bukti kredibel,” katanya. (sumber antara). Dengan tak didukungnya suatu penelitian mendalam oleh DPRD justru menimbulkan pertanyaan, ada permainankah dibalik ini semua?
Uraninite, also known as pitchblende, is the most common ore mined to extract uranium. (wikimedia)
Oleh sebab itu, pemerintah harus
hati-hati memberikan izin tambang. Untuk mengolah uranium dari
kandungan bumi Nusantara, pemerintah jangan sampai gegabah ketika
merencanakan untuk menggali dan mengelola sumber energi tersebut, dan
biasanya diserahkan kepada investor.
Di bukit desa Takandeang, Kecamatan
Tapalang, Kabupaten Mamuju, Sulawesi Barat, misalnya terdapat potensi
mineral radio aktif antara 2.000 dan 3.000 nsw per jam.
Sedangkan pulau Sumatera, Jawa,
Kalimantan, dan Papua memiliki kandungan uranium yang jumlahnya cukup
menggantikan bahan minyak dan gas yang kian menipis.
Kajian terakhir dilakukan di Mamuju,
Sulbar, dimana deteksi pendahuluan menyebut kadar Uranium di lokasi
tersebut berkisar antara 100-1.500 ppm (part per milion) dan Thorium
antara 400-1.800 ppm.
Radio Aktif Tertinggi di Indonesia Namun Tak Berbahaya
Badan Pengawas Tenaga Nuklir (Bapeten)
telah melakukan penelitian atas kandungan uranium di Kabupaten Mamuju
seperti di desa Takandeang, Kecamatan Tapalang, juga di desa Belang
Belang, Kecamatan Kalukku, sekitar 30 kilometer dari kota Mamuju dan di
Kecamatan Tobadak sekitar 100 kilometer dari kota Mamuju.
Berdasarkan hasil penelitian tambang di
Mamuju, potensi uranium yang ditemukan dianggap tidak berbahaya. Sifat
uranium itu hanya sebagai bahan baku untuk membangkitkan tenaga nuklir.
Sehingga ia meminta Bepeten segera meneliti titik potensi kandungan
uranium di Kecamatan Kalukku dan Kecamatan Tobadak itu.
Deputi Bidang Pengkajian Keselamatan
Nuklir Bapeten Dr Khoirul Huda mengatakan, Bepeten sementara sedang
melakukan penelitian potensi uranium di Mamuju yang diperkirakan
memiliki kandungan uranium sangat tinggi sehingga dilakukan penelitian
lebih mendalam.
“Hasil penelitian yang telah kami lakukan
menyimpulkan Mamuju adalah daerah tertinggi radio aktifnya di
Indonesia. Ini menunjukan ada potensi uranium di daerah Mamuju,”
ujarnya.
Provinsi Sulawesi Barat
Ia mengatakan, potensi paling tinggi di
Mamuju ditemukan di wilayah bukit Desa Takandeang, Kecamatan Tapalang,
sekitar 40 kilometer dari Kota Mamuju, tinggi radioaktivitas di desa
tersebut berkisar antara 2.000-3.000 nsw per jam.
Ia mengingatkan agar masyarakat tidak
perlu khawatir dengan kondisi tersebut, karena ada beberapa pendekatan
yang akan dilakukan dengan melakukan koordinasi dengan pemerintah daerah
sebagai solusi yang harus ditindaklanjuti.
Pemerintah daerah harus membuat
perencanaan infrastruktur yang memungkinkan agar bisa menghindari
radioaktif yang tinggi. Umumnya jika radioaktif tinggi maka berpotensi
adanya kandungan uranium. Ini juga menandakan pasti ada sesuatu
kandungan yang berharga di dalamnya,” katanya.
Menteri Negara Riset dan Teknologi
(Menristek) Gusti Muhammad Hatta, MS dan Kepala Badan Tenaga Nuklir
Nasional Prof. Dr. Djarot S Wisnubroto mengunjungi Sintang Kalimantan
Barat, pada awal Mei 2013 lalu guna meninjau potensi uranium di
Kabupaten Melawi Kalimantan Barat.
Kami mengajak kepala BATAN untuk melihat
langsung potensi uranium di Kabupaten Melawi,” kata Menristek. Uranium
merupakan bahan penting untuk membangun PLTN, dan pihaknya melihat
langsung perkembangan uranium di Melawi, di Belitung sudah lama
sedangkan di Melawi itu masih dalam bentuk Eksplorasi saja.
Potensi uranium di Kabupaten Melawi
terbesar di Indonesia dan sudah dilakukan ekplorasi sejak tahun 1974.
Rencana pendirian PLTN di Kalimantan Barat sebagai daerah yang aman dari
gempa dan tsunami, pemerintah tengah mencari lokasi PLTN di daerah
yang potensi tsunami dan gempanya rendah.
Sementara itu, Prancis memiliki banyak
data tentang kandungan uranium Kalimantan Barat. Pihak Amerika Serikat
pun mengincar potensi tambang uranium di daerah ini. Menurut mantan Chief Le Sondage (Kepala Bidang Pengeboran) eksplorasi uranium Nanga Pinoh/Nanga Ella & Nanga Kalan di Commessariats L’Energi Le Anatomique (Badan Tenaga Atom Prancis), Sunarjo M BSc, Prancis waktu itu menggandeng BATAN saat melakukan penelitian.
Menurut Sunarjo, eksplorasi dimulai pada dekade tahun 60-an. Kegiatannya merambah hingga Kapuas Hulu, Landak dan Sanggau.
Sekitar
tahun 1970-an eksplorasi memasuki wilayah Nangga Pinoh. Hingga
sekarang, eksplorasi uranium di Kalimantan Barat belum melangkah ke
tahap lanjutan.
Membuka tambang uranium tak bisa
sembarangan. Bukan seperti tambang biasa. Debu kandungan uranium itu
saja tak boleh bertiup ke luar areal pertambangan. Dampak lingkungannya
luar biasa.
Indonesia bisa kecolongan data mengenai
potensi uranium Kalimantan Barat yang mungkin pada waktu itu banyak
digelapkan oleh pihak Prancis.
Sedangkan pakar ekonomi Universitas
Hasanuddin di Makassar, Sulawesi Selatan, Syarkawi Rauf pernah
mengatakan, kandungan uranium di Mamuju itu mempunyai potensi terbaik
di Indonesia. Oleh karena itu, Rauf meminta agar pemerintah mengelola
tambang uranium itu dengan baik untuk mencapai kemakmuran rakyat, dan
jangan sampai hanya menguntungkan pihak asing.
Uranium bukan hanya untuk menghasilkan
tenaga nuklir—misalnya guna kepentingan pertahanan. Bahan uranium dapat
dimanfaatkan untuk menambah sumber ekonomi seperti Pembangkit Listrik
Tenaga Nuklir (PLTN) yang mendukung pasokan sumber tenaga listrik.
Beberapa daerah yang memiliki potensi
uranium adalah Sumatera, Jawa, Sulawesi, Kalimantan, dan Papua – bahkan
Freeport pernah menemukan bahan uranium di daerah tambang emas.
Laju Dosis Radiasi Gamma Tercepat
Kecamatan Singkep, Kabupaten Mamuju juga
menjadi kawasan yang laju dosis radiasi gamma-nya tercepat di Indonesia
dibanding rata-rata nilai laju dosis radiasi Gamma di Indonesia yang 46
nSv per jam, kata Direktur Pusat Teknologi Keselamatan dan Metrologi
Radiasi Batan, Susilo Widodo.
Ia mengatakan, pihaknya telah menyusun
Peta Radiasi dan Radioaktivitas Lingkungan sebagai data dasar, sehingga
kalau ada kenaikan radiasi yang disebabkan faktor bukan alami misalnya
radiasi hasil lepasan industri atau kecelakaan nuklir, bisa diketahui
dengan cepat.
The mushroom cloud over Hiroshima after the dropping of the uranium-based atomic bomb nicknamed ‘Little Boy’
Susilo mengatakan, saat terjadi
kecelakaan reaktor nuklir Fukushima misalnya, pihaknya tidak mendeteksi
adanya radiasi nuklir yang masuk ke wilayah Indonesia.
“Secara alamiah, radiasi nuklir dari
Jepang di utara sulit menyebrang ke kawasan katulistiwa. Justru jika
dilihat dari posisi dan arah angin potensi radiasi dari Jepang akan
masuk lebih dulu ke Amerika Serikat dan terakhir China,” katanya.
Peta ini, ujarnya, juga penting untuk
mengkaji efek kesehatan bagi masyarakat yang tinggal di daerah radiasi
tinggi serta indikasi bahan tambang seperti Uranium, Thorium dan mineral
sejenisnya.
Peta tingkat radiasi dan radioaktivitas
lingkungan di Indonesia ini, urainya, terdiri dari lima peta, yakni peta
laju dosis radiasi gamma lingkungan dan peta tingkat konsentrasi
radionuklida alam Thorium-228, Thorium-232, Radon-226, dan Kalium-40
dalam sampel permukaan.
Batan juga meluncurkan URL monitor
radiasi lingkungan kawasan reaktor nuklir Serpong dimana telah dipasang
lima monitor gamma di kawasan itu selama 2012-2013 dan meluncurkan “GPS
tracking” untuk transportasi limbah di Indonesia.
Namun diluar itu semua, langkah paling awal yang diharapkan dari pemerintah Indonesia adalah melindungi tiap aset bumi dan laut di Indonesia dari tangan-tangan asing yang tak pernah memakmurkan rakyatnya!
Jangan lagi kita kecolongan dengan
perjanjian-perjanjian tambang sebelumnya yang selalu dibuat oleh manusia
yang mengaku warga negara Indonesia, namun memilik mentalitas antek dan
budak asing, juga para konglomerat dengan kualitas sosial rendah, yang
selalu menjual dan menguntungkan pihak asing. (AntaraNews / D009/Z003/Editor: B Kunto Wibisono/COPYRIGHT © 2013 / mm-industri.com / tender-indonesia.com, KOMPAS, berbagai sumber)
World largest Uranium mines in 2005. Tampak wilayah Indonesia belum ada penambangan.
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