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Last Updated: Wednesday, 11 April 2007, 12:34 GMT 13:34 UK
Nuclear goals spark uranium deals
Areva nuclear plant
Nuclear power has gained in appeal as an alternative energy source
A scramble by nuclear power firms for the world's scarce uranium resources has sparked a string of corporate deals and takeover bids.

With uranium prices at their highest since the 1970s, France's Areva is to buy up to 18% of uranium firm Summit Resources.

The move follows a 1bn Australian dollar (US$825m; 417m) hostile bid for Summit from Paladin Resources.

Japan's Mitsubishi aims to buy 50% of a CanAlaska uranium mining scheme.

As firms are vying to take advantage of the growth in nuclear energy, there have been fears over uranium shortages.

"We should produce as much uranium as possible to stop a growing deficit that may hamper the nuclear power development," said Mukhtar Dzhkishev, the head of Kazakhstan's atomic firm Kazatomprom, according to Russian news agency Tass.

This renewed interest in nuclear energy comes after years of underinvestment in the sector, due to safety concerns.

'Long term'

Nuclear energy is gaining in appeal as an alternative to fossil fuels. Uranium prices have climbed by some 20% this week to $113 a pound.

Summit Resources said French firm Areva - the largest maker of nuclear reactors - would initially buy a 9% stake, with the option of buying a further 9% later.

Alan Eggers, managing director of Summit, said Areva's purchase was part of a "long-term relationship with Areva".

It remains to be seen how Paladin Resources - which has interests in Namibian mines - will respond to Areva's latest move.

Wider trend

In other uranium deals, Mitsubishi Development is to invest 11m Canadian dollars (4.8m) into the West McArthur block, a uranium mining area in Canada.

The investment by Mitsubishi Development, the wholly-owned Australian mining arm of Japanese group Mitsubishi, will give it access to half of the CanAlaska project.

The move comes after a wave of nuclear deals last year.

In October 2006, Mitsui joined with Russia's nuclear firm Tenex to establish a uranium mine while Sumitomo joined with Kansai Electric Power to expand a uranium project in Kazakhstan.

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