ONGC to enter nuclear mining
Source: 26-JUL-2008 Intellasia | Business Standard
Jul 26, 2008 - 7:00:00 AM Oil and Natural Gas Corp (ONGC), the country's largest oil and gas producer, plans to enter uranium mining in alliance with public-sector Uranium Corp of India, aiming to tap the business opportunity from nuclear fuel shortage in Asia's third largest economy.

ONGC is aligning with Uranium Corp as the latter is the only entity allowed to undertake uranium mining in India, and has the power to allot mining leases to others like ONGC, said two analysts tracking the nuclear industry.

For ONGC, nuclear mining is similar to onshore exploration for oil and gas and it hopes to leverage expertise in this field. The company may present the proposal to its board on Monday.

"It is a good time to get into the business. Opportunities for uranium mining will come up now that the nuclear deal with the US is likely to come through," said a senior ONGC official who declined to be named.

India, which has only 0.8% of the world's uranium reserves, will need to double its current reserves of 78,000 tonne to meet its plans to generate 20,000 Mw of nuclear power by 2020, assuming that the fuel is used only once, analysts said.

Another factor prompting companies like ONGC and Reliance Industries, which received an Australian mining licence last year, is the high uranium price in the international market. Global uranium prices are around US$4 per ounce, and have risen 9.32% in the last three weeks.

India has 17 nuclear power plants with a capacity of 4,120 Mw. Three plants with a capacity of 2,660 Mw are expected to be commissioned by March 2010, Nuclear Power Corp of India, the only company producing nuclear power in India, says on its website.

But, with non-availability of nuclear fuel, even existing plants are running at 50% of their capacity.