Japan, China, South Korea In Energy Shopping Spree

Taking advantage of depressed prices, energy-poor but cash-rich industrial powerhouses Japan, China and South Korea have embarked on large-scale buying of energy assets.

The latest move comes from China’s largest oil producer, China National Petroleum Corp. (CNPC), which is lending US$5 billion to Kazakh state oil company KazMunai Gas for a joint purchase of Kazakh oil developer MangistauMunai Gas, reports Chinese state news agency Xinhua.

The deal follows recent Chinese oil deals with Brazil, Russia and Venezuela. But China is also looking beyond oil.

Kairat Kelimbetov, the CEO of Kazakhstan’s sovereign wealth fund, Samruk Kazyna, has said he anticipates contracts with the Chinese in uranium and possibly other mining sectors, according to Reuters news agency. A meeting among energy officials from the two countries, to discuss co-operation in uranium, was to take place in late April.

Kazakhstan produced 8,500 tonnes uranium oxide last year, and plans to produce 11,900 tonnes this year. Kazakh state uranium company Kazatomprom announced in February that it intends to eventually reach production of 27,000 tonnes uranium oxide per year. Two projects currently in progress are Khorasan 1 and 2, together designed to produce 5,000 tonnes U₃O₈ per year.

In November, Kazatomprom, which has 25,000 employees, announced that China Guangdong Nuclear Power would take a 49% stake in the Irkol deposit, with anticipated production of 750 tonnes U₃O₈ per year, and in the Semizbay deposit, with anticipated annual production of 500 tonnes U₃O₈. And China National Nuclear would acquire a 49% stake in the Zhalpak deposit, expected to produce 750 tonnes U₃O₈ per year.

Japan is also actively pursuing opportunities. In November, state agency Nippon Export and Investment Insurance increased its credit coverage for joint projects between Kazatomprom and Japanese partners, to US$114 million from US$48 million.

In February, a Japanese consortium consisting of Toshiba, Tokyo Electric Power, and Japan Bank for International Cooperation bought a 19.95% stake in Uranium One (UUU-T, SXRZF-O) for $270 million. The consortium is entitled to buy 20% of the company’s uranium production. (Toshiba is parent of U. S. nuclear reactor maker Westinghouse Electric.)

And in March, state-owned Japan Oil, Gas and Metals National Corp. (JOGMEC) optioned 50% of Pitchstone Exploration’s (PXP-V, PEXPF-O) early stage Wolverine and Marten uranium projects in the Athabasca basin of northern Saskatchewan for $2 million.

South Korea is also on the energy acquisition trail. In mid-April, Korea Electric Power (KEP-N) signed a non-binding memorandum to buy a 19.9% stake in Denison Mines (DML-T, DNN-X) for about $75 million. The company will be entitled to buy 20% of the company’s uranium production.