Japan, China, Korea in energy shopping spree

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

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

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

Reuters quotes Kairat Kelimbetov, CEO of Samruk Kazyna, Kazakhstan’s sovereign wealth fund, as anticipating contracts in uranium, as well as opportunities in other mining sectors. A meeting among energy officials from the two countries, to discuss cooperation in uranium, is scheduled for late April.

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

In November Kazatomprom announced that China Guangdong Nuclear Power would take a 49% stake in Irkol deposit, with an anticipated production of 750 tonnes uranium oxide per year, and in Semizbay deposit, with an anticipated annual production of 500 tonnes uranium oxide. And China National Nuclear would acquire a 49% stake in the Zhalpak deposit, with an anticipated annual production of 750 tonnes uranium oxide.

Japan is also not sitting still. In November, Nippon Export and Investment Insurance, a state agency, has increased its credit coverage for joint projects between Kazatomprom and Japanese partners, from US$48 million to US$114 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) for $270 million. The consortium is entitled to buy 20% of the company’s uranium production. (Toshiba is the parent company of U.S. reactor maker Westinghouse Electric.)

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

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