Ending India nuclear trade ban seen bullish for uranium

By Anna Stablum

LONDON (Reuters) - This weekend's approval by a group of nuclear nations to end a ban on uranium fuel supplies to India is likely to lift the depressed uranium spot price, analysts and traders said on Monday.

India's nuclear reactors are currently running at 50 percent of capacity due to a fuel shortage and with plans to more than double its reactor fleet over the next 15 years Indian demand is seen growing substantially.

The 45 nations of the Nuclear Suppliers Group (NSG) on Saturday backed a U.S. proposal and adopted a one-off waiver of a 34-year-old global ban on nuclear trade with India, allowing New Delhi and Washington to do business.

Only Russia has continued to supply India with uranium.

Congressional approval is the final hurdle for the agreement, essential to India's rising energy needs to power its booming economy.

"The deal needs to go through the U.S. Congress before any agreements that India has already signed with France, Russia and others become effective," said Steve Kidd, director of strategy and research of the World Nuclear Association (WNA) in an email.

The deal could come up for a vote in Congress this month. In the meantime, India could open informal negotiations for nuclear reactors and uranium supplies.

"I think they will start looking at the spot market and then they will start signing long-term deals pretty quickly," a uranium trader said.