Playing Thorium

Using thorium in a nuclear reactor offers several advantages. For starters, a thorium-based reactor cannot start by itself, as the metal must first be bombarded with neutrons to transform into uranium-233, which is a fissionable material. This means existing nuclear waste can be used in the start-up function and burned up in the process. Plus, the thorium-uranium 233 cycle does not create higher-order actinides, like plutonium, that can be reappropriated into nuclear weapons; hence, thorium-based reactors would not contribute to nuclear proliferation. And best of all, the waste from thorium reactors is proportionately much less than that from uranium reactors and decays to background radiation levels within a few hundred years, as opposed to thousands of years for uranium reactor byproducts.

But thorium doesn't always behave like uranium, so using it in a nuclear reactor requires different strategies. One public company taking the incremental approach is Lightbridge Corp. (Nasdaq CM: LTBR), formerly Thorium Power Inc. Lightbridge has developed a thorium-uranium fuel rod that is a near-direct replacement for the fuel in existing uranium-based reactors. Its advantages include reductions in volume, weight, and, most significantly, radio toxicity of used fuel—not to mention it contains the risk of weapons proliferation.

But should thorium replace uranium as the nuclear fuel of choice, eventually reactors must be designed specifically with thorium in mind. Privately owned DBI/Century Fuels Inc. has designed a gas-cooled reactor to be produced in modules of 25 to 50 MW electrical. While the field seems small now, look out for other companies to announce plans for different designs soon.

Game Changers?

Although thorium technology offers substantial advantages, the legacy uranium technology has become deeply entrenched over the course of six decades with corporations and bureaucracies devoted to its advancement. There are, however, a potent set of potential game changers, as leaders in the U.S. Congress and the Department of Defense now recognize it is not in its national interests to have strategic materials like nuclear fuels and REE under the control of foreign governments.

For example, one Congressional bill, H.R. 1534, would direct the Department of Defense to investigate the possible use of thorium in naval reactors. Another, Senate Bill S.3680, would amend the 1954 Atomic Energy Act to provide for thorium nuclear fuel development. In fact, when Senator Orrin Hatch introduced the bill, he said, "Our nation has focused mostly on mixed oxide nuclear fuel cycles, and our regulatory structure reflects that. With the growing interest in thorium nuclear power ... it's time we made sure our government has a regulatory infrastructure in place to accommodate this new generation of nuclear power."

Should one of these bills become law, the prospects for thorium will suddenly become much brighter. Until then, however, nuclear-minded investors would be wise to keep an eye on thorium as uranium's potential replacement.

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