Goldman puts 'for sale' sign on Iran's old uranium supplier

Tue Feb 11, 2014 8:19am EST
 
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By David Sheppard

LONDON (Reuters) - Goldman Sachs and Deutsche Bank are quietly trying to get out of a business few people know they are even in: trading supplies of raw uranium known as yellowcake.

In the last four years, the banks have amassed low-grade stockpiles of the nuclear fuel ingredient larger than those held by Iran, and enough to run China's nuclear plants for a year.

Goldman's uranium business can trace its roots back to an apartheid-era South African trading conglomerate that sold Iran its only known source of foreign yellowcake 35 years ago. To this day, that uranium delivery underpins Iran's disputed enrichment program, which western powers fear is aimed at developing atomic weapons, although Iran denies that.

Now, under mounting political scrutiny of Wall Street's role in physical commodities trading, and following a collapse in demand after the Fukushima disaster, both firms have put their uranium trading desks up for sale. But other banks are already lining up to take their place.

The history of Wall Street in uranium markets illustrates just how far banks moved into physical commodities trading during the natural resources boom of the last ten years.

Through its nuclear trading desk, known as NUFCOR International Limited, Goldman has a deal to market the vast majority of South Africa's uranium production from one of the country's largest miners.

While people familiar with the business say Goldman has only sold uranium to nuclear power plants and other traders since buying NUFCOR four years ago, some have questioned whether banks should be dealing in such a politically sensitive commodity.

Though the global trade in uranium is monitored by governments, intelligence agencies, and the International Atomic Energy Agency, no single authority can trace every deal.   Continued...

 
A Goldman Sachs sign is seen above the floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York January 24, 2014. REUTERS/Lucas Jackson