The uranium industry's worst year is about to collide with a nuclear construction programme in India and China that rivals the ones undertaken during the oil crisis of the 1970s. The result is likely to be a 58 per cent rebound in uranium to $90 a pound from $57 now, according to Goldman Sachs JB Were Pty and Rio Tin-to Group, the third-biggest mining company. Uranium plunged 57 per cent in the past year as an earthquake damaged a Japanese nuclear plant that's the world's largest and faults shut down reactors in the UK and Germany. Plans for India and China to end electricity shortages will ripple from northwest Canada to the Australian outback and the flatlands of Kazakhstan, the primary sources of uranium. India will start up three reactors this year, with another six due in 2009. Uranium demand worldwide will rise as fast as oil this year, or 0.8 per cent, Deutsche Bank AG forecasts. "The first wave of growth is going to come from the emerging economies," said John Wong, fund manager with CQS UK LLP in London, which has $10 billion under management including $150 million of uranium investments. "People are starting to look at coal, at gas, at oil and seeing the energy prices go up, they wonder about uranium." The year-long decline in uranium contrasts with record prices for oil and coal as Asian energy demand expands and concern mounts that emissions will cause global warming to worsen. The world needs to build 32 new nuclear plants each year as part of measures to cut emissions half by 2050, the Paris-based International Energy Agency says. In India, Nuclear Power Corp's 220-Mw Kaiga plant in the southern province of Karnataka and another at Rawatb-hata in the northern state of Rajasthan are due to come on line this year. China started two units in 2007 and will bring on three more through 2011, says the World Nuclear Association (WNA). Iran plans to begin generation this year at its 950-Mw Bushehr reactor, which is at the centre of the nation's conflict with the West. "China is just on the verge of a second rapid phase of expansion," says Ian Hore-Lacy, director of public communications for the WNA in London. "Each year China seems to raise their sights further." Uranium demand was 66,500 tonnes last year, according to data from Denver-based consultant TradeTech LLP Consumption may jump 55 per cent to 102,000 tonnes by 2020, forecasts Macquarie Group Ltd, Australia's biggest securities firm. Uranium use now is 69 per cent greater than the 39,429 tonnes that was mined in 2006, the most recent data from the WNA show. The balance comes from inventories and decommissioned weapons. A Russian accord to export fuel recovered from warheads to the US expires in 2013. "Secondary supplies are finite and rapidly being depleted," Deutsche Bank analysts led by Michael Lewis said in a June 20 report. "Continual supply issues and the likelihood of increased demand from utilities should drive the spot price higher during the third quarter of this year." Demand is set to increase as existing reactors are brought back on line, while nuclear energy gains converts. Prices will have to increase if uranium production is to meet the rising demand, said Kevin Smith, head of uranium trading at New York-based commodities brokerage Traxys. Canada's Cameco Corp, the world's largest uranium producer, reported it spent a total of about C$45 ($44) to produce a pound of uranium in the first quarter, compared with its average realised price of C$40.85 a pound. While Cameco, which also mines gold, still posted a profit for the quarter, lower uranium prices are a problem for other companies developing new mines, according to Smith. "There are a lot of production projects that are feeling the pain," Smith says.