Nuclear not so hot as companies search elsewhere
A slump in uranium prices is starting to hit producers, with one Paladin Energy mine closing and a major miner saying the outlook is not good.
Cameco, one of the world’s biggest uranium miners, has cut its growth schedule on the basis of low prices. Cameco says forecasts suggest market conditions will remain unhelpful for a while.
Since the Fukushima nuclear crisis in 2011, several nations have turned away from the clean and efficient power source, driving uranium prices ever lower.
“Market challenges have persisted since early 2011 and we expect they will continue for the near to medium term,” Cameco said in a statement.
“Utilities are well covered under long-term contracts for the time being and are not under pressure to buy. Similarly, existing suppliers appear reluctant to enter into meaningful contract volumes at current prices,” the company said.
Cameco has deferred a uranium project in Western Australia, the Kintyre mine, for several years now. Over the weekend the company vowed to “decrease activities in Australia” even further.
Paladin Energy, a WA-based company with two uranium mines in Africa, has confirmed it will put its Kayelekera mine in Malawi on “care and maintenance”, to keep costs down while prices are dim. The mine has been losing money for several years, prompting the closure to “preserve the remaining ore body until a sustained price recovery occurs.”
Paladin says at $US35 ($39) a pound for uranium oxide, it would have to pour $US25 million in per year to maintain Kayelekera.
Keeping the mine on ‘care and maintenance’ will cost about $US12 million a year, which Paladin says will be funded from sales of uranium oxide already at the site.