Low Prices take another Australian Casualty but Athabasca Basin Optimism Persists

Uranium (Nuclear Minerals) / Nuclear Power - Economics, Design, & Industry

Date posted: 06/15/15

Greg Klein reports that the agonizing wait for the uranium price breakout has taken its toll on two more Down Under-headquartered miners. Energy Resources of Australia mine plummeted 48 per cent after abandoning a planned expansion of Northern Territory Ranger 3 mine. That leaves Rio Tinto, which holds 68.4 per cent of ERA, considering a post-tax impairment of about US$300 million. Low prices take another Australian casualty but Athabasca Basin optimism persists With uranium grades 100 times the world average, Cigar Lake thrives while competitors shut down. Explaining the decision to dump Deeps feasibility study, ERA June 11 announcement noted the uranium lack of price improvement as well as its uncertainty for the immediate future. Additionally, economics would require operations beyond the Ranger mine current permitting span, which ends in 2021. After careful consideration, Rio concurred. The giant does not support any further study or the future development of Ranger 3 Deeps due to the project economic challenges. Rio had already cut production at its majority-held Rossing mine in Namibia. A South Australia mine, Honeymoon, was taken offline by Uranium One. The commodity has eluded positive predictions from many quarters, including Paladin Energy, which placed its Kayelekera mine in Malawi on care and maintenance and sold a 25% stake in its Langer Heinrich mine in Namibia to China National Nuclear Corp. Those setbacks have not stopped Paladin managing director-CEO John Borshoff from predicting sharp price hikes in near- and medium-term contracts. The long-anticipated market-moving event would be the Japanese first reactor restarts, which would reduce the country apparent stockpile and, maybe more significantly, provide a psychological boost to a demoralized industry. Once scheduled for operation this month, the first two restarts currently face a court injunction, which is expected to be lifted soon.