Paladin Energy Ltd., the Australian mining company producing uranium in Africa, expects prices to keep rising as China drives demand for nuclear fuel.
China has “piled up” contracts to import uranium, Paladin Chief Executive Officer John Borshoff told analysts on a call today. “Although they have sucked a chunk out of new production, they are nowhere near their target of acquiring in the vicinity of 45 to 50 million pounds per annum by 2020.”
Paladin, which operates the Langer Heinrich mine in Namibia and the Kayelekera project in Malawi, forecasts increasing uranium demand as countries such as China expand the use of nuclear power to curb emissions from burning coal. The Perth- based company aims to double uranium oxide output.
Paladin’s uranium production rose 83 percent to 1.36 million pounds in the three months through September from a year earlier, it said last month.
Uranium oxide prices have rallied in the past month to about $59 a pound, compared with $40 in the second quarter of the year, Macquarie Group Ltd. said in a report today. Chinese imports have increased, particularly between June and September, according to Macquarie. Uranium peaked at $136 a pound in 2007.
Paladin is targeting uranium shipments to China in 2011 after signing a preliminary agreement with the nation’s second- biggest builder of nuclear power plants. The Australian company aims to convert a memorandum of understanding with China Guangdong Nuclear Power Group Co. into supply contracts later this year or early 2011, Borshoff said Sept. 1.
Source: www.bloomberg.com