WINDHOEK French energy group Areva said on Thursday it had delayed the start of its $1 billion Trekkopje uranium mine in Namibia until market conditions improve.
"Considering both the continued decrease of uranium prices coupled with the investments yet to be made on site, AREVA has no other option than to postpone the launch of the Trekkopje mine," the company said in a statement.
Uranium prices have been on the decline since the nuclear disaster at Fukushima in Japan in March 2011, with some countries questioning the safety and viability of nuclear energy and some suspending their plans to build new plants altogether.
The uranium spot price hit a new two-year low last week at $45.75 per lb. That compares with the February 2011 average spot price of $69.63.
Areva said the project, which makes use of the "heap-leaching" extraction process and is about 80 percent complete, was only viable at a price of $75 per lb or more. It will cost the company $10 million a year to keep the project under care and maintenance.
The company plans to finish all ongoing construction by December.
Trekkopje was expected to produce 3,000 tonnes of uranium oxide per year. Areva said it was committed to the project once economic conditions improve.