MOSCOW, Aug 20 (Reuters) - Canadian miner Uranium One Inc , which Russian nuclear corporation Rosatom plans to consolidate and take private this year, expects uranium prices to almost double in a couple of years amid dwindling supply, its top manager said on Tuesday.
The price of uranium, used mainly as fuel for nuclear reactors, plunged after the March 2011 meltdown at Japan’s Fukushima Daiichi atomic power plant and has struggled to recover ever since.
August uranium futures on the New York Mercantile exchange closed at $35.15 per pound on Monday compared with $68 per pound before the earthquake and tsunami in Japan.
As a result, high-cost uranium mines will not survive competition and will be closed down, Uranium One chief executive Chris Sattler told journalists at a briefing in Moscow.
Uranium One - a step away from becoming a 100-percent unit of the Russian nuclear corporation - is betting on a price surge in the mid-term, hoping to boost revenues, Sattler said.
“The reason is that, according to industry expert UxC, 50 percent of global production just doesn’t make money at the current price level”, he said.
The shuttering of some high-cost mines would squeeze global supplies and result in prices rising to around $60 per pound in 1-3 years, according to Sattler.
He added that prices would also be boosted once around 24 million pounds of secondary uranium is removed from the market under the U.S.- Russian Megatons to Megawatts Programme, which winds up this year.
The programme is a bilateral nonproliferation agreement to convert high-enriched uranium taken from dismantled Russian nuclear weapons into low-enriched-uranium for nuclear fuel.
Uranium One’s operations are focused in Kazakhstan - the world’s top uranium producer, with more than double the output of No.2 producer Canada in 2011, data from the World Nuclear Association showed. The Central Asian country’s output quintupled between 2004 and 2011.
Rosatom needs to get a final go-ahead from regulators before taking over the remaining 49 percent stake of Uranium One and expects to finalise the deal in the third quarter 2013, taking the company private in a deal estimated at around $1.3 billion . (Reporting by Svetlana Burmistrova; Writing by Andrey Kuzmin; Editing by Jeff Coelho)