October 24, 2016 / 9:56 AM / 2 years ago

Uranium veteran says sector in for lengthy price pain

SYDNEY (Reuters) - It could be years before uranium miners dig themselves out of the hole caused by the Fukushima nuclear disaster a half-decade ago, one of the sector’s best-known bulls said on Monday.

Uranium ore is heap leached with sulfuric acid at Areva's Somair mine in Arlit, Niger, September 25, 2013. REUTERS/Joe Penney/File Photo

Uranium prices have been in near free-fall since an earthquake triggered a tsunami off Japan in March 2011 and caused a reactor meltdown at the Fukushima nuclear power plant, crippling the country’s atomic power industry.

The accident forced all of Japan’s 42 nuclear reactors offline over fears of radiation exposure. Only two are now in service.

The uranium market has been suffering from “paralysis” since the Fukushima disaster, said John Borshoff, who headed African uranium miner Paladin Energy for 23 years before leaving last year. Any attempts to introduce new supplies or dig new mines were “not sympathetic to reality,” he said.

“There’s a window of nine to 24 months” before signs of a turnaround can emerge, Borshoff told Reuters in an interview.

In his new role as managing director of uranium explorer Deep Yellow Ltd, Borshoff said he is in no rush to find more yellowcake, as unprocessed uranium ore is called, happy to allow time for the market to swing back into favor.

Borshoff says low uranium prices were acting as Deep Yellow’s “friend” by discouraging over-production by the sector and hopefully balancing prices by the time the company is ready to dig its own mines in Namibia starting sometime in 2019.

Weekly uranium prices stood at $21.25 a pound on Monday, down from $73 just before the Fukushima disaster, according to the UX Consulting Co.

Under Borshoff, Paladin rode the boom in uranium, with its stock trading at around A$10 a share in 2007 and giving the executive a stake worth A$200 million ($153 million).

But the global financial downturn, followed by Fukushima, and then high debt, put Paladin on a long-term downward trajectory. Its shares closed at 15 Australian cents on Monday.

Paladin’s Kayelekera mine in Malawi has been suspended. Its Langer Heinrich mine in Namibia is still in production.

($1 = 1.3094 Australian dollars)

Reporting by James Regan; Editing by Christian Schmollinger

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below