Uranium Investing News

By Melissa Pistilli-Exclusive to Uranium Investing News

Both the industry’s two leading consultancy firms, TradeTech and Ux, have lowered their weekly uranium spot price indicators to $52 per pound, erasing last week’s gains.

The dramatic increase in the short-term U308 price from $49 to $55 over the past month brought new supply to market, but also placed downward pressure on buying, widening “the gap between willing buyers and willing sellers,” said TradeTech. Ux also cited the lead up to the traditionally weaker demand of the summer season as a reason for decreased buyer interest.

Although the gains in uranium spot prices over the last few weeks have prompted increases in long-term contract bids over $70 per pound, there are still some willing to sell for cheaper. Hence, both firms have maintained their long-term price estimate of $65 per pound.

Africa: Race for Uranium Resources

In the hunt to secure uranium supplies and a strong position in the uranium market, several key players are establishing a presence on the African stage. In Namibia, Paladin Energy Ltd. [TSX: PDN] is expanding its Langer Heinrich mine and Russia is quickly becoming an active partner in the nation’s uranium industry. Denison Mines Corp. [TSX: DML] is looking forward to production out of Zambia.  And in Botswana, China and Japan are competing for uranium resources.

Paladin Third-stage Expansion to be completed in 2010

Paladin Energy recently announced that third-stage expansion on the Langer Heinrich, its flagship uranium mine in Namibia, will commence shortly and completion is expected by September 2010.

The work is anticipated to bring annual production up to 5.2 million pounds per year. This estimate is down from the company’s original target of 6 million pounds, but the lowered production rate significantly decreases the project’s vulnerability to delays brought on by extra water supply requirements.

Paladin says enough reserves and stockpiles exist to keep the mine in operation for another 12 to 13 years, however future drill work will allow the company to raise its inferred resources to extend mine life to over 20 years at current ore grades of 800 ppm uranium and stockpiles of lower grade.

Russian Sights Set on Namibian Uranium Deposits

As a part of his four-nation tour of resource-rich Africa, of which energy is a top issue, Russian President Dmitry Medvedev visited uranium-laden Namibia last week. Medvedev said talks with the southern African nation’s leaders included expanding co-operation on its many uranium deposits.

Russia has already begun exploring for yellow cake in Namibia. Back in 2007, the Namibian government granted an exploration license to a joint venture headed by Russian uranium seller Tekhsnabexport.

“Namibia very much needs to develop its energy sphere,” said Russian natural resources minister Yury Trutnev. He also said that his government would like to lend Namibia a hand in developing its nuclear industry. Demand for nuclear fuel from Russia alone could make Namibia a major producer.

Zambia: Denison Mines Corp.

Canadian-based Denison Mines recently announced that it may begin mining uranium in Zambia by 2012. Denison began exploring for uranium in Siavonga, Zambia in 2007 and since then has invested around $23 million to date.

Energy Hungry Asia Hunts Resources in Botswana

In Botswana, China and Japan are competing for uranium resources. While Japanese companies have stepped up their efforts, the Chinese are steps ahead.

“The Chinese are venturing into areas which have huge potential for exploration and development of these resources,” said Johannes Tsimako, Chief Geologist at the Department of Geological Services.

With 12 nuclear reactors under construction, thirty-three planned and eighty more proposed, China is intent on meeting its growing energy demands.

Currently, one hundred and eleven Chinese companies hold exploration licenses for uranium and other resources in Botswana. Reportedly, the Chinese want total control of their exploration activities rather than just owning shares or partnering in joint ventures.

“The Chinese companies would prefer to hold 100 percent equity in the company holding ground and would rather own the exploration license themselves. Even if they bought into an existing company, they would want to take it over,” said Tsimako.