Nufcor ups uranium lending to 100%

�

�

Charles Scorer, CEO, Nufcor

� Ux relights SA mining industry
� Gold Fields considering Ux deal
� Harmony in Renova Ux, gold swap
� AngloGold in 40% Ux boost
� Uranium One offtake deals break new ground
� Bar raised on uranium deals

> JSE:ANGLOGOLD ASHANTI LIMITED:
29610c

Click here to find out more about how to use this button

Nufcor ups uranium lending to 100%
Allan Seccombe
Posted: Wed, 28 Mar 2007

[miningmx.com] -- NUFCOR Uranium, the holder of 2.3 million pounds of uranium oxide, has lent users and producers 40% of its stocks and could increase that to 100% amid a global squeeze of the metal used primarily in energy production, said Nufcor CEO Charles Scorer.

Nufcor could increase its stockpiles of uranium by buying UF6, or uranium hexafluoride, Scorer said.

Delegates at the Uranium Africa conference in Johannesburg were told that uranium prices were expected to break through historic highs of between $100 and $110 reached in the mid- to late 1970s as supplies trail rapidly rising demand.

The industry is quite distressed

Scorer reckoned that investors like Nufcor, Canada�s UPC and hedge funds hold 15 million lb of uranium, equating to eight percent of global consumption for one year. UPC was estimated by Scorer to hold seven million pounds.

�Forty percent of Nufcor�s uranium is lent out to parties affected by the Cigar Lake and Ranger floods. We are acting as a bank,� Scorer said.

At an extraordinary general meeting on Tuesday, the Nufcor board agreed that 100% of its stocks could be lent to those in need.

�The industry is quite distressed at the moment,� Scorer said.

The uranium oxide (U3O8) price is at $95/lb, but he reckoned that up to 90% of deliveries by producers were priced well below that level because of long-term contracts entered into by mining companies.

The main drivers of the price of uranium are investors, who are buying the metal and holding it in stockpiles, he said.

Click Here to subscribe to our daily newsletter

Cameco�s Cigar Lake project, which was due to bring 17 million lb of uranium onto the market was flooded in October 2006 and is not expected to return to production before 2010.

The Ranger project in Australia was flooded in a tropical storm during March this year, curtailing supply of four million pounds or more of uranium to the market.

The world needs 173 million pounds of uranium this year, but supplies are barely above 100 million pounds.

Utilities such as nuclear power plants in need of uranium but unable to source it on the market have borrowed the metal from Nufcor, as have producers who have delivery commitments but are unable to meet those cheaply through buying material at fiercely contested auctions.

Many producers are locked into contracts to supply uranium at prices that are a fraction of the spot market price. Newer producers are entering into contracts unheard of in the industry before, which give remarkably high floor prices but no ceiling level.

There are 150 buyers of uranium worldwide but only eight producers, Scorer said.

�New producers that are coming into the market are in a total wonderland,� said Robert Wallace, CEO of the UK�s Yellowcake, who argued that uranium prices were going through a third boom that was far more sustainable than the previous two.

�