[miningmx.com] — THE uranium market needed some kind of catalyst for the underlying supply and demand fundamentals to re-assert themselves and the spot uranium price to move up sharply again.
This is according to Paladin Energy CEO John Borshoff, who was commenting on depressed uranium prices in the wake of the Fukushima nuclear reactor incident in March.
Interviewed on Wednesday at the Africa Down Under in Perth, Australia, Borshoff said the takeover offer made by Canadian uranium heavyweight Cameco for Hathor – which followed the acquisition of Mantra Resources by Russian group ARMZ – were true indicators of the fundamental state of the uranium sector.
“The supply/demand tension is there and the re-affirmation of nuclear is taking place,’ he said.
“Since Fukushima, Saudi Arabia has committed to building 16 reactors but it seems nobody has noticed that. They are focused instead on negative news from countries like Italy and Switzerland which were never in the game in the first place.’
Borshoff described the pricing attitude of uranium consumers – which he did not name but consist of the world’s major nuclear utility groups – as “paternalistic’.
He said they had little appreciation of how the uranium mines were being affected by capital expenditure inflation; operating expenditure inflation and increasing regulatory pressures.
He also highlighted the lack of new capacity coming on stream in the uranium sector to meet future demand.
“Time moves on. New projects get run down. You will find that new projects like Extract Resources (which is developing the Rossing South deposit in Namibia) will be a replacement for the existing Rossing Mine and the Jabiluka development (in Australia’s Northern Territory) will be a replacement for the existing Ranger Mine.’
SUSTAINABLE DEVELOPMENT
Borshoff said mining companies have been responsible for the “first wave of the surge towards economic improvement’. He said new initiatives were far more important in undeveloped nations, where the current mining boom was taking, place than in developed mining destinations.
Paladin has so far developed the Langer Heinrich uranium mine in Namibia and the Kayelekera uranium mine in Malawi. It is currently assessing the Takardeit deposit in Niger which is estimated to contain a resource of 11 million pounds of uranium.
“You simply cannot believe how the development of our small mine has changed the whole of the northern region of Malawi,’ said Borshoff.
“I laugh when I hear people going on about sustainable investment in Australia.
“In Africa, you are dealing with communities where the past 20 generations have followed their fathers’ role model but now have the first chance of getting a job on the mine or in the service industries that support that mine.
“If the multiplier effect of a mine development in Australia is five to one then in Africa it’s 20 to 1. We are not social engineers but, in situations like that, you really start looking at how you can get more life out of that mining development.’
Borshoff said that at Kayelekera, Paladin had developed what it called a “corridor of care’ to ensure that benefits from the mine were spread throughout the villages on the approach road to the mine.
Borshoff likened the involvement of the Australian junior miners in Africa to the role played by the major multi-national corporations when they first started their development projects in Australia.
“Australia now finds itself in the role of a multi-national corporation and it’s companies from Australia, Canada, Brazil and, to an extent, South Africa that will be building the mines of the future,’ he said.
Borshoff described current global mining developments as ” a super resources boom on a galactic scale’ which is far greater in scope than the world’s first industrial revolution.
He said the mining companies were providing the raw materials needed for the development and transformation of China and India through to about 2050.
