Uranium must rise 25 percent to give mining companies an incentive to start or develop projects outside of top producer Kazakhstan, said Clark Beyer, managing director of Rio Tinto Uranium Ltd. His comments relate to uranium-oxide concentrate’s “long- term” price, defined as release in more than 24 months by Ux Consulting Co. The price is $60 a pound, UxC said Sept. 20 in its latest weekly report, compare with a 2010 low of $58. “You need probably a $75 price to incentivize a lot of the latest projects around the world,” Beyer said yesterday in an interview. “It is certainly a helpful sign that things are picking up, but as yet we have not seen much movement in the long-term price.”
Kazakhstan, which now accounts for almost a third of world uranium production, more than tripled its output of the radioactive part over the past five years, according to figures from the World Nuclear Association. Output fell in that span in Canada, the second biggest manufacturer, and in third- ranking Australia, according to association data. “There are a lot of projects on the drawing board that will have trouble receiving into production or will be delayed” at current prices, Beyer said. “Almost all of the supply development of the past five years has been in Kazakhstan. If it is going to be anywhere else, in Africa, Australia and Canada, we will possibly need to see stronger prices.”
UxC expects between 40 million and 45 million pounds of uranium to trade this year on the spot market, where mainly purchases are for delivery in up to three months. A record 54 million pounds was buying and sold last year, accounting for about 33 percent of global reactor needs, according to the Roswell, Georgia-based consultant. Uranium for urgent delivery has climbed 19 percent to $48 a pound from this year’s low in March, UxC’s latest report shows. The “long-term” price “is actually the more important indicator when it comes to supporting new project development, rather than the spot price,” Beyer said.
Kazakhstan, which now accounts for almost a third of world uranium production, more than tripled its output of the radioactive part over the past five years, according to figures from the World Nuclear Association. Output fell in that span in Canada, the second biggest manufacturer, and in third- ranking Australia, according to association data. “There are a lot of projects on the drawing board that will have trouble receiving into production or will be delayed” at current prices, Beyer said. “Almost all of the supply development of the past five years has been in Kazakhstan. If it is going to be anywhere else, in Africa, Australia and Canada, we will possibly need to see stronger prices.”
UxC expects between 40 million and 45 million pounds of uranium to trade this year on the spot market, where mainly purchases are for delivery in up to three months. A record 54 million pounds was buying and sold last year, accounting for about 33 percent of global reactor needs, according to the Roswell, Georgia-based consultant. Uranium for urgent delivery has climbed 19 percent to $48 a pound from this year’s low in March, UxC’s latest report shows. The “long-term” price “is actually the more important indicator when it comes to supporting new project development, rather than the spot price,” Beyer said.
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