2011 Uranium Market Trends

In 2011, the uranium mining industry experienced a number of important events which had an impact on uranium prices and equity market volatility.

Germany, Italy and Switzerland have made policy decisions concerning nuclear energy which are not positive for the industry; however, these three countries joint represent a relatively small proportion of global demand for uranium totaling just about 5.8 percent of annual requirements. Following up with key points on the stipulate and supply arguments Mr. Khaliqi underscored “Germany’s stance to decommission all nuclear plants has also prompted other European nations to evaluation their policies. On the supply side, the biggest news story or catalyst in my view which will have substance impact on medium to long term prices is BHP’s (NYSE:BHP) planned expansion of Olympic dam. The expansion at Olympic Dam will considerably lift the mine’s annual production of uranium from 4ktpa to 19ktpa, adding major amounts of uranium to global supply.

Another key increase this year was the feasibility study of the Husab uranium project, a $1.7 billion uranium undertaking on the western coast of Namibia. Earlier in this month, Extract Resources Limited (ASX:EXT) was offered $2.2 billion by China Guangdong Nuclear Power Corp (CGNPC) designed for its Husab uranium project. This is of importance as the Husab project is the largest in-situ, and maximum grade, granite-hosted uranium deposit in Namibia. It is as well the fifth-largest uranium-only deposit in the world.

The Australian uranium exploration and mining companies may have seen enhanced regulatory conditions, as Australian prime minister, Julia Gillard, appeared intent to vary the current policy which did not allow uranium sales to India. India’s new rules to provide liability limitations for uranium producers and equipment suppliers in the case of a grave accident at Indian nuclear power plants saw a positive ending for all uranium producers.Earlier this month, the Nunatsiavut Assembly in Eastern Canada, lifted a suspension on uranium mining on Inuit land in Labrador after three years.