Denison waits for higher prices to develop Zambia mine
June 22, 2012
Revealing this here, a senior company official pointed out that the spot uranium price had languished at just above US$50/lb for the past year, falling from around US$70/lb after an earthquake and tsunami in February 2011 crippled the Fukushima plant, leading to the closure of Japan’s 50 reactors and souring sentiment elsewhere for nuclear power.
“We need prices that are above US$65/lb of uranium oxide to make the Muntanga project feasible,” Andrew Goode, Denison’s project director for Africa, told Reuters on the sidelines of a mining and energy conference here.
“We have very strong indicators that uranium prices will start improving in late 2013, due to the depletion of stocks from surplus nuclear war heads from the cold war,” Goode said.
Denison was planning to mine about 18.8Mt of uranium ore from the Zambian project, according to information submitted to the Zambian environmental management agency. The company was undertaking further exploration work to find more resources and hopefully increase the ore grade to reduce its operating costs, according to Goode.
“Denison hopes the Zambian government will not revoke its mining licence following a three-year delay in developing the project,” he added.
The company intends to invest US$118 million in the Muntanga project and subsequently process the ore into uranium oxide concentrate, according to ministry of mines data.
Source: Reuters Africa. For more information, click here.