Harmony CEO
Graham Briggs “’
current outlook
for platinum
is not good
Denver, United States — MININGREVIEW.COM — 23 September 2010 – Construction of the proposed R3.5billion Rand Uranium plant to be built near Randfontein in South Africa could be delayed because of current low uranium prices.

That’s according to Harmony Gold CEO Graham Briggs, who was replying to a question posed after his presentation to the Denver Gold Forum. Harmony holds a 40% stake in the unlisted Rand Uranium.

Briggs told the conference that: “Rand Uranium is a great project at a uranium price of $65/lb. At prices closer to $45/lb it is not so great and you probably would not make that investment.”

Uranium prices have been depressed for the past 18 months with the spot price currently sitting around $48/lb and the long-term contract price stuck at around $58/lb. The contract price is the more important of the two because most nuclear power stations buy their uranium on long-term contracts to ensure security of supply.

A number of uranium industry executives – most notably Paladin Energy CEO, John Borshoff, – have predicted that a sharp rise in uranium prices is imminent because of looming supply shortages.

Extract Resources CEO Jonathan Leslie “’ currently developing the Rossing South project in Namibia “’ commented in Perth recently that: “Current sentiment towards the spot price is for a strong rebound in uranium concentrate prices over a two-year price horizon to satisfy the new growth in demand. “Spot prices of around $70/lb can be expected to provide uranium producers with the right incentive to develop new supplies,” he added.

Interviewed after his presentation Briggs confirmed to Miningmx that the current outlook for Rand Uranium was not good, given present uranium prices. He said a key issue would be whether Rand Uranium could negotiate long-term supply contract prices with customers that would be high enough to justify going ahead with the project.

Briggs added the Rand Uranium board was due to make a decision on the future of the project within the next two to three months.