ERA: Weak Uranium Prices, Weak USD Makes Projects Uneconomic
November 09 2009 - 6:08PM
Dow Jones News
Uranium miner Energy Resources of Australia Ltd. (ERA.AU), a
unit of Rio Tinto Plc (RTP), said Tuesday weak uranium prices as
well as the weak U.S. dollar would render new mining projects
uneconomic in the longer-term.
This would leave the market heavily dependent on expansions in
Kazakstan, in an industry where the global financial crisis was
likely to slow new reactor build in Western countries "but probably
not in China," ERA said in a statement.
In the short-term, spot uranium prices are set to stay volatile
in an uncertain market, where supply disruptions are adding to
jittery prices, ERA said.
The current spot price, which has fallen to around US$50 a pound
from over US$60/lb before the onset of the financial crisis, did
not reflect current long-term fundamentals, ERA said.
Longer-term prices have trended sideways to lower but have held
above US$60/lb.
ERA is the world's fourth largest uranium producer, and operates
two mines in Australia's Northern Territory.
-By Elisabeth Behrmann, Dow Jones Newswires;
61-2-8272-4689 elisabeth.behrmann@dowjones.com
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