Paladin still pumping millions into Langer Heinrich

31 July 2020 | Business

Jo-Maré Duddy - Paladin Energy, owner of 75% of Langer Heinrich, will spend around N$87 million on the care and maintenance, as well as it restart plan for the mine in Namibia and uranium marketing in its new financial year.

In its quarterly activities report released yesterday, Paladin forecast expenditure of US$5.2 million on Langer Heinrich in its 2021 book-year which started on 1 July.

Of this, US$3.1 million will be dedicated towards the care and maintenance of Langer Heinrich. The mine ceased production in May 2018 due to the persistent low uranium price. More than 300 workers were retrenched when Langer Heinrich was put on care and maintenance.

Paladin, an Australian-based global uranium miner, will spend US$2.1 million on Langer Heinrich’s restart plan and uranium marketing in its 2021 financial year.

In its previous book-year, Paladin spent US$6.8 million on Langer Heinrich – US$3.7 million on care and maintenance and the rest on the restart plan, as well as uranium marketing.

Restarting mine

Paladin at the end of June said it needed US$81 million to restart Langer Heinrich.

The company said its restart plan is completed and “marks the completion of an extensive work package aimed at delivering a reliable mine restart to bring the globally significant Langer Heinrich Mine back into production under the right uranium pricing environment”.

Yesterday, Paladin said its current cash position of US$34.2 million provides financial flexibility. However, the company will “only consider a restart when it secures an appropriate term-price contract with sufficient term and value to deliver an appropriate return to all stakeholders”.

According to Paladin, The TradeTech weekly spot price average for the June 2020 quarter was US$32.71/lb, up 32% from the March quarter.

“Higher spot market prices are expected to flow through to long-term markets, with increased activity supporting price improvements,” Paladin said.

“Uranium inventory levels have continued to decline with overall US inventory levels (including suppliers) the lowest observed since 2012. In Europe, utility inventory levels have declined by 20% since the end of 2015.”