Uranium price worrisome
The Bank of Namibia’s governor Ipumbu Shiimi this week expressed concerned over the price at which uranium was trading, and indicated that it could curtail growth significantly in the mining sector. Another issue of concern was the expected increased output from the Husab mine.
Said Shiimi: “If commodity prices fall, especially uranium, the situation will not be good for Namibia. The uranium price is quite important for Namibia and if the price falls further, it will become quite an obstacle for the other [two existing] uranium mines.
“We hope the price will pick up,” he said.
“The Namibian economy is expected to grow by 2.5% in 2016 from 5.3% in 2015 but is projected to improve in 2017. Risks remain and include low commodity prices and the persistent drought,” he continued.
IJG economist Rowland Brown at a recent briefing hosted a fortnight ago by the finance ministry also expressed his concern over the declining price of uranium. Stating his opinion at the time, he noted that the Husab mine producing at full capacity could possibly put either Rössing or Langer Heinrich out of business.
“Uranium production increased, year-on-year, owing to low base effects, but declined, quarter on quarter, during the period under review. Uranium production increased by 13.6% to 1 009 tonnes, on a yearly basis, during the second quarter of 2016. The increase was mainly due to low base effects, owing to mechanical challenges experienced during 2015. On the contrary, production declined on a quarterly basis by 10.7% during the period under review, mainly due to water constraints, which affected production negatively. Furthermore, international uranium prices also declined by 25.2%, year on year, to an average of US$27.51 per pound over the review period, compared to the corresponding quarter in 2015, due to oversupply of uranium in the global market, the Bank of Namibia,” said in its quarterly report for September.
Uranium oxide by close of business yesterday traded at US$18.50 per pound. Uranium traded above US$30 per pound but has since declined steadily.
The outlook for sustained low uranium prices however remains positive, a recent Bloomberg article suggested.
Prices aren’t factoring in the pace at which inventories will disappear in coming years, according to David Wang, an analyst at Morningstar. “We’re all surprised by how low it’s gotten, especially considering the bright prospects going forward,” Wang said. He expects uranium to more than double to about US$65 a pound by 2019 from US$28.25 now.
Japan halted all nuclear energy production after an earthquake and tsunami led to meltdowns at the Fukushima Dai-Ichi power plant. The island nation has restarted four of its 42 operable reactors, according to the World Nuclear Association.
“Near-term perceptions are based on psychology or emotion,” Adnani said. “The positive long-term fundamentals don’t reconcile with the short-term price.”
OGONE TLHAGE
Said Shiimi: “If commodity prices fall, especially uranium, the situation will not be good for Namibia. The uranium price is quite important for Namibia and if the price falls further, it will become quite an obstacle for the other [two existing] uranium mines.
“We hope the price will pick up,” he said.
“The Namibian economy is expected to grow by 2.5% in 2016 from 5.3% in 2015 but is projected to improve in 2017. Risks remain and include low commodity prices and the persistent drought,” he continued.
IJG economist Rowland Brown at a recent briefing hosted a fortnight ago by the finance ministry also expressed his concern over the declining price of uranium. Stating his opinion at the time, he noted that the Husab mine producing at full capacity could possibly put either Rössing or Langer Heinrich out of business.
“Uranium production increased, year-on-year, owing to low base effects, but declined, quarter on quarter, during the period under review. Uranium production increased by 13.6% to 1 009 tonnes, on a yearly basis, during the second quarter of 2016. The increase was mainly due to low base effects, owing to mechanical challenges experienced during 2015. On the contrary, production declined on a quarterly basis by 10.7% during the period under review, mainly due to water constraints, which affected production negatively. Furthermore, international uranium prices also declined by 25.2%, year on year, to an average of US$27.51 per pound over the review period, compared to the corresponding quarter in 2015, due to oversupply of uranium in the global market, the Bank of Namibia,” said in its quarterly report for September.
Uranium oxide by close of business yesterday traded at US$18.50 per pound. Uranium traded above US$30 per pound but has since declined steadily.
The outlook for sustained low uranium prices however remains positive, a recent Bloomberg article suggested.
Prices aren’t factoring in the pace at which inventories will disappear in coming years, according to David Wang, an analyst at Morningstar. “We’re all surprised by how low it’s gotten, especially considering the bright prospects going forward,” Wang said. He expects uranium to more than double to about US$65 a pound by 2019 from US$28.25 now.
Japan halted all nuclear energy production after an earthquake and tsunami led to meltdowns at the Fukushima Dai-Ichi power plant. The island nation has restarted four of its 42 operable reactors, according to the World Nuclear Association.
“Near-term perceptions are based on psychology or emotion,” Adnani said. “The positive long-term fundamentals don’t reconcile with the short-term price.”
OGONE TLHAGE
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