too many u mines in namibia, page-20

http://www.theaustralian.news.com.au/story/0,25197,23583543-5005200,00.html

ERA tips strong uranium demand

April 23, 2008
THE world's third-largest uranium producer, Energy Resources of Australia, expects future demand for the energy source to remain strong amid growing need for electricity.

ERA, which is majority-owned by Rio Tinto, produced almost 10 per cent of the world's uranium in 2007 from its Ranger mine in the Northern Territory.

"The forecast for continued growth in demand for electricity, energy security issues, increases in fossil fuel prices, and most significantly heightened awareness of climate change -- all continue the focus on nuclear power and the demand for uranium," chairman David Klinger told the company's annual general meeting in Darwin.

Dr Klinger said uranium prices "remain strong", kept high by a shortage of near-term primary supply and the depletion of secondary market inventories.

"The likelihood of carbon emission costs being imposed on fossil fuel energy production also looms as another factor keeping prices high," he said.

ERA's averaged realised price for uranium in 2007 was $US25.06 per pound, compared with $US18.36 per pound in 2006, up 36 per cent.

The uranium market price rose from $US72 per pound at the end of 2006 to $US95 in May last year, where it remained for the rest of the year.

Dr Klinger said ERA's realised price for uranium continued to be below the current market price because its contracts were negotiated several years ago when prices were considerably lower.

He said the long-term uranium market price remained more stable than the spot price, which rose from $US72 per pound at the end of 2006 to a high of $US136 in June last year before falling back to $US89.50 at the end of 2007.

Dr Klinger said ERA was well positioned to benefit from the strong demand for uranium worldwide and actively sought to expand and extend production from its resources.

The company has several planned projects including the construction of a laterite treatment plant and a radiometric sorter, a $57 million extension of the operating pit, and studies into a further expansion of the open pit.

Shares in ERA closed down 40c, or 2 per cent, to $19.75.

AAP