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Supply constraints to boost uranium price, Froneman says
By: Matthew Hill
Published: 5 Feb 08 - 16:11

TSX- and JSE-listed uranium miner Uranium One CEO Neal Froneman on Tuesday echoed experts' forecasts that the uranium price would continue to increase over the medium term.

While demand for the nuclear fuel was set for strong growth as countries, like China, rolled commissioned more reactors, supply would underpin prices, he said.

"In the next five to ten years, constrained supply will drive the price increases, rather than the increases in demand," Froneman stated.

"I expect the uranium price to continue increasing over the medium term," he said.

While the uranium spot price had plunged in the second-half of 2007 to levels almost half of its June peak of $138/lb, long-term contracts had stabilised at levels around $95/lb.

The spot price was not truly representative of the long-term fundamentals of the radioactive metal, Froneman commented, addressing an audience at the Cape Town Mining Indaba.

On Monday, US consultancy firm Ux Consulting president Jeff Combs also said that the long-term fundamentals for uranium remained strong.