Paladin boss looks past meltdown Barry Fitzgerald May 18, 2011
PALADIN chief executive John Borshoff believes the meltdown at Japan's Fukushima nuclear power plant was a "spectacular kick in the teeth" for the uranium and nuclear industry.
But the chief of the Perth-based African uranium producer also believes that the "overall impact on the industry will be minimal".
He told investors on a conference call for Paladin's previously released March-quarter update, the industry would now move on, taking the lessons from Fukushima to "make this technology even safer than its previous enviable record".
Investors have yet to share Mr Borshoff's view, with uranium equity values down by more than 30 per cent on their pre-Fukushima levels. Paladin itself is down 34 per cent to $3.15 a share from its pre-Fukushima level of $4.83 a share.
"It now appears the sector has been oversold significantly, but the market remains cautious," Mr Borshoff said. Countries such as Japan and Germany have either slowed planned nuclear power expansion programs or closed older plants pending a full understanding of Fukushima's inability to cope with the earthquake and tsunami on March 11.
But according to Mr Borshoff, the "major drivers" to the nuclear revival such as China, India, Korea, Russia and the Middle East "remain committed".
He said opportunities for world power utilities to secure future uranium supplies by striking equity deals in mines were disappearing. Paladin itself has secured the Aurora project in Canada, Russian interests are taking control of Mantra's uranium project in Tanzania and control of the Husab project in Namibia is shaping up as a shoot-out between Rio Tinto and Chinese interests.
"The impact of all these developments has in my opinion still not reverberated through the market," Mr Borshoff said. The uncertainty caused by Fukushima would make it more difficult for exploration companies to raise equity funds and develop new projects.
The spot market price for uranium sank to below $US50 a pound soon after the Fukushima meltdown, but uranium prices are now rising. It was last quoted at $US57.75 a pound, an increase of $US1.25 in the past week.
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)