Below is are two extracts (1) TheDow Jones News Wires and (2) Interview with Alan Kohler and John Borshoff - CEO of Paladin. Its possibly arguable whether we give two hoots what Gillard has to say about the Uranium industry, however what the CEO of Paladin has to say is very interesting. Below the Newswires is the full interview with John Borshoff. What could be interesting is the comments on Paladin looking at results from their neighbours and hinting that they may use take advantage of the juniors under distress...even though MLS haven't got their licences renewed yet, so highly premature, who's to say they may not be a potential takeover target in the future.
DJ Australia Prime Minister, Uranium Executives Defend Industry20/03/2011 01:51PM AEST SYDNEY (AFP)--Prime Minister Julia Gillard and senior executives in Australia's uranium industry have insisted the major producer will withstand the Japanese nuclear crisis despite a slump in shares.
Although Australia uses no nuclear power, it is the world's third-ranking uranium producer behind Kazakhstan and Canada, exporting some 9,600 tons of oxide concentrate annually worth over A$1.1 billion (1.09 billion US).
It also holds the world's largest reserves of uranium--the most widely used nuclear fuel--with 23% of the total, according to the World Nuclear Association.
Perception of the nuclear industry has been seriously hurt since the Fukushima No. 1 plant in Japan was crippled eight days ago by an earthquake and tsunami.
But Gillard said the crisis would not affect Australian uranium sales.
"What is happening in Japan doesn't have any impact on my thinking about uranium exports," she told Sky News.
"We do export uranium and we will continue to export uranium.
"Countries around the world will make their own choices about how they source their energy."
Japan is an important customer of Australia, as is China, which last week ordered safety inspections of its nuclear plants and suspended approval of new projects.
China currently operates 13 nuclear plants and is building more than two dozen others--estimated at 40% of all plants being built worldwide.
Other major markets for Australian uranium oxide include the United States and the European Union.
But senior executives at Australia's top uranium companies insist the industry is resilient and will continue to grow.
Paladin chief executive John Borshoff said the sell-off was an over-reaction.
"If you look at it in context, it is an industry that sits far ahead of any other in terms of safety and it has achieved that record since only starting virtually in 1970," he told the ABC's Inside Business on Sunday.
"There's this phobia about nuclear, that when anything happens it generates a reaction like nothing else.
"The investors are not quite understanding that the nuclear industry will survive. The industry will learn and become even safer.
"If you think Japan is going to give up nuclear, then I don't know what is going to replace that."
Australian Uranium Association chief executive Michael Angwin said the market reaction was predictable, but the industry would survive.
"The factors which were driving the demand for Australia's uranium and the demand for nuclear power last Friday are still the same today," he said.
ALAN KOHLER, PRESENTER: Well as Tom mentioned, the uranium sector was hit hard this week as events spiralled out of control at the earthquake ravaged Fukushima nuclear power plant.
In the space of a week investor perception of uranium seems to have gone from a possible replacement of coal-fired power to something of a pariah amongst alternative energy sources.
I spoke to one of the pioneers of Australia's uranium industry and one of its leading players now, John Borshoff, who watched his Paladin Energy drop almost a billion dollars in value this week.
John Borshoff, I read a quote in a London newspaper from a German analyst on Friday. He said that uranium's gone from being part of the green future to being a dangerous relic of the cold war. Now, even if you don't go for an extreme view like that, I mean you'd have to say that there's greater risk now associated with nuclear energy.
JOHN BORSHOFF, PALADIN ENERGY: Well, if you look at it in context, Alan, it's an industry that sits far ahead of any other industry in terms of safety, and an industry that has achieved that record having only started in virtually 1970. And there is this phobia about nuclear which every time something occurs, it generates a reaction completely unlike any other sort of oil disaster or an earthquake, even, and you've got to see the whole sort of reaction in that context.
There's a latent sort of fear of nuclear and anything that juggles it, all of the what I call luddites come out, and come back on their sort of ideological bench.
ALAN KOHLER: Well, it's hardly luddites. I mean, there's people taking iodine in Tokyo streets. They're queuing up at Narita Airport to get out. I mean, it's pretty serious isn't it?
JOHN BORSHOFF: There's a lot people that believe that these units will be stabilised, and the main containment is intact. The spent rod pools will be filled. There has been some release. This release is by far still within human capacity to take, and the whole issue is it's still an open ended book and there's no sort of conclusion that's happened.
But if it turns out like I feel, that these units will be stabilised, you've got a facility that, you know, basically remained intact having, uh-um survived something which is 16 times greater than its design capacity. Essentially, the issue arose has been on failure of pumps which were flooded and in generating machines.
ALAN KOHLER: We all know that capitalisation has lost about a billion dollars, or almost a billion dollars. I mean, clearly investors are factoring in greater risk. There's a perception among investors that there's more risk.
JOHN BORSHOFF: Yes there are, but the investors are not quite understanding that the nuclear industry will survive, where most of the developed countries their contribution to electricity is at 20 per cent and more. You've got a- All of these just can't do away with a fuel mix that includes nuclear.
ALAN KOHLER: So is your position basically that it will all blow over?
JOHN BORSHOFF: No, I think that the position of all sensible people is that the industry will learn, and it will become even safer, and if you think Japan is going to give up its nuclear generating, well I don't know what's going to replace that.
ALAN KOHLER: Where do you send the uranium from Langer Heinrich in Namibia?
JOHN BORSHOFF: As you know, just starting on our global distribution of sales, we're sitting at number nine in the world, and essentially it's in US, parts of Asia - not including Japan - and China, but eventually we will hope to have a spread across all the nuclear countries.
ALAN KOHLER: I think China said this week that it was suspending approvals for 25 reactors in China. What's your understanding of how the Chinese now feel? What's their attitude now?
JOHN BORSHOFF: Underlying, they have no thoughts of even slowing down and as a responsible nuclear economy now, of course they've got to see what's happened in Japan, see from that what they can modify to improve things even more and continue on with their programs.
ALAN KOHLER: So are you seeing any changes at all in your order book?
JOHN BORSHOFF: No. Absolutely not. Our order book is growing. We're holding inventory. We've always believed that we're in a rising market. Those shortages that have been around are not disappearing. Those reactors will keep on burning fuel, and they're making money, they're making a huge amount of electricity safely and these will keep on burning uranium for the next 60 years.
ALAN KOHLER: Have you got plenty of cash on hand?
JOHN BORSHOFF: Yes. We've got $250 million. We're getting into a cash-flow positive in the next quarter and on our projections we'll be doing very well for fiscal 12.
ALAN KOHLER: So are you seeing this volatility, this shake out, as an opportunity to pick up some more uranium deposits cheaply?
JOHN BORSHOFF: Yes, we ... I mean, our strategy is to strengthen ourselves as an independent - which we're the only one in the business - and I think the juniors will suffer quite a bit. And for the few remaining good projects that are around, I think it does make a good opportunity, particularly as we're going for increasing our production from existing projects that we have and strengthening our project pipeline for a future which we feel is assured.
ALAN KOHLER: You've got 20 per cent of Deep Yellow which has a deposit near yours ...
JOHN BORSHOFF: Yeah...
ALAN KOHLER: Do you think you'll buy more of that?
JOHN BORSHOFF: Well, it's always there. You know, we're always looking at results that are coming out of those properties that are adjacent to ours, and at the moment we're quite happy keeping the status quo.
ALAN KOHLER: Just talking to some of the junior explorers, that I've been doing, they're clearly worried because they have to raise a lot of money to develop the deposits that they've found, but the market?s now turned against them. Are you seeing that as further opportunity to take advantage of their distress, as it were?
JOHN BORSHOFF: Yeah. Oh look, that's the irony of it all. I believe the uranium prices will increase over the next three months. The shortages that are there cannot be discounted. The supply/demand dynamic is still there, and again, ironically enough, it'll strengthen Paladin's position, because I believe that the projects that are on line will come in later than sooner.
They are anyway coming in later, and with a skittish financial market that doesn't quite understand this complicated way in which uranium is sold, it'll make it difficult for the juniors without a profile in the business to get to raise enough funds.
ALAN KOHLER: So to sum up, you basically see this whole thing as an opportunity, do you?
JOHN BORSHOFF: I do, yes. I see it as a- as a situation where Paladin has been preparing itself to be in a situation where it's got two young growing mines producing, and there has been no new mining operations been established over the last 20 years.
Kazahkstan is the only performer, at Kazatomprom, and we think we're exceptionally well placed for a demand on the existing and growing fleets, which still remains largely uncovered.
ALAN KOHLER: Well, thanks for joining us, John Borshoff.
JOHN BORSHOFF: No, not at all, pleasure. Thank you, Alan.
MLS Price at posting:
3.4¢ Sentiment: Hold Disclosure: Held
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