Equinox may spin off Zambian uranium unit February 13, 2006By...

Equinox may spin off Zambian uranium unit
February 13, 2006

By Stewart Bailey

Cape Town - Equinox Minerals, which is developing Africa's biggest copper mine, was considering spinning off a uranium unit that could produce as much as 22 million pounds of the radioactive metal, chief executive Craig Williams said on Saturday.

"It's one of the options we're considering," Williams said in Livingstone, Zambia. "At the moment, the market's not giving it any value."

Equinox, which is based in Perth, Australia, will produce a maximum of 188 000 tons of copper annually from Lumwana in northern Zambia over the first five years of the mine's life.

The deposit also contains as much as 22 million pounds of uranium, which can be mined alongside the copper and processed separately. The price of the metal has surged almost fourfold since the end of 2002.

The company would only decide what to do with the uranium - whether to sell it, mine it or spin off the Zambian uranium assets - after July, once the construction of the Lumwana copper mine had begun, Williams said. Lumwana would cost $453 million (R2.8 billion) to develop.



An earlier feasibility study showed that a separate uranium mine and processing plant would make a "small" profit at a uranium price of $11 a pound, Williams said. The metal currently trades at $37.50 a pound, according to Metal Bulletin.

Nuclear reactors being built in China, India and Russia would drain uranium stockpiles this year amid a production shortfall, Nufcor International, the world's largest trader of the metal, said in December. Power stations used most of the 175 million pounds of the metal consumed each year, while mines produced 105 million pounds. - Bloomberg