uranium comes under notice the australian

Uranium plays are getting warmer


Robin Bromby | November 19, 2007

SPOT uranium prices are slowly but surely regaining ground after the big post-June dip, adding another $US2/lb last week to stand at $US92. That's still a long way down from this year's peak of $US138/lb but pretty good compared with $US20/lb in January 2005.

For all those who have put their shirts on one of the 280 or so listed companies that hold uranium plays, there's some good news. The latest figures from Geoscience Australia show a hefty increase in the amount of yellowcake out there waiting to be produced.

The federal agency says its estimate of recoverable uranium able to be extracted at less than $US80/lb has risen 34 per cent from the 2006 figure of 714,000 tonnes to 953,000 tonnes in August. That includes what it terms "reasonably assured resources", which account for 27 per cent of known global uranium that can be mined below the $US80 figure.

Most of the rise has come from increases in resources at Ranger and Rum Jungle in the Northern Territory, Mt Gee in South Australia, and Valhalla and Westmoreland in Queensland.

If you add inferred resources mineable at less than $US80, the total Australian resource comes to 1.53 million tonnes. Of course, much of the 953,000 tonnes will be produced at well below $US80/lb (and that doesn't include uranium found overseas by Australian companies).

It was reported during the week that China was stepping up uranium exploration at home and had targeted Australia, Kazakhstan and Niger as key foreign exploration targets, while The Guardian says Mitsui has set itself the target of acquiring stakes in uranium mines in Australia and elsewhere.

This Japanese trading house - alive to the part nuclear power will play in reducing greenhouse gases - recently invested $US245 million in a uranium mine in Russia's Far East.

So perhaps Pure Speculation, which has been sceptical - to say the least - about the uranium investment frenzy, should wipe the smile off its face and pay a bit more attention to the uranium sector.