Uranium price pick-up holds key to kayelekera mine

Dual-listed miner, Paladin Energy Limited is still keeping its fingers crossed to see spot uranium prices on the global market rebound to profitable levels for it to resume uranium production at Kayelekera Uranium Mine (KM) in Karonga.

The company, through its subsidiary Paladin (Africa) Limited, stopped uranium production at Malawi’s largest investment venture two years ago due to tumbling price for uranium globally and placed the mine on care and maintenance.

But asked to forecast the future of the mine, KM general manager for operations, who is also senior company representative in Malawi, Alan Cumming explained on Wednesday that their position on the mine remains unchanged.

“I advise that our position remains unchanged that a sustainable uranium price is in the range of $70 to 75 per pound,” he said in a brief e-mail response.

Cumming said such an anticipated price range remains a key requirement for the company to consider resuming production at KM.

Business News internet search on Wednesday found that uranium spot price was at $34.50 (about K23 730) per pound as at January 8 2016, representing half of the desired price by Paladin to resume mining in Malawi.

Uranium was trading at $110 (about K75 662) per pound when the mining licence to develop KM site was granted in 2007.

But speaking in separate interview Wednesday, chairperson of the Malawi Natural Resource Justice Network (NRJN) Kossam Munthali said the delay by Paladin to resume production continues to raise eyebrows on the future of the mine.

He said with two years elapsing before re-opening, NRJM remains suspicious that perhaps the company might have resorted to leave Malawi for good.

“Now it is 2016 and probably they might have left for good unless they convince us. We see no future and hope,” said Munthali.

A recent World Bank analysis on Malawi said hopes for uranium to become a key export commodity for Malawi must be put on hold.

The bank said the global slump in uranium prices means that production is unlikely to resume in the immediate future.

Reuters News Agency reported on Tuesday that uranium prices are expected to outperform other commodities in 2016 and beyond as a global climate change deal and growing demand from Asia bolster the prospects of the nuclear industry.

Currently, nuclear power stations provide around 11 percent of the world’s electricity, but there is a likelihood that the share will increase as China and India expand their capabilities. n