15 Feb (NucNet): Cuts in uranium supply planned by two of the world’s biggest producers could create a significant increase in the uranium price, which has fallen by about 75% since the March 2011 Fukushima-Daiichi accident and is at a 12-year low, Paul Atherley, managing director and chief executive officer of Berkeley Energia, has said.
Mr Atherley told the 121 Mining Investment conference in Cape Town, South Africa, that the price increases could begin just as Berkeley Energia’s Salamanca uranium mine in Spain is coming into production.
Mr Atherley said both Cameco of Canada, the biggest listed uranium producer, and state-owned Kazatomprom of Kazakhstan, the biggest producer, have said for the first time they intend to cut production. “We think this could create, if the cuts are implemented fully, a significant increase in the uranium price just as we are coming into production.”
The Salamanca mine, in northwestern Spain, is the biggest of its kind in Europe and the only major uranium mine in the world to start construction in recent years.
According to Berkeley Energia, which is headquartered in London and listed on the London stock exchange, Salamanca could produce 4.4 million pounds of uranium a year at its peak during its planned 14 years of operation, although the company is searching for more deposits and that lifetime could yet be extended.
First uranium production is expected in the middle of 2019 following about 12 months of construction and six months of commissioning.
In December 2017 Mr Atherley said the Salamanca mine would be supplying nuclear utilities “all over the world”, particularly in the EU which has no domestic supply and buys uranium for its 129 commercial nuclear reactors from countries including Russia, Kazakhstan and Niger.
Berkeley Energia said Salamanca will account for 10% of Europe’s total uranium requirement and will be important to the EU’s security of supply.
Last year Berkeley Energia secured up to $120m in investment from Oman’s sovereign wealth fund for the construction and completion of the Salamanca mine. Mr Atherley said the project is “fully funded into production” and once in production will generate $150m of free cash flow.
He said the project will capitalise on beginning operations at the bottom of the uranium price cycle. ”We have made a decision that we want to pour concrete at the bottom of the cycle,” he said.
