Wednesday, 27 June, 2007

by Christopher Donville and Gavin Evans
Bloomberg

Uranium mining stocks including Paladin Resources Ltd. and Energy Resources of Australia Ltd. fell in Sydney on concern the price of the radioactive mineral may have peaked.

Shares in Paladin, which mines the metal in Namibia, fell 5.4 percent to A$8.09, the lowest close in two months. Energy Resources, which produces more than a 10th of the world supply from its Ranger mine in Australia's Northern Territory, also dropped 5.4 percent to A$18.95, a two-week low.

The slide followed declines in North America overnight after Ux Consulting Co., a uranium-pricing service, said in a weekly market report that `the number of motivated buyers has declined,' possibly prompting some sellers to withdraw supplies from the market. Shares in Cameco, the world's biggest uranium producer, fell 5.5 percent to C$52.05 in Toronto yesterday, the biggest decline in five months.

The uranium market `is not as overheated as it once was,' Greg Barnes, an analyst at TD Newcrest Inc. in Toronto, wrote in a note to clients yesterday.

The price of uranium has leveled off after tripling in the past year on speculation that supplies of the radioactive metal may not be sufficient to satisfy demand. Nuclear power's popularity has grown as governments from the U.S. to China seek to generate more energy without adding greenhouse gas emissions.

Uranium spot prices tracked by Denver-based TradeTech LLC have been at about $138 a pound since June 1. Roswell, Georgia- based Ux Consulting said the spot price has been at $136 a pound for two weeks.

The decline in Cameco's shares was the biggest since Oct. 23, when the Saskatoon, Saskatchewan-based miner said its unfinished Cigar Lake uranium project in the northern part of the province had flooded.