Monday, 5 February, 2007

by Nigel Wilson, Energy writer
The Australian

THERE will be a renewed buzz around uranium hopefuls in the next week after an upward move in uranium spot prices after a six-week stalemate.
The spot uranium price indicator announced by UxC on January 29 and by TradeTech's Nuclear Market Review on January 31 rose to $US75/lb U3O8, an increase of $US3/lb.

TradeTech reported low transaction volume for January, with only one spot transaction being reported: a modest quantity of less than 5000lb U3O8 equivalent.

The publication's nuclear market review editor, Treva Klingbiel, said sellers remained convinced prices would rise.

Record price movements in December led analysts to suggest $US100/lb was not too far away.

The latest move has reignited expectations of further price increases this month.

Australia's biggest uranium exporter, Rio Tinto subsidiary Energy Resources of Australia, announced last week that it expected uranium prices to continue to rise this year in the light of increasing global demand.

According to ERA, the uranium oxide price received in 2006 rose to $US18.36/lb compared with $US16 in 2005, and ore sold climbed 1.3 per cent to 5760 tonnes.

ERA, which sells most of its output under long-term contract, expects sales this year to be similar to those of last year and uranium prices to continue rising.

Rio Tinto chief executive Leigh Clifford, who retires in May, said last week that the giant resources group could take advantage of skyrocketing uranium prices without making acquisitions.

Rio recently rescinded a previously announced plan to sell its Sweetwater uranium mill in the US and has reopened discussions with Aboriginal landowners about its shelved Kintyre project in Western Australia's Rudall River National Park, which is estimated to contain about 36,000 tonnes of U308.