Sunday, 9 September, 2007

The West

Paladin Resources Ltd says it does not expect an over supply of uranium to come on to the market, after the United States President George W Bush expressed his pro-nuclear stance this week.

The company’s chief executive, John Borshoff, said there was “definitely not” an over-supply of uranium about to saturate the marketplace, despite a recent fall in price surrounding supply concerns.

He told ABC TV the increase in uranium price would continue on its upward path.

“I think the dynamic of the volatility is a five-year, almost continuous rise,” he said.

“I foresee it will surpass the peaks within 12 to 15 months.”

In the last three years, there had only been a five per cent increase in overall production of uranium, and in the next three years, there would be few uranium mines coming on board, he said.

It comes after the Mr Bush this week expressed his stance as pro-nuclear, saying if one cared about greenhouse gases that they would be in favour of nuclear power.

Mr Borshoff said it had taken a long time for the United States to become clearly pro-nuclear.

“After three-mile island and chernobyl, the whole US nuclear industry just retracted,” he said.

“The industry at large always said that if only the US would indicate to grow it’s industry it would be certainly two swallows make spring.

“It’s basically a declaration that all world economies are fully supportive of (uranium).”

Paladin purchased some reserves in Queensland via the $1.16 billion takeover of Summit resources, saying it was “certain” it would be mining uranium out of Australia.

“As sure as today is Sunday, we will be mining uranium out of Australia, out of the states of Queensland and Western Australia,” he said.

“It is one of those inevitabilities that you cannot have a whole world starving in the biggest, hugest energy crisis that’s ever faced civilisation, and we’re exporting as much coal and gas as one likes and then making some statement about uranium when the federal Labor is saying that this has to stop.

“I think it’s just a matter of time and a bit of sense coming back into the system.”

Mr Borshoff also commented on the company’s share price, saying it would bounce and respond to any threat from predators.

“We believe there is an opportunity to come out of this huge vacuum that was caused where essentially the industry was asleep at the wheel for 20 years, and if Paladin does get absorbed into somebody else, I think it would be a shame for the supply industry,” he said.

In connection to future acquisitions, he said, the company had always specified it wanted a more global footprint.

“That is in keeping with our whole strategy that we will probably postpone for a little while.

“But we are always on the lookout for opportunities, particularly how we see the market and I don’t believe the market will be in supply balance for 10 to 20 years.”

The company’s Heinrich mine in Nambia had suffered some bad luck on vital pieces of equipment, sparking a five-month delay, but was on track to be at full production next year.

“We believe we will be at full production early 2008 and, essentially, we aren’t that worried in terms of mid-term.”