Thursday, 16 August, 2007

ABC Rural

The spot price of uranium suffered its biggest single plunge in nearly 40 years yesterday, with analysts forecasting further drops soon.

Market analyst Warwick Grigor, from Far East Capital, says the price fall has been caused by a temporary drop in demand for the metal.

But he says only companies producing lower grade uranium have any real cause for concern.

"What it means is that situations that are lower grade, like in the Northern Territory, they're the ones that will be feeling the heat a lot more because they're the ones that are high cost production," he said.

"But as far as the South Australian companies are concerned, they'll still make heaps of money at these prices and lower, so it's really a red herring to get worried about it."