Paladin backs Malawi decision

Paladin Energy has backed its decision to place its Kayelekera uranium plant on care and maintenance in February and says the market fundamentals needed to restore it to economic production are now heading in the right direction.

Speaking at the Paydirt 2014 Africa Down Under Conference in Perth today, Paladin managing director John Borshoff said the 15 per cent increase in uranium prices since July was a strong sign that the market was improving.

He said the global new and restart momentum in nuclear reactors would grow from 435 in 2014 to 550 by 2025.

“What we will face is that the long-term market demand fundamentals for uranium require extraordinary growth in uranium supply and that favours a restart of our Malawi plant,” Mr Borshoff said.

In February, Paladin put its Kayelekera processing plant on care and maintenance after the market value for yellowcake dropped.

Mr Borshoff said the company’s decision to put production on hold was the optimal choice.

“The decision meant Paladin will be in the best possible position for a rapid production restart when market conditions allow this to be done properly,” he said.

“We have protected the long-term value of Kayelekera and the emerging structural supply shortfall from depressed prices and lack of new mines ensures the market factors for the plant’s re-opening are trending in the right direction.” 

Paladin released its financial report late last week, flagging a $338 million net loss for the full year.

It said much of the loss was attributed to a $242.19 million impairment of its Queensland exploration assets, alongside $43.4 million impairments in inventory at its Langer Heinrich uranium mine, and in addition to the halt in production at Kayelekera.

Paladin shares closed 1.1 per cent higher at 44 cents per share.