Paladin revises down production forecast

A 12 per cent shortfall in uranium production has forced Subiaco-based Paladin Energy Ltd to revise down its forecast production for 2008 at it Langer Heinrich mine in Namibia.

The company now expects production for calendar 2008 to be between 2.45-2.6 million pounds of uranium oxide following a production shortfall of 240,000lbs in the first half of this year.

Previously the production forecast was pegged at 2.6Mlbs.

Paladin said problems with the plant's heat exchangers, used to leach uranium, was the main contributor of the shortfall

The company said June quarter production was 568,670 pounds of uranium oxide, 12 per cent below the plant's nameplate capacity of 650,000lbs.

Sales for the quarter were $37 million with 601,614lbs of uranium oxide sold at an average price of $US60 per pound.

Meanwhile the company remains bullish about the uranium price despite the spot price dropping from $US71/lb in March to $US59/lb at the end of June, and the long-term price indicator dropping $15 to $US80/lb.

"This market weakness which has existed for 6 to 8 months is regarded as temporary condition and strong evidence exists of a fundamental uranium supply shortage resulting from anticipated accelerating growth in global nuclear power coupled with relatively static production schedules in the mid term," Paladin said.