Sunday, October 12, 2014

Uranium prices are too low to open new mines



The player in question is France's Areva. Which said that current uranium prices are too low to go ahead with one of the company's major development projects globally: the Kiggavik uranium deposit in Canada's northern Nunavut Territory.

Last week Areva announced that it has submitted a final environmental impact statement to local Nunavut authorities for a potential mine at Kiggavik. A key step in moving the project toward production.

But in the same news release, Areva said that uranium prices are too low to "favour a construction decision" for the project. Leaving the timing of mine building here uncertain.

This is exactly what I have been talking about regarding the uranium price. The cure for low prices is low prices. We have seen other stories where the production of uranium is being curtailed because the price is to low to make money. Now we are seeing one of the biggest players in the uranium space not moving forward with a project because the price is to low to justify a decent return on investment. In the meantime existing supply of uranium is being burned up in reactors and we have more reactors being built than pre-Fukushima. This is actually ggod news if you are specualting on the uranium price moving higher.

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