Uranium miners cautious on new output, despite forecast shortfall

Tue Mar 8, 2016 1:09pm EST
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By Rod Nickel

TORONTO, March 8 (Reuters) - Several of the world's biggest uranium producers say they are taking a cautious approach to building new mines, preferring to shave expenses and wait for higher prices despite forecasts for a supply shortfall by the end of the decade.

France's state-owned Areva SA will trim 100 to 200 more jobs this year and stay out of the hunt for new mine exploration projects, Jacques Peythieu, Areva senior executive vice president of mining business, said in an interview from Paris on Tuesday.

"We are very focused to reduce our cost and to reduce our investment, to be able to manage this period of low price," he said.

France state-owned utility EDF is buying Areva's reactor arm, leaving the company to focus on uranium mining and fuel after struggling with losses and scant reactor sales.

Last year, Areva, the third-largest uranium producer, eliminated 500 jobs. It now employs about 4,000 people.

Spot prices of uranium, used to make fuel for nuclear power production, have been depressed since the 2011 Fukushima disaster in Japan, which led to the shutdown of that country's reactors and generated burdensome stockpiles globally. Demand is growing rapidly, however, with China in particular aggressively building reactors.

Areva is maintaining its exploration budget but is not interested in buying new projects, Peythieu said, adding that it will start building its Imouraren mine in Niger, with a capacity of 13 million pounds, once prices improve.

"What's important for us is profitability," he said.   Continued...