Low uranium price continues to present major challenge

The currently depressed uranium price presents a major challenge to the members of the Namibian Uranium Association (NUA), which includes all mines and various exploration operations. NUA released a statement this week, stating that as a result of the above major stakeholders must be aware of the considerable risks at hand, and support the industry in its drive to manage the challenge until prices recover.

While the association warns of the challenges lying ahead, it also congratulates a decision taken by the Ministry of Mines and Energy at the end of last year. The Ministry lifted the moratorium placed in 2006 on the issuance of new exploration licenses for nuclear fuels. “After ten years, new developments in the Namibian uranium sector are now once again possible, and the industry wholeheartedly welcomes this commendable move by the Minister of Mines and Energy,” the statement reads. Furthermore the lifting of the moratorium is a “good example of how government and industry can work together to enable future success.”
NUA is confident though that the uranium price will not remain at the irrationally low level it is currently trading at, as analysts mostly predict.
“The Namibian uranium sector is therefore destined to be a major driver of economic development of our nation once prices have recovered, and the industry is looking forward to continue to make its contribution,” the statement continues.
According to the association mining is the backbone of the Namibian economy with uranium mining being a very important economic factor in the western Erongo Region. Currently the three opera-ting mines, Rössing, Husab and Langer Heinrich, play an important role in the socio-economic development of the region – so do the exploration projects of Bannerman Resources, Reptile Namibia, Zhonge Resources, Valencia and Marenica.
NUA furthermore reminds stakeholders and the general public that the financial situation of the Namibian uranium operations depends on the market value of their product being the uranium price.
“The prices of mineral commodities are cyclic and subject to volatility, thereby driving fluctuating operating margins for mining companies over time and uranium is no exception. Commodity prices can change quickly – both positively and negatively,” the statement continues.
The uranium price closed at the end of February at US$22.25 per pound.
This is a slight recovery compared to November 2016, when the price had hit an almost all time low of US$18 per pound.