Areva boosts uranium exploration

LONDON – French nuclear technology group Areva expects to double its exploration budget in the next two years as uranium prices stay strong, senior company officials say.

Areva bought Toronto-listed uranium miner Uramin for US$2,5 billion (N$18 billion) in July and more acquisitions are on the cards to meet strong demand for uranium, they say. “This is part of our action plan to increase the quantity of uranium we need,” Areva NP President and Chief Executive Luc Oursel told Reuters at the World Nuclear Association’s Symposium held in London last week.The French group has increased its exploration budget five times since 2004 and it will double it again within two years, Olivier Mallet, Senior Executive Vice President for Mining at the Chemistry Enrichment sector at Areva told the symposium.The price of spot uranium hit an all-time high at the end of June at US$136 per pound, but since then prices have drifted down to US$90.But Oursel said the spot price did not give a proper indication of the balance between supply and demand.Instead, the long-term price was seen staying firm this year at around the current level of US$95 per pound.The acquisition of Uramin adds significant resources to the Paris-listed group.Uramin is expected to produce 7 000 tonnes per year from 2012.Areva now has an annual production of 5 500 tonnes and Uramin will also give Areva more diversity with its deposits in Namibia, the Central African Republic and South Africa.In August, the South African government said it would raise the share of energy coming from nuclear power plants to 15 per cent of total energy supply from six per cent now.As part of the country’s proposed enrichment programme, it may compel local miners to first offer uranium to the state.”We would like to know as soon as possible what is going to happen as we are already in talks and signing contracts,” Uramin’s Nape Mojapelo, general manager for mining and new business in South Africa, told Reuters on the sidelines of the conference.”It could be a system similar to the diamond market where each company has to give the government a possibility to buy a certain percentage of its production,” he said.Nampa-Reuters”This is part of our action plan to increase the quantity of uranium we need,” Areva NP President and Chief Executive Luc Oursel told Reuters at the World Nuclear Association’s Symposium held in London last week.The French group has increased its exploration budget five times since 2004 and it will double it again within two years, Olivier Mallet, Senior Executive Vice President for Mining at the Chemistry Enrichment sector at Areva told the symposium.The price of spot uranium hit an all-time high at the end of June at US$136 per pound, but since then prices have drifted down to US$90.But Oursel said the spot price did not give a proper indication of the balance between supply and demand.Instead, the long-term price was seen staying firm this year at around the current level of US$95 per pound.The acquisition of Uramin adds significant resources to the Paris-listed group.Uramin is expected to produce 7 000 tonnes per year from 2012.Areva now has an annual production of 5 500 tonnes and Uramin will also give Areva more diversity with its deposits in Namibia, the Central African Republic and South Africa.In August, the South African government said it would raise the share of energy coming from nuclear power plants to 15 per cent of total energy supply from six per cent now.As part of the country’s proposed enrichment programme, it may compel local miners to first offer uranium to the state.”We would like to know as soon as possible what is going to happen as we are already in talks and signing contracts,” Uramin’s Nape Mojapelo, general manager for mining and new business in South Africa, told Reuters on the sidelines of the conference.”It could be a system similar to the diamond market where each company has to give the government a possibility to buy a certain percentage of its production,” he said.Nampa-Reuters