Past quarter full of ups and downs for Langer Heinrich

A MIXED bag of results marked uranium miner Langer Heinrich’s second quarter: a dip in crushed volumes, sales and price were offset by slightly better production and a much improved recovery.

Despite the market being less friendly than in the first quarter, Paladin Energy, through its wholly owned Langer Heinrich, raked in US$22,8 million from sales. That brings sales for the half-year to June 30 to US$47,5 million, or nearly N$380 million.Releasing second quarter results, Paladin Energy Chief Executive Officer John Borshoff yesterday said the mine exceeded its production target for the fourth consecutive quarter.Langer Heinrich produced 693 116 pounds of uranium oxide from April to June, six per cent more the 650 000 pounds pinned down for its Stage I nameplate design production. Quarterly production was also 1,1 per cent higher than that of the first quarter of 2009.Crushed tonnes for the second quarter, however, dropped by 9,3 per cent from the 425 030 tonnes of the first quarter.Overall recovery, though, improved from 74,5 per cent in the first quarter to 82,3 per cent the following quarter.Borshoff attributed the improvement to increased process plant efficiency, due to better settling in the Counter Current Decantation (CCD) circuit and increased Ion Exchange (IX) capacity.The mine sold 445 000 pounds of uranium oxide during the period, nearly two per cent less than in the first quarter. Worsening matters, Langer Heinrich had to sell its uranium at an average price of US$51,27 per pound, which was 5,6 per cent lower than the first quarter average price.In US dollar terms, sales therefore plummeted by 7,7 per cent from the US$24,7 million sold from January to March.Commenting on highlights during the second quarter, Borshoff said the Paladin Board approved US$71 million for its next stage of development.Stage III, to be completed by September next year, plans to increase production by 40 per cent to 5,2 million pounds of uranium oxide per year. At the current ore reserve and stockpile levels, Langer Heinrich has a life of 12 to 13 years. Stage III could increase this to 20 years, depending on the success of an infill drilling programme, Borshoff said.In the past quarter, Paladin has also been added to the MSCI Global Standard Indices for Australia. MSCI is a leading global benchmark provider of equity (international and US), fixed income and hedge fund indices. It provides global equity indices, which, over the last 30 plus years, have become the most widely used international equity benchmarks by institutional investors. The company has also been added to the Dow Jones Africa Titans 50 Index, which measures the stock performance of the 50 leading companies that are headquartered or generate the majority of their revenues in Africa.Turning to the uranium market, Borshoff said despite the continuing favourable environment for nuclear power worldwide and long-term uranium prices remaining at historically high levels, global uranium production only increased by 6,5 per cent in 2008 compared with 2007.’In contrast, uranium production in Namibia increased by 52 per cent to 5 152 tonnes, making Namibia now the fourth-largest producer and drawing attention to Africa as a growing uranium supply source,’ he said.The small increase in global uranium production should be compared with world uranium requirements of 76 110 tonnes of uranium oxide in 2008, Borshoff said. ‘This will increase as new nuclear power plants are commissioned worldwide while simultaneously the contribution of secondary supply sources diminishes significantly over the next five years, exposing the increasing supply shortfall that will increasingly have to come from mining and which is expected to propel the market upwards in the future.’jo-mare@namibian.com.na