Uranium Yellow Cake is Making a Comeback

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The year of 2005 will be remembered by many in the Metals & Minerals Industry as a bonanza year. A year where metals prices surpassed forecasted numbers and made believers out of naysayers; a year in which producers of minor metals such molybdenum, uranium, and tungsten saw prices skyrocket to levels last seen only in the mid-1970’s. The recent growth of highs prices for mined metals has led to an increase in the exploration and development of new mines to produce these metals. The high commodities prices, coupled with technological advances in in-situ mining, comes in handy especially in the uranium industry after decades of falling mine production.

According to research by Industrialinfo.com, there are six active greenfield uranium projects in various phases of development that are expected to become operational by the end of 2008. These projects located in Australia, Kazakhstan, Malawi, Namibia, and South Africa have a combined capital investment value of more than $500 million. Paladin Resources, Limited (Subiaco, Australia) is leading the pack so far in uranium investment. Paladin is developing the Kayelekera Uranium mine (Koranga, Malawi), and the Langer Heinrich Uranium Mine situated about 90 kilometers from the coastal town of Swakopmund (Namibia).

Once in operation, the Langer Heinrich will be the eighth largest uranium mine in the world joining the ranks of Olympic Dam. Paladin also has two advance projects on hold ready to go: the Manyingee Uranium project (Onslow, Australia) and the Oobangooma Uranium Project (Oobangooma, Australia). And soon to be uranium producer, Southern Cross Resources (Toronto, Canada), recently lunched a feasibility study for a proposed $100 million Dominion Uranium mine (Klerksdorp, South Africa), which will be put into production by early 2007.

Our research also shows that there are sixteen active nuclear power plants scheduled to kick off construction as of early next year outside the U.S. Most of these projects are located in countries such as China, France, Russia, and India. Upon completion, these plants will add up to 6,000 megawatts in their grids. See related news article - Development of New Nuclear Generation on the Increase.

The demand for uranium to fuel these plants will continue to grow and consequently the spending on exploration and development of new projects. Some of the capital investment in the uranium industry in the next two years will be earmarked for expansion of brownfield mines, such as the Olympic Dam Uranium Mine, where owner BHP Billiton (ASX:BHP) plans to triple the uranium output to 12,700 tons of uranium per year. Given the increased reliance on nuclear power for electricity generation, one could say that a uranium production trend is emerging and the yellow cake is make a come back.

Industrial Information Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 years. IIR is respected as a leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.