Paladin punished on weak production

Shares in Africa-focused miner Paladin were punished after it reported a fall in uranium production amid weak market prices, despite record sales for the September quarter. Paladin produced 1.24 million pounds of uranium in the three months to September 30, a 15 per cent decrease compared to 1.46 million pounds in the previous quarter. The fall was due to shutdowns at Paladin’s operations in Namibia and Malawi, including a ground movement that significantly affected the Malawi mine that reduced its production by 30 per cent. Paladin shares were down 8.5 cents, or 5.11 per cent, at $1.485 by 1534 AEDT. Sales of more than two million pounds and revenue of $US102.74 million ($A96.17 million) were a record for the quarter.

Chief executive John Borshoff said the persistent deterioration of the uranium spot price since the Fukushima nuclear accident in March was affecting financial returns.
The effects of Fukushima on the industry had highlighted its inability to sustain production growth in an orderly way, he said. Uranium prices had recently fallen back to levels of about $US50 per pound, last seen after Japan’s nuclear accident, causing grief to struggling Australian producers such as Paladin. However, Mr Borshoff remained upbeat about the industry. He said most nuclear energy countries remained committed to source uranium, with the exception of Italy and Germany.