Uranium Week: Another Strong Month

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September volumes did not quite reach the level of August but were solid nonetheless and resulted in a US$1.25/lb increase in the spot uranium price.

-More strong monthly volumes
-Further increase in spot price
-Rio looking to sell Rossing, maybe

By Greg Peel

At 5.9mlbs U3O8 equivalent, September’s volume in the spot uranium market did not reach August’s record-breaking 8.4mlbs but was healthy nonetheless. Buyers clearly outnumbered sellers, given industry consultant TradeTech’s spot price indicator rose US$1.25 in the month, or 5%, to US$27.65/lb as at September 30.

The final week of the month was a little slower, featuring nine spot transactions totalling 1mlb U3O8 equivalent and a drop in spot price to Friday of -US35c to US$26.30/lb. Activity slowed, TradeTech reports, because buyers are preoccupied with a utility’s tender request for delivery of 1mlbs U3O8 between now and March.

A utility also entered the term market last week seeking offers for delivery of 1.8mlbs U3O8 over 2021-27. In a reflection of the state of the world in 2018, the utility has placed a caveat on any deal in that the uranium must be able to be legally imported into the USA and is legal for use in US reactors without the imposition of any tariffs, duties, or similar charges other than those that would be charged if such material were of US origin and was being imported into the USA on the delivery date.

The caveat reflects a state of flux in the US uranium/nuclear energy markets at present as the government considers its positions on tariffs and/or mandated quotas on domestic-only purchases as is taking its time in doing so.

Another utility continues to consider offers for delivery of 10mlbs U3O8 for delivery 2021-30. TradeTech has lifted its month-end term price indicators to US$30.00/lb from US$29.50/lb (mid) and US$32.00/lb from US$31.00/lb (long).

Namibia

The Namibian government has confirmed that Australian and UK-listed diversified miner Rio Tinto ((RIO)) is discussing the sale of a majority share of its Rossing uranium subsidiary to the China National Nuclear Corp. The Namibian spokesman would not go into detail but assured that talks were advanced, while the word from Rio Tinto is that it’s all just rumours and speculation.

CNNC had previously held talks with Australian-listed Paladin Energy ((PDN)) regarding a takeover of Paladin’s Langer Heinrich mine in Namibia, which is currently in care & maintenance due to weak uranium prices. CNNC ultimately failed to exercise its option and Paladin has secured sufficient finance to suggest that one day Langer Heinrich might be switched back on.

Rossing is 69% owned by Rio Tinto, 15% by the Iranian government, 10% by the South African government, 3% by the Namibian government and 3% by other Namibian interests. The board meetings must be fun.

The Namibian government nevertheless holds 51% of the voting rights, and thus must approve any sale.

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