Mestena, a private mine in Texas, is set to auction 260,000 of the metal
CHRISIOPHER DONVILLE
Sun
Uranium prices, after surging this year because of concerns, may top a record high this week when a private mine in Texas auctions 260,000 pounds of the radioactive metal used to fuel nuclear-power plants.
Mestena. Uranium LLC of Corpus Christi is selling supplies from its Alta Mesa mine to the highest bidder as of Dec.15, said Dustin Garrow, president of ZB Marketing, a consultant in Littleton. Colo., coordinating the auction.
The price of uranium has risen 81 percent this year to $65.50 (all figures US) a pound because demand is rising and plower-plant operators are concerned that new supplies may not be available fast enough t to fuel new reactors planned for construction around the world.
-Bidding will probably come in around $68 to $70 a pound,”Kevin Bambrough, a strategist at Sprott Asset Management Inc. in Toronto who follows the uranium industry, said in a telephone interview. Uranium supplies are tight. Demand is strong.”
An underground flood in October at Cameco Corp.’s unfinished Cigar Lake mine in Saskatchewan has heightened concerns about available supply. Cameco, the world’s largest producer of uranium, has said it expects the flood will delay construction of the mine by at least a year.
Before the accident, the project was scheduled to open in 2008 and Saskatoon, Saskatchewan- based Cameco predicted it would supply as much as 10 per cent of the world’s uranium when it reached full production in 20l0.
Cigar Lake is 50-per-cent owned by Gameco, with the remainder held by ARENA Resources Canada Inc., Idemitsu Uranium Exploration Canada Ltd., and TEPCO Resources Inc.
This week’s auction by Mesrena will be the company’s 11th since it began producing at Alta Mesa about a year ago, Garrow said in a telephone interview The results will be confidential, though he said he expects they will be reflected in published marker assessments.
Every time we’ve done a sale, the market price has gone up,” Garrow said.
The price of uranium rose $2.50 to a record $65.50 a pound from a week earlier, Ux Consulting Co. of Roswell, Ga., said yesterday. UX`s weekly price, which $36.25 >in December 2005, is based on the company’s assessment of the uranium market and is widely used within the nuclear industry.
The Alta Mesa mitre in Texas uses insitu recovery techniques that involve the flushing of a chemical solution through underground ore bodies and the eventual recovery of the uranium from the solution. The mine can produce about a million pounds Of uranium a year.
Global uranium consumption is about 180 million pounds a year.
Shares of Cameco rose 91 cents, or two per cent, to $45.41 Cdn on the Toronto Stock Exchange. They have risen 27 per cent in the past year.
