Uranium prices force Paladin into Namibia mine shutdown

Refloated uranium miner Paladin Energy has flagged the closure of its Langer Heinrich mine in Namibia in response to “stubbornly low” uranium prices.

The company said yesterday it had taken steps towards a decision to place the mine on care and maintenance, which could see the asset closed in three to four months.

No mining activity is taking place at Langer Heinrich with the processing plant operating on medium-grade ore stockpiles.

Chief executive Alex Molyneux said the uranium market had not recovered since the Fukushima nuclear disaster in Japan in 2011, with the average spot price this year being the lowest in 15 years.

Besides the weak uranium price, which was yesterday at $US21/lb, Paladin also noted foreign exchange rates and the prices of processing reagents had worked against it recently.

“It’s deeply distressing to have to consider suspending operations at Langer Heinrich because of the consequences for our employees, and the broader community,” Mr Molyneux said.

“However, as there has yet to be a sustainable recovery in the uranium market, and with the aim of preserving maximum long-term value for all stakeholders, it is clearly prudent to consider these difficult actions.”

The mine, which employs more than 600 staff and contractors, has been in continuous operation since 2007.

It produced 3.4 million pounds of uranium last year but has an annual capacity of 5.2Mlb.

Paladin fell into administration last July after French creditor and offtake partner EDF called in a $US277 million loan.

The company resumed trading on the stock exchange in February after a subsequent deed of company arrangement gave control of the uranium miner to its bondholders and creditors under debt-for-equity swap.

Paladin shares closed down 1¢ at 15¢ yesterday.

Vimy Resources shares were placed in a trading halt yesterday ahead of a capital raising expected to be announced on Monday.

The Mike Young-led company is working to develop its $493 million Mulga Rock uranium project 240km east of Kalgoorlie. Its shares last traded for 14¢.