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As shares of foreign uranium mining companies remain sedate as a fall-out of the continuing slide in ore prices, State-owned Uranium Corporation of India is considering picking up stakes in such companies, which would be its first overseas foray.
Declining prices
Global uranium prices are currently at about $40 a pound, slightly higher than the eight-year lows of $20-25 that ruled earlier in the year.
Since the Fukushima accident in Japan in 2011, uranium prices had retreated, in the wake of a build-up in inventories after Germany’s decision to unplug its nuclear energy programme. Delays in the restarting of nuclear reactors in Japan further accentuated the supply glut in the market.
The depressed prices of the ore are mirrored in the sliding share prices of most uranium miners, making them potential buys.
D Acharya, Chairman of UCIL, said the company was looking at buying stakes in uranium mines located in Canada, Australia, Malaysia and Africa.
“The choice before us is to either buy the uranium at current low prices or pick up shares in mining companies, which are ruling relatively low due to the price trends,” he told BusinessLine on the sidelines of the 25th annual conference of Indian Nuclear Society.
Meeting requirements
He said uranium prices should be in the neighbourhood of $60 a pound for sustainable operations in mining of the ore.
UCIL, India’s sole uranium miner, is able to meet about one-fifth of India’s requirements, the rest being imported. India is currently producing 5,302 MWe (megawatt electrical) through its 21 nuclear power reactors. Currently, about 40 per cent of nuclear capacity under safeguards was operating on imported uranium, while the rest depend on indigenous fuel.
Acharya said the company’s Tummalapalle project in Andhra Pradesh has started trial production and was expected to commence commercial production by next September. It has spent over ₹1,100 crore on the project.
The company is implementing a ₹12,000-crore expansion plan that includes expansion of the Tummallapalle project, besides opening new mines in Rajasthan and Meghalaya.
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