Paladin pins hopes on new Japanese govt
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PERTH, Nov 22 AAP
November 22 2012, 5:46PM
Uranium miner Paladin Energy hopes a new Japanese government will decide to restart the country's nuclear reactors, as the price of uranium hovers around two-year lows.
Chief executive John Borshoff said that despite the shutdown of nuclear power stations in Japan after the Fukushima nuclear disaster, some reactors were now coming on line.
"We are confident that these will start coming back, working in the fleet in 2013, particularly with the change of government," Mr Borshoff told the company's annual general meeting in Perth on Thursday.
Opinion polls in Japan suggest that no one party will achieve a majority in the December 16 poll and that a shaky coalition is a likely outcome.
The Fukushima nuclear disaster of 2011 sent the uranium industry into freefall as heavy nuclear users, including Japan and Germany, shut reactors and sought alternative power sources.
The uranium spot price recently declined to a two-year low of $US40.50 ($A39.25) per pound and has since strengthened to $US41.80 ($A40.51).
Mr Borshoff said the average time to bring a uranium mine into production was around five to nine years, so supply would soon come under pressure.
"In a way the low uranium price is hurting us at the moment, but for Paladin it's actually exquisite sort of pain because it's exacerbating the supply shortage," he said.
"With no price incentive, nobody's coming into production so the shortage which is there will be even more profound."
He said that in order to meet worldwide demand, 15 to 30 mines would need to be built this year, an impossible task.
Paladin recently announced it will slash costs by up to $US80 million ($A76.97 million) and cut some staff after putting a freeze on development due to the weak uranium price.
The company on Thursday reiterated production guidance for fiscal 2013 of between eight million pounds and 8.5 million pounds.
Shareholders on Thursday approved the company's 2012 remuneration report, with seven per cent of votes cast against the 2012 report that showed Mr Borshoff earned $3.4 million, up from $2.5 million in 2011.
Chairman Rick Crabb said the current spot price of uranium was the result of near-term imbalances, but he expected the spot price to recover to the "mid to high forties" over the next few months.
He said the company was complying with all covenants applying to project financing.
Paladin shares closed 0.5 cents higher at 88 cents.
By Kim Christian