Global demand for uranium concentrate (U3O8) is rising at a rate of 2% to 3% per annum, and this is largely driven by emerging markets says Chris Sattler CEO of JSE- and Toronto-listed miner Uranium One.
According to Sattler, China, Russia, South Korea and the Middle East were among those areas where demand is expected to increase.
Sattler said the company was also optimistic that Japanese federal and local lawmakers would allow a gradual restart of the country's 54 nuclear power plants, which made up 30% of the its installed capacity.
"We believe that Japanese federal and local governments will begin to gradually restart reactors in a cautious manner, which balances local interests and the overall energy needs of Japan's manufacturing- and export-driven economy," Sattler said.
Presenting the company's results for the March quarter, Sattler was confident that the fundamentals for uranium would remain strong, and that the company would maintain its production guidance for 2012 at 11.6 million pounds and for 2013 at 12.5 million pounds, and that an average cash operating cost of US$19 per pound was expected as the company increased its staff complement.
During the first three months of the year, Uranium One achieved production of 2.8 million pounds, an increase of 18% over production of 2.4 million pounds for the comparable period in 2011.
The group reported quarterly revenue of $95.9 million based on sales of 1.8 million pounds at an average realised sales price of $53 per pound at an average total cash cost per pound sold of $14.
Earnings from mine operations were $49.3 million during Q1 2012, a 4% decrease compared to earnings from mine operations of $51.2 million in Q1 2011, primarily due to a decrease in the realised uranium sales price.
At 16:21 Uranium One's share price had dropped R1.52 or 6.84% to R20.70, while rival First Uranium rose 6 cents or 6.38% to R1, with the JSE All-share index down by 0.90%.
