Salman Partners Says Uranium May Hit $200/lb Threshold in 2008

Source:

Salman Partners' Senior Mining Analyst Ray Goldie and Research Associate Patrick Donnelly have predicted that uranium prices could reach $200/lb in the next three to five years due to a lack of new mine supply.

Salman Partners' Senior Mining Analyst Ray Goldie and Research Associate Patrick Donnelly have predicted that uranium prices could reach $200/lb in the next three to five years due to a lack of new mine supply.

Nevertheless, while Goldie, a geologist, and Donnelly suggest that the $200/lb threshold could be reached by the end of 2008, they also advise that "uranium prices could hit a ceiling."

"We think that there is a ceiling because if a utility were to pay US$200/lb for all of its fuel, its total cost of producing electricity would be about US$0.15/KWH, a cost at which most generators could not make money," the analysts explained in a recently published report. They added that $200 uranium "would encourage some consumers to stand on the sidelines until Cigar Lake came on stream, and that prices could not be sustained above US$200/lb for significant periods. But we do believe that a later start of Cigar Lake would lengthen the period during which prices would hover around US$200/lb."

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