Paladin Energy (PDN.TO , ASX:PDN) has announced it has placed the Kayelekera uranium mine in Malawi on care and maintenance as it doesn’t make sense to continue operating the mine at a loss, as the current uranium price doesn’t cover the production costs. This means that in excess of 3 million pounds per year are being taken away from the world supply, and we expect more high-cost uranium mines to be placed on care and maintenance as the current uranium price causes a lot of uranium producers to produce at a loss.
The company also stated it would continue to explore for uranium around the currently known mineralized zones at Kayelekera so it can increase the mine life at the project. This means that should Kayelekera start up again once the uranium price recovers, it should be an even more attractive asset as the mine life should be extended.
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Disclosure: The author holds no position in Paladin Energy. Please see our disclaimer for current positions.
