URANIUM 1.02% $24.70 uranium futures

more good news for uraniums return

  1. 3,754 Posts.
    * Reuters
    * Friday February 29 2008

    (Adds details, analysts' comments)
    By Sue Thomas and Anna Stablum
    JOHANNESBURG/LONDON, Feb 29 (Reuters) - AngloGold Ashanti said on Friday its Nuclear Fuels Corp of South Africa unit did not expect to default on its contracts despite alerting customers to a potential force majeure due to power shortages.
    "We do not at this stage in the present circumstances envisage not meeting our obligations," AngloGold Ashanti spokesman Alan Fine said.
    "But because of the unpredictability of the situation, legally speaking we would not be doing our legal duty to our customers and to our shareholders if we did not (serve notice)."
    South Africa's mining companies were ordered last month by state-owned utility Eskom to cut power usage by 10 percent to help solve a power crisis.
    "We found ourselves in a situation where we faced a power shortage. Obviously, where there is a possibility that we would not be able to meet our contractual obligations, you issue this (notice) to your customers that this might happen," Fine said.
    "You do what you have to do, where you are taking precautions."
    Nufcor SA, wholly owned by AngloGold Ashanti, was set up in 1967 to process and market uranium concentrates to nuclear power generators around the world, according to nuclear fuel trader Nufcor International's Website www.nufcor.co.uk.
    Nufcor SA is the sister company of Nufcor International, a joint venture between AngloGold Ashanti and South African banking group FirstRand Ltd and sole marketing agent for all uranium produced in South Africa, the Website said.
    The electricity shortage in South Africa has prompted some gold and platinum companies to trim their output forecasts, contributing to a surge in precious metals prices.
    Some analysts also see the uranium price rising.
    "The power crisis in South Africa might have an overall positive effect on the short-term, as well as long-term, outlook for the uranium price as the demand for uranium fuel as well as longer term for new plants should be rising," analyst Eugen Weinberg at Commerzbank said in an email sent to Reuters.
    "On the other side, production of uranium should fall due to the power shortages."
    Spot uranium was at $73 per pound this week, down from a high of $136 last June. Prices, however, are still well up on a low of $7 touched in 2000 amid strong demand from nuclear reactors and limited supply.
    "This news adds a new element of supply disruption to the uranium pricing equation which should provide upward pressure on prices," David Coates, a fund manager at New City Investment Managers, said in an email.
    AngloGold, the world's third-largest gold producer, produces around 850 tonnes of uranium per year as a by-product of gold.
    "Since Nufcor is set up as a trading entity, and relies to a large extent on South African uranium as its source, it is plausible (as Nufcor states) that its supply source could be drastically impacted by Eskom's power shortages," said chief executive Gene Clark at uranium consultancy TradeTech.
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