Paladin considers care and maintenance at uranium mine

The Langer Heinrich operation. Image: Paladin Energy.

Paladin Energy may place its Langer Heinrich uranium mine in Namibia on care and maintenance in response to difficult market conditions.

The Perth-based company has reported that the medium-grade ore stockpiles, which are currently the processing feed for the operation’s processing plant, are expected to be exhausted before mid-2019.

It added that a decision would need to be made on whether to restart physical mining, process low-grade stockpiles or place Langer Heinrich on care and maintenance at least six months prior to the exhaustion of those stockpiles.

Paladin is also facing a deterioration of macro factors, including a low spot uranium price, foreign exchange rates and prices for processing reagents.

Due to these factors, Paladin believes it is less likely to be in a position to resume physical activity at Langer Heinrich in 2018, nor would processing of low-grade stockpiles be viable.

Paladin has, therefore, taken preparatory steps towards being in a position to formalise a care and maintenance decision with its key stakeholders.

The company believes it will be in a position to make a formal decision on this move in the next two months, which would then initiate a one- to two-month process before ceasing uranium production.

Paladin chief executive Alex Molyneux said the uranium market had not recovered since the Fukushima incident in Japan in 2011, with the average spot price so far in 2018 the lowest in 15 years.

“It’s deeply distressing to have to consider suspending operations at Langer Heinrich mine because of the consequences for our employees, and the broader community,” Molyneux said.

“However, as there has yet to be a sustainable recovery in the uranium market, and with the aim of preserving maximum long-term value for all stakeholders, it is clearly prudent to consider these difficult actions.”

The Langer Heinrich mine has been operating since 2007. It has a capacity of 5.2Mlb of uranium production a year and produced 3.4Mlb in 2017.