Paladin Energy has confirmed that the Langer Heinrich uranium mine (LHM) in Namibia will be placed on care and maintenance.
The company announced last month that it may take this move at Langer Heinrich in response to challenging market conditions, including low uranium prices.
It has since received the consent of key stakeholders to make the care and maintenance decision and has stopped delivering ore to the mine’s plant.
Paladin chief executive Alexander Molneux said there would be a run-down phase of up to three months where various stages of the plant would be progressively suspended and cleaned.
“During that time there will be some continued production of finished uranium,” Molneux said.
“Once the run-down phase is complete operations will have been completely suspended and LHM will be on care and maintenance.”
Uranium prices have been in free-fall for more than a decade, dropping to $US21/lb this year. Back in 2007, uranium was fetching $US143/lb.
Despite not taking the decision lightly, Paladin described the move as the most logical decision to preserve the mine’s uranium resource and to mitigate operating cash flow losses.
Molneux said Paladin’s analysis of the uranium market showed that it appeared set for “normalisation” over the next few years.
“Supply curtailments such as the one represented with this announcement, together with actions of global peers such as Cameco, Orano and KazAtomprom, could serve to accelerate the anticipated market normalisation,” Molneux said.
“Being the lowest cost open pit uranium mine in the world means LHM will likely be one of the first mines to return to production as the uranium market normalises.”
Paladin owns a 75 per cent stake in the Namibian operation.