Sluggish uranium prices put pressure on industry

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With uranium prices hitting a four-year low last week, analysts predict a resurgence of the rare earth is not expected for 12 months.

The price of uranium fell below $40 a pound for the first time since 2009, to $39.87 a pound.

Despite industry claims the demand for uranium would increase, prices have not pushed through the $45/lb mark since December last year.

The West Australian reported low uranium prices is causing concern on local uranium juniors such as Toro Energy who are in the bid for partners to help fund the $269 million Wiluna project.

Toro have previously said if financing arrangements went to plan the mine would be in production by the end of 2015.

The $269 million Wiluna mine, is set to become Western Australia's first uranium mine.

With world energy demands increasing, last week Resource Minister Gary said the uranium industry in Australia needs to ramp up.

Speaking to the Australian Uranium Association(AUA),Gray said with the demand for uranium set to rise, Australia was in the perfect position to supply them more of the precious metal.

However, some analysts now predict a turn-around in price is still twelve months away, leaving many asking if new projects will get off the ground.

A report commissioned by Greens senator Scott Ludlam into the economic viability of Toro Energy’s proposed Wiluna project, claimed the company may struggle to make the project viable.

"The Wiluna project sits very high on the cost curve of global uranium projects," the report’s author said.

"It's difficult to see why any of the major uranium players would invest in this project when there's a lot of cheaper projects out there."

In 2012, production from Australian mines rose more than 17 per cent to top 8000 tonnes. However, the level is well below the period between 2003 and 2009 when it was 9000 to 11,000 tonnes.

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