Biggest source of future uranium shelved

Bad news for BHP, good news for future uranium prices. What am I talking about? The fact that BHP Billiton has announced the widely expected delay to the huge expansion of the Olympic Dam mine in Australia. You can read coverage of the announcement here in the Financial Post.

The FP article, which I feel is well worth reading, concludes that the decision ‘could have an outsized impact on the uranium market, which is small and concentrated. The Olympic Dam expansion was expected to quadruple uranium output from the mine to more than 40 million pounds beginning in 2017. To put that in perspective, uranium giant Cameco Corp. produced 22.4 million pounds last year.’

Personally I think the FP has understated the matter. With the HEU agreement soon to end and the cost and timescales required to bring new uranium production online, a uranium supply deficit is already expected. The BHP news suggests to me that the supply gap will not only be larger but will be in play for a longer period that previously estimated.

Dev Randhawa