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China drives demand for nuclear fuel

A view of Paladin’s
Langer Heinrich uranium
mine in Namibia
Perth, Australia — ESI-AFRICA.COM — 17 November 2010 – Paladin Energy Limited “’ the Africa-focused Australian mining company producing uranium in Namibia and Malawi “’ expects prices to keep rising as China drives the international demand for nuclear fuel.

Reinforcing this statement, Paladin CEO John Borshoff told analysts on a call here that China had “piled up” contracts to import uranium. “Although they have sucked a chunk out of new production, they are nowhere near their target of acquiring in the vicinity of 45 to 50 million pounds per annum by 2020,” he pointed out.

Paladin “’ which operates the Langer Heinrich mine in Namibia and the Kayelekera project in Malawi “’ forecasts increasing uranium demand as countries such as China expand the use of nuclear power to curb emissions from burning coal. The Perth- based company aims to double uranium oxide output to almost 14 million pounds by 2016 from a projected 7 million pounds in the year ending 30 June 2011.

Paladin’s uranium production rose 83% to 1.36 million pounds in the three months to 30 September 2010 from a year earlier, it revealed last month. Uranium oxide prices have rallied in the past month to about US$59 a pound, compared with US$40 in the second quarter of the year.

Paladin revealed that was targeting uranium shipments to China in 2011, after signing a preliminary agreement with the nation’s second- biggest builder of nuclear power plants. “The company aims to convert a memorandum of understanding with China Guangdong Nuclear Power Group Co. into supply contracts later this year or in early 2011,” Borshoff said.