Rio Tinto uranium shutdown creates demand urgency – by Kip Keen ( – June 15, 2015)

What braking on the Ranger 3 Deeps project means for supply.

HALIFAX, NV – The Ranger 3 Deeps uranium project in Northern Australia, mostly owned by Rio Tinto, is dead, or at least in deep sleep for now. And the shelving of Ranger 3 – with a feasibility study no longer going ahead – has important implications for uranium supply, and presumably uranium prices.

This was the conclusion of analysts David Talbot and Zain Nathoo, of Dundee Securities, in a recent note dissecting the impact of Energy Resources decision to halt progress on developing the underground project, which would have extended existing operations at the Ranger uranium mine (now processing stockpiles).

The uranium market is not that large, so decisions like these can quickly have profound effects on supply. In this case we have, as Talbot notes, what could have become – if it reached production – the world’s third largest uranium mine after McArthur River and Cigar Lake, producing some 9 million pounds uranium a year.

Talbot sees the withdrawal of Ranger 3 Deeps as creating urgency for uranium buyers to start looking at securing long term supply contracts.

“We believe today’s news from Ranger 3 equivalent to half of Cigar Lake Mine’s production may start to worry some end users, help entice nuclear utilities return to long term contracting, and generate a spark under uranium market speculators,” Talbot and Nathoo write.

Talbot, a uranium bull, views supply becoming increasingly tight 2017-2018 (i.e. in deficit) and wonders if other analysts may now revise their more conservative assumptions, seeing a supply deficit 2019-2022.

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