Paladin to likely idle Langer Heinrich

Australian miner Paladin Energy is considering placing its Langer Heinrich (LHM) mine in Namibia into care and maintenance
Paladin to likely idle Langer Heinrich Paladin to likely idle Langer Heinrich Paladin to likely idle Langer Heinrich Paladin to likely idle Langer Heinrich Paladin to likely idle Langer Heinrich

Staff reporter

The company said the decision is centered around the deterioration of macro factors, including "stubbornly low" spot prices for uranium, as well as foreign exchange rates and processing reagent pricing.

Paladin has medium-grade stockpiles that are currently the processing feed for LHM's processing plant. That supply will not be exhausted before the middle of next year, though officials said they need to make a decision at least six months before that occurs if it will restart physical mining, move to the lower-grade stockpiles or place the mine into C&M.

"It's becoming less likely that the company will be in a position to resume physical mining activity at LHM in 2018, nor would processing low-grade stockpiles be viable," it said, noting it has begun consultations with stakeholders such as government agencies, customers, joint venture partners and unions.

Changes in supplier arrangements could still lie ahead, Paladin said, and staffing changes could result in initial redundancies. It plans to make a formal decision on LHM's future within two months, with uranium production ceasing one to two months after that should it select the C&M option.

Chief executive Alex Molyneux pointed to the 2011 Fukushima incident as a turning point in the uranium market, noting that the market has not recovered since that event, and average spot prices to date in 2018 have been their lowest in 15 years.

"It's deeply distressing to have to consider suspending operations at Langer Heinrich mine because of the consequences for our employees and the broader community; however, as there has yet to be a sustainable recovery in the uranium market, and with the aim of preserving maximum long-term value for all stakeholders, it is clearly prudent to consider these difficult actions," Molyneux said.

Open-pit LHM has been in continuous operation since 2007. The 5.2-million-pound capacity operation produced 3.4 million pounds last year with a staff of 600.