New investor in Kayerekera Uranium Mine Lotus Resources has said a recent rise in uranium prices on the global market could not trigger reopening of the mine.
The mine has been under care and maintenance since 2014 to preserve resources and shareholder value due to what the owners described as sustained low uranium spot price.
However, since mid- August, prices of uranium have been rising on the global market, reaching $50.85 per pound in September, the highest since 2012.
“Uranium prices began rising mid-August, thanks in part to the launch of an exchange-traded fund that proposed to hold most of its assets in physical uranium. The fund launched with a war chest of $300 million and later raised that total to $1.3 billion.
“Since its July 19 inception date, the price of uranium has increased by nearly 53 percent,” 247wallst.com reports.
But in an interview on Monday, one of the Lotus Resources directors Grain Malunga said it would only make business sense to resume operations when the prices reached $65 per pound.
“There are prospects of joining the market; currently, we are conducting feasibility studies to see at what point we can make an entry into the market with the improving prices. Currently the studies are showing that the best time for us to enter the market would be when the prices hit $65 per pound.
“For the time being, Kayelekera can only start when the price is $65 unless there is intervention, in terms of cheap energy, which could reduce the cost of mining the commodity,” Malunga said.
The company has been exploring ways of getting grid power supply from the Electricity Supply Corporation of Malawi to replace the existing diesel generators used at the mine.
The mine was officially opened in April 2009 and produced 10.9Mlb between 2007 and 2014.