Paladin Energy Ltd revenues soar 79% but shares sink Motley Fool By Mike King – January 19, 2015 Uranium miner Paladin Energy Ltd (ASX: PDN) has announced sales of US$69.9 million in the December quarter, a rise of 79% over the previous quarter.
But despite the news, shares are down 2.8% at 35 cents at lunchtime.
So why are investors selling out of a stock reporting such strong growth?
The problem is that Paladin sold 1.9 million pounds of uranium in the quarter, at an average price of US$36.58 per pound. That last figure is the issue – that price is well below what it costs Paladin to produce the uranium, and there are no signs that the price is…[members only] http://www.fool.com.au/2015/01/19/paladin-energy-ltd-revenues-soar-79-but-shares-sink/
Uranium bulls have long pointed to China’s nuclear-industry expansion as a catalyst for a recovery in the market. In mainland China, there are 22 nuclear reactors currently operating, 26 being built and more about to start construction, according to the World Nuclear Association.
However, Australian investment bank Macquarie thinks there are now “serious question marks” about how much uranium the world’s No. 2 economy will need. “China is clearly the most positive story globally when it comes to nuclear-power-capacity expansion,” according to Macquarie analysts. “The concern, however, is that China has already procured a substantial amount of uranium well in excess of what it has consumed and that this advance purchasing might limit its need to enter the market to source material over the next few years,” they add in a note.
Uranium prices have mostly languished since the 2011 Fukushima disaster………with uranium prices rising 37% from August through November as Japan moved closer to restarting its idled reactors. Consultants Ernst & Young said they thought the market had bottomed. Analysts at Australian brokerage Bell Potter agreed.
BUT THAT RECOVERY HAS STALLED…….While the revival of Japan’s nuclear sector is positive for prices, China’s potential demand is more important……..But Macquarie’s analysts say China’s growing store of uranium may be bigger than anyone previously thought. Their latest analysis suggests China increased its stockpiles by 17% last year and now has enough uranium to meet domestic demand for about seven years at forecast 2020 consumption rates. China doesn’t provide data on its uranium inventories…. JPMorgan expects uranium prices to average $30.70 a pound this year, down from last year’s $31.70…….http://online.barrons.com/articles/uranium-rally-running-low-on-juice-1421462807
West Australian Mines Minister Bill Marmion gave the exploration proposal the go-ahead after the mining warden recommended it be rejected in February 2014.
Mining Warden Kevin Tavener said the application for three exploration permits on Minderoo should be rejected because of the company’s low cash position.
It was a decision that reverberated throughout the industry as junior mining companies typically do not have access to deep cash reserves……..
Forrest’s Minderoo expressed its disappointment at the decision.
“Minderoo is disappointed at the minister’s decision to allow exploration by Cauldron Energy within the historical and environmentally fragile parts of Minderoo station,” a spokesperson said.
“As we have continuously stated on the public record, Minderoo supports development as long as it has no negative impact on the environment, and specifically protects the delicate environment of the Ashburton River.”http://www.miningaustralia.com.au/news/uranium-exploration-given-the-go-ahead-on-forrest
The deal comes just days after Forrest bought Harvey Beef for a reported $40 million.
The uranium buy came as a surprise to the industry, with spot prices yet to recover to pre-Fukushima levels and dropping as low as US$30.75……..http://www.miningaustralia.com.au/news/andrew-forrest-invests-in-west-australian-uranium
Renewable investment dives in Australia, bucking global trend, SMH January 10, 2015 – Peter Hannam Environment Editor, The Sydney Morning Herald Investments in renewable energy rose to record levels globally in 2014 but fell sharply in Australia because of uncertainty triggered by the Abbott government’s review of the industry, Bloomberg New Energy Finance said.
Worldwide investment in wind farms, solar photovoltaics and other clean energy sources jumped 16 per cent last year to $US310 billion ($383 billion), or more than five times the tally of a decade earlier. Solar investments accounted for almost half the total.
China led the way, with investment soaring almost one-third to $US89.5 billion, while US investment gained 8 per cent to $US51.8 billion, and Brazil’s almost doubled to $US7.9 billion.
Australia, though, went the other way, with investment sinking 35 per cent to $US3.7 billion. BNEF said the amount was the “lowest since 2009, as wind and solar project developers delayed decisions while they awaited the government’s response to its Renewable Energy Target review”.
The Australian tally in fact masks a much steeper dive for large-scale renewable plants as small-scale solar PV largely held its own in 2014 even as state-based support schemes were wound back further.
“Four wind farms are currently under construction, but these signed contracts before the last RET review,” said Darren Gladman, the acting policy director for the Clean Energy Council.
“No more projects in the country have imminent construction plans.
“Australia is not just at risk of falling behind the rest of the world on renewable energy, we have already slipped off the back of the wave. We have some of the best sun, wind and waves in the world, but this new research shows that we are squandering some of our huge natural advantages.”
Fairfax Media sought comment from Industry Minister Ian Macfarlane, who has sought to cut the country’s renewable energy target from the current goal of 41 terawatt-hours annually by 2020 to as low as 27tWh.
So far, the Senate has blocked such a move but uncertainty over whether and when the goal will be reset has made it almost impossible to raise financing for new projects………..http://www.smh.com.au/business/renewable-investment-dives-in-australia-bucking-global-trend-20150109-12kqhk.html
Australian companies uranium miner Paladin, and OceanaGold will be forced to come clean on tax matters
Canada transparency laws force ASX companies to disclose tax bills, The Age December 26, 2014 Georgia Wilkins Business reporter Two Australian mining companies will be forced to disclose how much tax they pay in every country around the world by new transparency laws introduced in Canada.
Paladin Energy and OceanaGold, both dual-listed in Australia and Canada, will have to comply with new Canadian laws requiring all oil, gas and mining companies to report payments they make to governments overseas, including taxes, royalties, bonuses, regulatory charges and licence fees.
The Australian government is being pushed to introduce similar rules. Continue reading
RET Impasse Costing Australian Renewables Millions http://www.energymatters.com.au/renewable-news/ret-impasse-cost-em4594/ December 11, 2014 Energy Matters The Federal Government’s drawn-out review of Australia’s Renewable Energy Target is costing the sector between $400 and $500 million a year in lost investment, according to the Clean Energy Council.
An analysis by the CEC says the ongoing impasse will continue to wreak more than $400 million of damage every year to renewable energy projects already operating.
CEC Chief Executive Kane Thornton said the RET had delivered $10 billion worth of investment in large-scale projects to date; investments made in good faith that the legislated target would continue unchanged.
“A breakdown in that bipartisanship has had a material impact on the market confidence in the policy and is affecting the revenue that flows to those projects,” Mr Thornton said.
“We are staring down the barrel of job losses, business closures, negative financial effects on the $10 billion of renewable energy projects already operating, and a halt in the development of new large-scale renewable energy projects across the country.”
Referring to 2014 as a dark year for large scale renewables, Mr. Thornton points out more than $2 billion was invested in 2013, but the first three quarters of this year has seen a comparatively paltry $238 million invested – directly the result of the Federal Government’s apparent determination to gut the RET.
“If the government is genuine about its intent to resolve the current political impasse, move beyond its previous position and support a target that delivers a strong future for renewable energy in Australia, we would encourage Labor to return to negotiations,” said Mr. Thornton.n November, the ALP walked away from negotiations with the Federal Government that would have resulted in the dilution of the RET.
The CEC briefing paper “Lost opportunity and big costs: The impact of an unresolved RET review” can be downloaded here.
A very recent example of the impact the situation is having is in the NSW Southern Tablelands where a fourth generation farmer had hit tough times – and wind turbines were to be his saviour. However, with the continuing RET uncertainty,the farmer may still have to sell his property – one that has been in his family for four generations. This particular situation goes beyond this single farmer’s woes, with jobs and investment in the local region also at stake.
In October, a major wind turbine tower manufacturer in Victoria announced it will be shedding 100 jobs; partly due to the RET situation.
Even where concessions have been made concerning the RET, there still appears to be a great deal of devil in the detail. Yesterday, ClimateSpectator reported Environment Minister Hunt’s office communicated that “solar up to 100kw is proposed to stay in the SRES due to the red tape that would be involved if it moved into the LRET.”
There had been fears commercial solar would be lumped in with the large-scale target. Even this good news came with a potential barb. It’s unclear if up-front deeming will remain; i.e. whether the full government subsidy will continue to be made available upfront when a system is installed; rather than incrementally as the power is generated – as is the case with projects under the LRET
For the Mirrar Aboriginal people, a new era may be opening up, if ERA’s Ranger uranium mine finally closes
Uranium mining in Kakadu at a crucial point, SMH, 29 Nov 14 Peter Ker Resources reporter “……..place facing an uncertain future. Jabiru is a town in limbo. Four decades after arriving, uranium miner Energy Resources of Australia (ERA) will decide soon whether it will continue digging here. There is a chance it will choose not to, which will bring down the curtain on perhaps nation’s most controversial mine, Ranger.
Built on the faultlines of environmental and indigenous land rights policy, Ranger is at a defining moment. It has provided fuel to nuclear power stations of the world but the end of its working life is in doubt.
The end of mining at Ranger would be cause for celebration for some. Continue reading
Uranium mining in Kakadu at a crucial point, SMH, Peter Ker, Resources Reporter, 29 Nov 14 “….. As fate would have it, ERA could barely have picked a worse time to evaluate a new uranium development.
Most Australian uranium miners haven’t made a profit since. ERA has received just $US46 ($54) a pound for its product during most of this year. That is 12 per cent below the price it received in 2009.
Commodity prices are not the only threat to the project going ahead. A series of events over the past year have shaken investors’ confidence.
A tank failure in December last year spewed toxic substances around the Ranger site and prompted a six-month shutdown. Despite official surveys suggesting none of the substances escaped into Kakadu, a fierce debate ensued over the mine’s social licence to operate in such a delicate and difficult location.
The exploration results for the project have also fuelled concerns, with some analysts expressing alarm at the quality of some sections of the underground geology and cases of unstable rock formations.
At the same time ERA’s 68 per cent shareholder, Rio Tinto, is aggressively cutting back capital spending on new projects.
With Rio focused on boosting dividends rather than building large numbers of new mines, many doubt it will be willing to spend the hundreds of millions of dollars that would be required to go ahead with a new underground mine at Ranger.
When the geological concerns were reported to the market in July, Credit Suisse published the most pessimistic research note on the project to date.
“We believe the results of the Deeps resource drilling are poor,” the note said.
“Ranger Deeps either adds value or there is close to none, and risks are increasing towards the latter. If ERA announces at the end of this year that Ranger Deeps is not viable, then the share price should collapse to very low levels.”……..
JP Morgan analysts said the weak uranium prices, combined with the 2021 expiry of the mining lease, put ERA in a difficult position.
“We believe the project likely needs prices of $US50 per pound to $US60 per pound over the life of the project,” they wrote. ……..
ERA chief Andrea Sutton said the geological results had been consistent with expectations, and sufficiently good for the company to conduct less drilling than planned.
The spot uranium price enjoyed a small surge in early November, and while the longevity of that rise is unclear, Sutton said the company was confident the price would rebound in the medium term……….http://www.smh.com.au/business/mining-and-resources/uranium-mining-in-kakadu-at-a-crucial-point-20141128-11vmr3.html
Paladin continues uranium plunge, Yahoo 7 News, Nick Evans November 14, 2014 A surge in the uranium spot price failed to help Paladin Energy’s bottom line, with the company declaring a net after-tax loss from operations of $US45.8 million for the September quarter.
According to Paladin’s latest financial results, released late yesterday, revenue for the quarter crashed 43 per cent to $US39.3 million………
The unexpectedly big loss will put further pressure on Paladin’s balance sheet, despite the completion of a $US190 million company-saving deal with China National Nuclear Corporation for the sale of a 25 per cent stake in Langer Heinrich. Closure of the deal left Paladin with cash holdings worth $US209.5 million at September 30.
Paladin also refinanced its existing $US110 million project finance loan and $US20 million working capital facility in the quarter, and used some of the CNNC cash to pay down debt.
But the company still faces the task of refinancing $US300 million of convertible bonds maturing next November, as well as paying $US40.4 million in interest and principal repayments before next September…….https://au.news.yahoo.com/thewest/business/wa/a/25512522/paladin-continues-uranium-plunge/
Will Abbott and Newman show us their coal portfolios? Will they hold their investments until 2020? olddogthoughts November 16, 2014 Standing up for coal – Abbott and Newman give investment advice November 16, 2014 by: Kaye Lee
Tony Abbott has told a G20 leaders’ discussion on energy he was “standing up for coal” as the Queensland government prepares to unveil new infrastructure spending to help the development of Australia’s largest coal mine.Abbott, who recently said coal was “good for humanity”, also endorsed the mine, proposed by the Indian company Adani, to the meeting.
The Australian government has given all environmental and regulatory clearances for the $7.5 billion coal mining, rail and port project, said Gautam Adani, chairman, Adani Group, in an interview to The Indian Express.
And Campbell Newman is happy to put your money where his mouth is. “We are prepared to invest in core, common-user infrastructure,” Mr Newman said. “The role of government is to make targeted investments to get something going and exit in a few years’ time.”
Despite poor market conditions, high costs and the massive outpouring of concern over the environmental impacts of their projects, Indian companies GVK and Adani remain hell-bent on opening up the Galilee Basin in Queensland. The smallest mine is as large as Australia’s biggest operating coal mine and the largest, twice the size. All of the proposals in the Galilee Basin would produce enough coal to chew up 7% of the world’s remaining carbon budget, drastically reducing our chances of keeping a lid on global warming.
Adani and fellow Indian company GVK are pushing their projects and Adani wants to start construction early next year, but the key problem is access to funds.
Few banks are willing to lend when coal prices are so low and the industry is facing issues with climate change.
There are also issues with both companies………………….. Continue reading
The slide in investment has seen China consolidate its position as the world’s renewable energy powerhouse, according to the Climate Council Report, Lagging Behind: Australia and the Global Response to Climate Change.
“Investment that could be coming to Australia is instead going overseas to countries that are moving to a renewables energy future,” report’s co-author, Professor Tim Flannery said. “Unfortunately the lack of federal government commitment to renewable energy is hurting the industry.”
Australia has come under pressure to cut its carbon emissions deeper after the European Union last week agreed on a new target of 40 per cent by 2030.
The agreement, labelled by the EU as a new global standard, also includes a 27 per cent target for renewable energy by 2030. The coalition government has said it will consider a new post-2020 target in early 2015 before a United Nations conference in Paris, where a new commitment will be discussed and possibly settled.
Prof Flannery said over the past year investment in Australian renewable energy projects dropped 70 per cent, while China installed more renewable energy capacity than fossil fuels in 2013. Continue reading
BHP offers little hope of revisiting Olympic Dam expansion The global miner shelved plans for the multi-billion-dollar expansion in 2012 after a year-long study. MineWeb 03 Nov 2014 SYDNEY (REUTERS) - Expansion by BHP Billiton’s giant Olympic Dam mine in Australia, once considered among its prized growth assets, is off the agenda due to low metals prices and productivity inefficiencies, the company said on Friday.
BHP shelved plans for a multi-billion-dollar expansion of the copper, gold and uranium mine in 2012 after a year-long study, citing a need to reign in spending as the Australian mining boom started to fade.
Since then business leaders and politicians, including Australian Prime Minister Tony Abbott, have implored BHP to reconsider its decision, hoping to alleviate job losses caused by the exit of car manufacturing inAustralia.
But BHP has stood firm and on Friday reiterated its mothballing of expansion plans for Olympic Dam. http://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=258553&sn=Detail
Uranium producer Cameco reports a third-quarter loss By Jim Brumm StarNewsOnline.com, November 3, 2014 “……..The Canadian uranium producer reported a third-quarter loss last week after writing off its $184 million investment in Global Laser, citing General Electric’s unexpected July cut in funding to “pace our investment in line with market.”
At the time Silex, the Australian owner of the laser technology, said GE responded “to worsening trading conditions in the global nuclear fuel markets, initially triggered by the events in Fukushima, Japan, in March 2011.”
“The market has declined more than 50 percent since” the Global Laser project started in 2007, GE spokesman Christopher White said in July without describing the measurement cited………
Cameco’s charge indicates a total Global Laser worth of $767 million and values GE’s 51 percent at $391 million. Hitachi, which owns the remaining 25 percent, hasn’t discussed a charge.
GE has declined to discuss the dollar value of the Global Laser charge it took against second-quarter earnings, but Nuclear Intelligence Weekly put the amount at $194 million. That would be 49.6 percent of the total value of GE’s Global Laser holdings as indicated by Cameco. http://www.starnewsonline.com/article/20141103/ARTICLES/141109942/-1/topic24?Title=Uranium-producer-Cameco-reports-a-third-quarter-loss-
I switched to Powershop recently, I had several satisfactory years of fully renewable energy with AGL. But now I am especially glad about the switch. Apart from Powershop being cheaper and more efficient – it IS dedicated to renewable energy. And alas, looks as if AGL has now gone well and truly over to the dark side. (See the article further down this page.)
ETU branch urges members to back Powershop http://www.heraldsun.com.au/business/breaking-news/etu-branch-urges-members-to-back-powershop/story-fnn9c0hb-1227105301934 JOHN CONROY OCTOBER 28, 2014
The Electrical Trades Union – Victorian Branch (ETU) has announced that it will be recommending an electricity offer with new Victorian market entrant and renewable energy backed electricity retailer Powershop to its members.
ETU State Secretary Troy Gray said: “We are urging our 20,000 strong membership in Victoria to switch to Powershop to show their support for the Renewable Energy Target (RET) and Australia’s renewable energy future.”
“For us it was a no brainer. Powershop has been ranked the greenest energy company in Australia by Greenpeace, they are backed by 100 percent renewable energy generator Meridian, they are the only energy company to put up a fight to defend the Renewable Energy Target and the jobs and investment it creates and they are 100 percent carbon neutral too.”
“Our research indicated that companies, like Powershop, who support the RET, are 20-30 per cent cheaper than those who oppose it. The Warburton Review of the RET failed to make the case that the RET drives up power prices and with Powershop we know that our members can back renewable energy and the RET and save money.
“Importantly, by encouraging our members to switch to Powershop, we can also help break the cycle of the big three energy companies (AGL, Origin and Energy Australia) ripping off our members with rapacious deals and self serving energy policies.”
“For too long, our members, and other consumers across Victoria, have been in the grip of an oligopoly that has kept them at arms length from their own energy usage data. The emergence of Powershop, enabled by the RET, has brought unprecedented levels of innovation and choice to a broken market.”
Powershop is backed by Australasia’s largest renewable energy company, NZ-based Meridian Energy. It launched on the Victorian market in February 2014 and has recruited over 20,000 customers to date. Powershop says it is a modern power company that’s designed from the ground up with the sole purpose of empowering consumers and saving them money.
The company has been working to make the case that renewable energy reduces the cost of electricity for consumers. When Renew Economy reviewed submissions to the RET review from energy companies in June 2014, Powershop was found to be “the only retailer to call unequivocally for the current (renewable energy) target to be retained.”
The ETU will not be receiving a payment from Powershop related to this offer to its members. ETU members switching to Powershop through this offer will each receive a sign up credit payment.