Antinuclear

15% fall in uranium price in 2013 – a problem for Rio Tinto

While Rio thought it was buying the asset at the bottom of the uranium
market – which had been badly depressed after the Fukushima nuclear
disaster in March 2011 – it was soon proved wrong when prices for
sales of uranium fell by close to 15 per cent in 2013.

Rio’s uranium foray faces write-down, The Age January 21, 2013 PeterKer  RIO Tinto’s most recent acquisition could be among those written

down next month when the miner reveals full details of the $US14
billion in impairments that cost chief executive Tom Albanese his job.
Australian analysts believe one of those smaller write-downs could be
against the Canadian uranium deposits acquired by Rio just over one
year ago in its $638 million acquisition of Canadian junior Hathor
Exploration.

That deal gave Rio a prospective uranium deposit called Roughrider,
but only after a bidding war with uranium major Cameco that saw the
two rivals swap improved bids several times.

Upon conceding defeat to Rio just 14 months ago, Cameco chief
executive Tim Gitzel said beating Rio’s offer would have been ”too
much to pay for that asset”.

While Rio thought it was buying the asset at the bottom of the uranium
market – which had been badly depressed after the Fukushima nuclear
disaster in March 2011 – it was soon proved wrong when prices for
sales of uranium fell by close to 15 per cent in 2013.

The spot price for uranium was hovering around $US48 per pound for
most of 2012, but has spent the start of the new year mostly below
$US42 per pound, despite seemingly positive signs for the commodity’s
longer term prospects in both Japan and China in recent months…….
A full explanation of Rio’s impairments will come on February 14 when
the company reveals its annual results in London……..

http://www.theage.com.au/business/rios-uranium-fora

January 20, 2013 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, business, uranium