Wednesday, 07 November 2012 14:31
Paladin Energy will slash costs by up to US$80 million ($76.97 million) over the next two years following falls in the uranium price.
The uranium miner has also put a freeze on any expansion as it cuts costs by between US$60 ($57.73) and $US80 million in fiscal 2013 and 2014, after undertaking an extensive review of costs and production.
"This optimisation exercise has now become even more relevant with the recent weakening of the uranium spot price," Paladin said in a statement.
The company said it would not expand or develop new projects in the current price environment.
"Paladin is of the view it would require a sustainable uranium price at or above US$85 per pound ($81.78) to warrant any further expansion or new mine development."
However, the company said the price decrease did not detract from strong fundamentals of the commodity in the mid to long term.
Paladin has examined all of its activities from its mining operations, corporate and administration overheads, future development considerations, exploration, sales and business development.
But the company did not reveal whether significant job losses would result from the cost reductions.
There was also an opportunity for re-negotiation of mining and consumables contracts.
During full year 2013 the company will cut US$10 million ($9.62 million) at its Langer Heinrich Mine in Namibia and US$10 ($9.62) million at its Kayelekera mine in Malawi, while trimming US$4 million ($3.85 million), or 20 per cent, from its exploration budget.
Inventory management is expected to deliver savings of US$15 million ($14.43 million).
The cost reductions do not include additional benefits from technical innovation, the company said.
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