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Paladin halts Malawi uranium mining to cut costs

The company has halted mining at its Kayelekera operation to cut costs after prices by more than half since the Fukushima disaster.

Paladin Energy Ltd., an Australian producer of uranium, halted mining at its Kayelekera operation in Malawi to cut costs after prices of the atomic fuel fell by more than half since the 2011 Fukushima disaster.

“The suspension will involve placing the operation on care and maintenance until the price of uranium recovers,” Paladin said today in a statement. Processing of ore will continue.

Uranium prices have slumped since the meltdown at the Fukushima atomic plant in March 2011 as countries around the world shut reactors and put nuclear projects on hold. Companies including BHP Billiton Ltd. and Russia’s JSC Atomredmetzoloto have closed or shelved uranium projects to weather the decline.

Prices for the metal have plunged to $35.50 a pound from $72.63 before the disaster, Paladin said. Kayelekera’s halt comes three weeks after the company agreed to sell a stake in its Namibian uranium mine to China National Nuclear Corp.

The suspension will add $7 million to $10 million to cash flow this year and $20 million to $25 million in 2015, according to the Perth-based company. The shares rose 3.2 percent to close at 49 cents in Sydney trading.

Paladin will pay out more than 10 months’ salary, or the equivalent, to “national employees” who are made redundant, it said, without specifying the number of workers to be dismissed.

–Editors: Amanda Jordan, Tony Barrett

To contact the reporter on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

©2014 Bloomberg News

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