Did dropping uranium output, soft prices spook Global Laser investors?

U.S. production of uranium concentrate could fall to its lowest level in 65 years in 2017 although prices have stabilized since reaching a 12 year low in November, the Energy Information Administration said last week.  

Production has been affected by uranium prices which have generally trended downward since their peak of $135/lb in June 2007, the EIA said releasing the Uranium Marketing Annual Report.  

Spot prices for uranium ore fell significantly in 2016, from $34.65/lb in January to $17.75/lb in November, the lowest monthly spot price since May 2004, before increasing to slightly more than $20/lb in December, the EIA noted, adding prices remained below $25/lb in the first quarter.  

Apparently, that was not enough for investors interested in the restructuring of Global Laser Enrichment, the Wilmington NC-based joint venture of General Electric, Hitachi and Camco licensed by the U.S. Nuclear Regulatory Commission to use lasers to enrich uranium. 

In early April, Silex Systems Limited said GE Hitachi Nuclear Energy agreed to extend the restructuring talks for five months, to August 31. Under the agreement reached in April 2016, Silex – the Australian developer of Global Laser's technology -- has been seeking to replace the 76 percent stake held by GE and Hitachi.  

This second restructuring extension came days after Westinghouse Electric sought bankruptcy protection from the costs of building four nuclear reactors in Georgia and South Carolina, creating further nuclear industry uncertainty until Westinghouse files a business plan with the bankruptcy court. The company said later this is expected in July. 

The extension also marked a further delay for the Paducah Laser Enrichment Facility, Global Laser's proposal to use laser technology to reprocess tails stored at the site of the first U.S. enrichment operation, the Paducah Gaseous Diffusion Plant on the Ohio River in western Kentucky, which closed in 2013. 

When proposed in 2013, western Kentucky officials put the investment needed to produce natural grade uranium from six decades of byproducts at $1 billion. 

Meanwhile, U.S. production of U.S. uranium concentrate declined, dropping 40 percent between 2014 and 2016 to 2.9 million pounds U3O8 in 2016, the lowest annual total since 2005, the EIA said. 

Production of uranium concentrate has remained low in 2017, totaling just 0.45 million pounds during the first quarter. If production were to remain at its first-quarter level for the entire year, annual production in 2017 would be the lowest level since 1952.