June 1 (Reuters) – Boss Energy BOE.AX said on Wednesday it has made a final investment decision to develop its uranium project in South Australia, as the Australian explorer prepares to transition into the country’s next uranium producer.
A surge in uranium prices after Russia’s invasion of Ukraine has pushed miners to revive the metal’s projects that were damaged after the Fukushima disaster more than a decade ago. A quest for secure energy supplies has added to the potential demand.
The Honeymoon uranium project remains on track for its first production in the December quarter of 2023, ramping up to a steady-state rate of 2.45 Mlb (million pounds) of uranium oxide a year, the company said in a statement.
“This Final Investment Decision puts Boss firmly on track to be Australia’s next uranium producer,” Managing Director Duncan Craib said.
The forecast of A$113 million ($81.16 million) capital cost of the development of Honeymoon project (including contingency) was fully funded with no debt, enabling the uranium-focused explorer to ensure that it has maximum flexibility and pricing leverage in its offtake negotiations, the company said.
“This puts us in an extremely strong negotiating position with utilities and ensures we can capitalise on the looming uranium supply deficit,” Boss said in a statement.
Spot prices for uranium have doubled from lows of $28 per pound last year to $64 in April, sparking the rush on projects set aside after a 2011 earthquake and tsunami crippled Japan’s Fukushima nuclear power plant.
($1 = 1.3924 Australian dollars)
(Reporting by Upasana Singh in Bengaluru; Editing by Sherry Jacob-Phillips)
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