By Paul Dobson
Sept. 5 (Bloomberg) -- Areva SA, the world's biggest maker of nuclear reactors, said uranium mining and milling projects may be delayed or canceled after prices slumped and costs rose.
``New mines will be more expensive and difficult to develop,'' Sebastien de Montessus, executive vice president of mining at the French company, said today at a conference in London. ``The cost is so huge it will be difficult for small players to absorb.''
Spot prices for the metal have fallen as low as $57 a pound this year from a record $138 last year. It traded at $64.5 a pound this week, according to TradeTech LLC, a price-setting service. Uranium producers' average salaries have increased 20 percent and equipment costs have risen 35 percent since 2005, De Montessus said.
``Higher floor prices and higher long-term prices are going to be needed,'' Max Layton, an analyst at Macquarie Bank Ltd., also said at the conference.
``The flow of funding has slowed dramatically'' following the decline in prices, Scott Melbye, the president of Cameco Corp., the world's largest uranium producer, told delegates. Smaller miner companies, or so-called ``juniors,'' are facing difficulties as a result, he said.
Still, demand for uranium will more than double by 2030, according to Areva, as utilities turn to nuclear power to meet rising demand without increasing carbon-dioxide emissions.
http://www.bloomberg.com/apps/news?pid=20601082&sid=aE3pHnmTCizI&refer=canada
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