Windhoek — Namibian uranium producers are holding their breath as the Japanese earthquake disaster continues to erode the prices of uranium.
Share prices for nearly all parent companies to Namibian uranium entities started the week on shaky ground as fear and panic grip the world with concerns of looming nuclear disasters in quake and tsunami-ravaged Japan.
World opinion on nuclear energy is divided with three countries suspending their nuclear energy programme and US lawmakers asking the USA to do the same, and wait for the Japanese situation to normalise.
This week's uranium spot price went down 10 percent to US$60 per pound and there are expectations of more decreases in value by Friday afternoon [March 18] if Japan continues to send out more bad news regarding radiation and containment efforts.
Japan is home to 54 nuclear plants out of the total 442 nuclear plants in the world and consumes over 10 percent of the world's uranium.
France' Areva, the developers of Trekkopje uranium mine, and the world's largest provider of nuclear equipment and services lost nearly 10 percent of its trading stock.
Shares for Langer Heinrich's parent company Australia's Paladin Energy fell by about 17 percent, while Rio Tinto, the majority shareholder in Namibia's largest Rossing Uranium Mine, also experienced a slight drop in share value.
There is however confident the panic would not erode investor confidence in uranium, with Paladin Energy saying, "the medium and long-term outlook for nuclear power remains positive."
Paladin Energy in is the process of expanding Langer Heinrich Mine, boosting Namibia's uranium production.
The company says these plans remain on course and "commissioning of [expansion] stage three would occur in April 2011".
The earthquake and tsunami caused severe damage to Japan's several nuclear power plants, with massive explosions reported. Intense monitoring activities are ongoing in frantic efforts to keep levels of radiation at acceptable levels at several nuclear reactors.
Japanese towns are cordoned off as authorities work to keep three reactors at risk of meltdowns contained.
According to international reports, some European countries have halted their nuclear programme while keeping an eye on development in Japan.
Germany is reported to have suspended the agreement to extend the life of its nuclear power stations, while Switzerland put some nuclear power plant approvals on hold.
Taiwan has announced plans to study reductions in nuclear power output. In the USA lawmakers have started to voice public concerns over the country's plans for new nuclear power plants and are asking the country to suspend such operations in the interim period.
However, France, China and India are going ahead with their support for nuclear power and have not suspended their operations.
Paladin Energy, in its statement, says the recent events in Japan could further exacerbate the supply situation, ironically putting the company in an even better position with respect to global demand.
"There are more than 440 nuclear reactors operating safely around the world and growth of the fleet is assured with the 62 reactors currently under construction, with further expansion forecast from the emerging nuclear economies," Paladin Energy said.
Besides concerns over nuclear energy demand, the world's views are polarised on how long would the giant earthquake and tsunami disaster keep demand for commodities down before a rebuilding programme commences to spike up demand for every commodity, from energy to steel and iron ore.
Being a major vehicle producer, producing nearly 40 percent of the world's electronics and the world third biggest economy, Japan's demand has significant impact on commodity exporting countries.
Some analysts nevertheless point out that Japan exports more than it imports, hence the slowdown in the country's demand would have less impact on the global economy.