Production up, costs down as Paladin cuts bite

MINING BUSINESS MEDIA: The cost cutting/optimisation regime imposed by Paladin throughout its African uranium operations seems to be paying off. Mark Mentiplay of Mining Business Media reports

Record nine month production and lower costs at its two African uranium operations keep Australian miner Paladin Energy on track for 8 million pounds to 8.5 million pounds of uranium in the 2013 financial year.

Year to date (YTD) (9 months) production for FY2013 was 26 per cent up on the previous FY2012 period to 6.112 million pounds (2,773 tonnes), 96 per cent of combined nameplate production.

The results came despite a nine per cent production fall in the March quarter to 1.992 million pounds, 95 per cent of nameplate, providing $US106 million from the sale of 1.92 million pounds at an average $55.22 per pound.

A major cost cutting/optimisation regime imposed throughout Paladin’s operations to realise savings of $60 million to $80 million in FY2013 and 2014, appears to be paying off with C1 production costs at Kayelekera in Malawi down 8.5 per cent from the December quarter’s $43.50 per pound, but Langer Heinrich in Namibia remained steady around the previous quarter’s $29.60 per pound.

In the September 2012 quarter, Langer Heinrich costs fell to $31.8 per pound from $32.2 per pound the previous quarter, with Kayelekera costs down from $52.2 per pound to $49 per pound in the same period.

Langer Heinrich’s March quarter production was down nine per cent to of 1.230 million pounds, 96 per cent of nameplate for the quarter, with ore feed through the plant down 12.8 per cent to 797,696 tonnes, hurt by temporary water constraints and some operational issues now being resolved via improved water conservation measures and the introduction of desalinated water in May.

YTD production (9 months) for FY2013 was slightly above nameplate, with recovery of 86.7 per cent above 85 per cent design and feed grades of 810 parts per million (ppm), above design of 800ppm.

Kayelekera production was down slightly on the previous quarter to 761,992 pounds (346t), but material mined during the March quarter plunged from 467,462 tonnes to 35,288 tonnes due to poor equipment availability and wet ramps.

The grade also fell from 521ppm to 471ppm, but both are expected to revert to normal in the coming dry season.

Despite this production was 94 per cent of nameplate, with record recovery of 87.1 per cent on feed grades of 1,094ppm heading for designed 1,100ppm.