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Paladin Energy generates record revenue in March quarter on uranium sales

Paladin Energy generates record revenue in March quarter on uranium sales

Uranium miner Paladin Energy (ASX: PDN) generated record revenue in the last quarter on strong commodity prices before the earthquake and tsunami in Japan cast a spotlight on the question of the safety of nuclear power.

Paladin increased uranium production by 47% to 4.231 million pounds uranium in the quarter, generating record quarterly revenue of US$92.5 million.

However, the shallow 9.0 Tohoku earthquake on 11 March 2011 off the coast of Japan caused significant accidents at four nuclear power plants in Japan  with the release of radioactive material from the Fukushima I Power Plant.

Paladin addressed the issue in the company’s recent quarterly report reminding readers that “nuclear power still has an impressive safety record when judged alongside other energy sources.”

Uranium prices fell sharply after the earthquake, but have recovered to around US$56.50 per pound.
Paladin said “the market for uranium will not change significantly in the aftermath of the Fukushima emergency unless financial markets temporarily withdraw support for new uranium producer, which will exacerbate present and predicted uranium supply shortfalls.”

The accidents in Japan haven’t slowed the construction of nuclear reactors in China.

The world’s most populous nation currently has 14 nuclear power reactors in operation with more than 25 currently under construction. The country currently sources 80% of its energy from coal.

Paladin says this kind of construction could put pressure on uranium prices as, “the uranium supply/demand imbalance is real and will widen as existing and new plants under construction continue to consume current and future uranium production capacity.”

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