Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Uranium Energy (NYSE: UEC) has agreed to buy Rio Tinto’s (ASX, LON, NYSE: RIO) assets in Wyoming, US, which include the fully-licensed Sweetwater plant and a portfolio of uranium mining projects.
The uranium producer and explorer said the $175 million cash deal would give it key assets that will allow it to boost production, providing opportunities for synergy with its other projects in Wyoming’s Great Divide Basin.
Uranium Energy estimates the transaction, to be closed in the fourth-quarter of 2024 calendar year, would add about 175 million pounds of historic resources.
“These assets will unlock tremendous value by establishing our third hub-and-spoke production platform and cement [Uranium Energy] as the leading uranium developer in Wyoming and the US,” chief executive Amir Adnani said in the statement.
The Sweetwater plant is a 3,000 tonne per day conventional processing mill with a licensed capacity of 4.1 million pounds of triuranium octoxide (U3O8), a compound of uranium.
Uranium Energy will also add Red Desert, a development-stage uranium project, encompassing approximately 20,005 acres of exploration and mining rights, and the Green Mountain project, located 35km (22 miles) north of the Sweetwater plant.
The Texas-based company said the move was a response to “unprecedented” demand for uranium and nuclear energy. This spike, it said, is being fuelled by ongoing geopolitical events, the escalating need for reliable clean energy, and the rapid adoption of AI technologies.
Shares in Uranium Energy jumped on the news, up 2.7% to $5.69 in pre-market trading on the NYSE American exchange, formerly known as the American Stock Exchange, and more recently as NYSE MKT. This leaves the company’s market capitalization at $2.26 billion.
