By Greg Peel

One might be forgiven for fearing that by the end of last week, spot uranium may have been hit hard by festering economic fears in the US and Europe. Base metals certainly took a hit. However it was not the case.

Industry consultant TradeTech notes sellers were willing to push the price lower as the week progressed in order to find buyers, but by week's end the consultant's spot price indicator had fallen only US50c to US$51.50/lb. The week before saw a US25c rise.

A total of seven transactions were conducted for over 900,00lbs of U3O8 equivalent. Some buying interest has since emerged, nevertheless, with two non-US utilities seeking offers for a total of around 500,000lbs. There were no transactions conducted in the term market last week, TradeTech reports.

Last week Energy Resources of Australia ((ERA)) announced a decision not to go ahead with the heap leach facility it long had planned for its Ranger mine. The company also detailed substantial costs for the establishment of de-watering measures intended to prevent any further flooding at Ranger in severe wet weather events, as were experienced earlier this year.

Neither decisions were a surprise to analysts, and ERA has become very much a long term proposition. But even that proposition depends on the company's decision whether or not to go ahead with the Ranger Deeps underground mining expansion plan. With Jabiluka hopes apparently endlessly tied up in indigenous landowner opposition, it would seem ERA's sheer existence is all about a go ahead for the Deeps. Without it, ERA would most likely wind down. A handful of analysts are assuming a risk-weighted probability of approval in their valuations, although most analysts are now looking at ERA as a "binary" proposition. The Deeps project would be very valuable for the company, they acknowledge, but given the risk of a negative decision the stock cannot, in many eyes, be considered "investment grade".

Prior to ERA's result, Paladin Energy ((PDN)) reported on its quarterly production. Delays experienced in the Kayelekera ramp-up and the Langer expansion in Namibia lead to disappointing results, and revenues were also hampered by lower uranium prices. There is a hope that Paladin has now ironed out most of its issues, but philosophically there are fears held for future global nuclear energy demand.

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