Paladin Says Crunch May Scupper Some Uranium Projects

By Jesse Riseborough

Oct. 15 (Bloomberg) -- Paladin Energy Ltd., the Australian company producing uranium in Namibia, said the global credit crisis will delay or scupper planned industry projects, cutting supplies of the nuclear fuel.

``The impact of the credit tightness on the supply side of the uranium business will probably cause the deferral or cancellation of some planned uranium projects,'' Perth-based Paladin said today in a statement.

The worst U.S. financial crisis since the Great Depression has made banks more reluctant to lend money, raising global borrowing costs. JPMorgan Chase & Co. last week cut its uranium price forecast through to 2010, citing the potential for the freeze to slow nuclear power project development.

The credit crunch will also ``reduce the money available for exploration companies, which will only exacerbate the supply- demand imbalance in the future,'' Paladin said.

Paladin dropped 33 cents, or 13 percent to A$2.27 at 10:23 a.m. Sydney time on the Australian stock exchange. It's dropped 67 percent this year.

Still, ``reactor construction and forward planning for new plants continues strongly in China and other major Asian countries as well as in Russia,'' Paladin said. ``Demand for uranium in the medium to long term remains extremely strong.''

The company reported sales of $51 million in the three months to Sept. 30, from 878,000 pounds of uranium oxide at $58 a pound. It had $279.5 million in cash and construction of the Kayelekera project in Malawi remained on schedule to start in the first quarter next year, the company said.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net