Uranium Energy Says Quake Reaction Means World Shortfall

Uranium Energy Corp. (UEC), a U.S. miner and processor of the nuclear fuel, said global supplies will fall short as exploration investment is curtailed following the Japanese nuclear crisis.

The Global X Uranium ETF (URA), which tracks uranium-mining companies, has fallen 21 percent since March 10, the day before Japan’s strongest earthquake on record and a tsunami triggered explosions and radiation leaks at the Fukushima Dai-Ichi nuclear plant. Australian uranium miner Mantra Resources Ltd. last month agreed to a 12 percent cut in the takeover offer from Russia’s state-owned Rosatom Corp. because of the crisis.

Annual uranium use exceeds production by 50 million pounds following the damage done to Fukushima, said Amir Adnani, chief executive officer of Corpus Cristi, Texas-based Uranium Energy.

“Because of Fukushima, because of the response, the knee- jerk reaction, the expansion is not going to happen at an adequate pace to fill the current deficit and meet growing demand,” Adnani said in a April 13 phone interview from London.

Uranium Energy rose 6 cents, or 1.5 percent, to $4.09 as of 4:15 p.m. in American Stock Exchange trading. The shares have slumped 13 percent since the earthquake.

Still, Adnani said he doesn’t anticipate a negative impact on Uranium Energy because its Palangana mine in Texas started production in late November.

“Everything we had to do to start production was completed before Fukushima and what seems now to be a tougher environment,” he said.

The price of U3O8, the trade form of uranium, declined 14 percent since the earthquake to $57.50 a pound, according to data from MF Global Holdings Ltd.

Nuclear power provides for about 20 percent of U.S. electricity, according to the U.S. Energy Information Administration.

To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net.