April 8 (Bloomberg) -- Toro Energy Ltd., the uranium explorer planning a A$269 million ($279 million) project in Western Australia, said it’s in talks with seven potential partners in Japan, China and South Korea.
Toro plans to bring in a company to help develop the Wiluna uranium mine before reaching an investment decision to go ahead with the project by the end of 2013, Managing Director Vanessa Guthrie said by phone today from Perth. Toro, whose project won Australian government approval last week, expects to offer a stake ranging from about 30 percent to more than 50 percent of the mine as part of a supply agreement, she said.
Wiluna, the first new Australian uranium mine to receive state and federal approval in about four years, is expected to start production by the end of 2015, in time to benefit from a looming supply deficit, the Adelaide-based company said April 2. Toro’s uranium project, located about 1,000 kilometers (620 miles) northeast of Perth, has drawn interest from Asian trading companies and nuclear utilities, Guthrie said.
“We’re seeing a supply shortfall from 2016 onwards starting to drive potential partners and customers to look to secure supply,” she said, declining to identify any possible partners by name. “For new uranium projects, there are very few that are going to start in that window.”
Lower prices have slowed development of some projects. BHP Billiton Ltd. last year deferred a decision to expand the Olympic Dam uranium and copper mine in Australia. Cameco Corp. earlier this year reported a C$168 million ($165 million) writedown on its Kintyre project in Australia, reiterating that it wouldn’t be viable without a uranium price of about $67 a pound.
Uranium traded at $42.15 a pound on April 5, according to data compiled by Bloomberg. The nuclear fuel traded at $67.50 before the March 2011 earthquake and tsunami struck Japan, triggering the worst atomic disaster since Chernobyl in 1986.
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