Chile’s miners did indeed protest proposed reforms in mining labor law by blocking road access to some of the country’s biggest mines — including Escondida, Lomas Bayas, and Mantos Blancos. And union leaders warned that mining companies “will see more” such action. Stay tuned.
But there was better news for the mining business this week in a different sector: uranium. Where working conditions appear to be improving for the world’s major producers.
That was the conclusion from research published Tuesday by mining analysts CRU. Who said that costs are coming down across the global uranium mining industry.
Here’s the most critical point. CRU said this is the first year since 2010 that uranium production costs have declined. Showing that the downturn in the sector is just now starting to catch up with cost pressures.
But the savings being enjoyed are a big boost for miners. With CRU noting that a “majority” of producers are now profitable, even at today’s lower prices. As the chart below shows, 80% of uranium mines on CRU’s new cost curve are below the spot price — while 94% of mines come in below current contract prices.
Of course, there’s still a fair amount of disparity across the cost curve. With CRU finding that Kazakhstan’s in-situ leach projects are still the world’s lowest-cost producers. Followed by Canada’s underground mines.
But the fact that costs are coming down nearly everywhere is very good news for the industry. Watch for stealthily rising profits from producers — and keep an eye on currency exchange rates against the dollar as a key input going forward.