AngloGold to boost uranium output

By Eric Onstad

JOHANNESBURG (Reuters) - South Africa's AngloGold Ashanti (ANGJ.J: Quote, Profile, Research, Stock Buzz) plans to boost its uranium capacity by about a quarter to 1.9 million lbs a year by 2009 and is seeking further opportunities in the sector, its chief executive said on Wednesday.

From 2009, uranium will become more lucrative for the firm since it will be able to renegotiate low-priced contracts, Bobby Godsell told the Reuters Global Mining and Steel Summit in London by telephone from Johannesburg.

"Towards the end of 2009, uranium should become a much more significant value generator in the company," he said.

"We would happily and energetically look at new uranium opportunities ... joint ventures or any other form of ownership instrument."

AngloGold, the world's third-biggest gold producer, is South Africa's biggest uranium producer, with capacity of 1.5 million lbs per year, but the firm is locked into contracts at prices of $15-$20 per lb.

This is in sharp contrast to the spot price of uranium, which shot up to $125 per lb this week from $7 in 2000.

"We think that the long-term price factors for uranium are at least as good as gold, and perhaps in some sense even better. We'd just love to get our hands on more uranium," Godsell said.

AngloGold is already examining how it can boost uranium resources within the firm by exploiting its waste tailings dams, he added.

The company also runs the country's only first-stage enrichment plant, he added.

At the moment, uranium makes a minor profit contribution to the company, so the assets would not be worth spinning off, but this could be revisited after 2009.

"I don't think at the moment there's a compelling case for a separate business instrument ... but that may well change. For the moment, our concentration is on increasing our production and getting ourselves to a position where we can re-price at better prices."

On Tuesday, Harmony Gold's (HARJ.J: Quote, Profile, Research, Stock Buzz) CEO told Reuters he wanted to spin off and list his firm's uranium assets in the next 18-30 months.