Uranium Hits Record Levels

The price of uranium surged to a record $72 (U.S.) a pound, capping an extraordinary year for the radioactive metal which has now doubled over the past 12 months.

The spot price for the material used to fuel nuclear reactors jumped 9.9 per cent from a week earlier, according to Roswell, Georgia-based Ux Consulting Co.

The gains came after an auction last week of 260,000 pounds of uranium by Mestena Uranium LLC, a privately held producer based in Corpus Christi Texas.

Spot uranium prices have climbed from $36.25 a pound last January, to current levels as hedge funds and other financial investors have snapped up the commodity in anticipation of supply shortages amid increasing demand from energy producers.

In October, the world's largest uranium producer Cameco Inc. of Saskatoon, said it would delay production at its Cigar Lake Mine by at least a year, following a flood.

The mine was supposed to begin production in 2008 and eventually supply up to 10 per cent of the world's uranium needs.

Uranium related equities have soared this year in tandem with the rising spot prices. A Sprott Securities index of 37 uranium companies, consisting mostly of exploration firms or near-term producers, has gained an average of 182 per cent year to date.