As I write, shares of Cameco
The fact that Canada and India are poised to sign a nuclear cooperation agreement certainly doesn't hurt. The Canada-based company recently deemed India "a large market opportunity for any uranium fuel supplier." However, we need to look to Australia for the proximate cause.
A couple of weeks ago, there was an incident at BHP Billiton's
Only this week, with the release of BHP's quarterly production figures, did the extent of the problem begin to come into focus. The Australian first reported that the company had declared force majeure on some uranium supply contracts, and may see production drop to 20% of capacity for up to six months. BHP then confirmed the former point, and stated that full output should resume by the end of March, with ore hoisting at 25% of capacity until then.
The market for uranium is very thin, so it didn't take much to move the spot price. The miners have jumped as well. Denison Mines
The uranium market has seen some serious mine mishaps in the past. Compared to the flooding at Cameco's Cigar Lake mine, this looks like pretty small potatoes. It's always possible that the damage could be worse than expected, but I would not be rushing into one of the uranium miners on account of this haulage shaft hoopla.
Fool contributor Toby Shute doesn't have a position in any company mentioned in this article. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool owns shares of Cameco and has a disclosure policy to prevent mishaps.