Paladin Energy Ltd PALAF

target price increase

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$0$0$0$0$0$0$0$0Australia uranium miners set for growth - Citigroup$0$0Tue Jul 7, 2009 9:20pm EDT$0$0SYDNEY, July 8 (Reuters) - Australian uranium companies are set for a new era of growth as a deficit builds up in the global uranium market, Citigroup analysts said in a report on the sector on Wednesday. The firm's Australian mining analysts said a deficit was likely after 2012 due to delays in starting new mines and expanding existing projects, while less uranium was coming onto the market from secondary sources.$0$0Citi expects the spot price for uranium oxide, or yellowcake, to edge up to $60 a pound (lb) in 2010/11 from a current spot price of $52/lb, although the price could move higher if there was further supply disruptions.$0$0Prices above $50/lb were likely to encourage new mine development and the expansion of existing mines, they said.$0$0Expansion plans are already being put in place by companies such as BHP Billiton (BHP.AX: Quote, Profile, Research, Stock Buzz) (BLT.L: Quote,Profile, Research, Stock Buzz), the owner of the Olympic Dam project that contains about one-third of the world's known uranium. There are also dozens of small uranium exploration companies in Australia hoping to move into production when market conditions are suitable.$0$0The firm's analysts said demand growth through to 2015 was largely pre-determined as new nuclear reactors came on-stream, tough demand from China might be stronger than anticipated.$0$0Citigroup upped its recommendation on Australia's top two listed pure uranium miners, Energy Resources Australia Ltd (ERA.AX: Quote, Profile,Research, Stock Buzz) and Paladin Energy Ltd (PDN.AX: Quote, Profile,Research, Stock Buzz), to buy.$0$0The firm put a price target of A$25.30 on ERA, up from a previous target of A$22.60. The stock was trading down 3.7 percent at A$20.06 at 0119 GMT.$0$0Paladin's price target was raised to A$5.40 from A$4.10. The stock was down 5 percent at A$4.17 on Wednesday.$0$0ERA, controlled by Rio Tinto Ltd (RIO.AX: Quote, Profile, Research, Stock Buzz)(RIO.L: Quote, Profile, Research, Stock Buzz), operates the Ranger uranium mine in Australia's Northern Territory while Paladin operates the Langer Heinrich uranium mine in Namibia, which it is expanding to a 5.2 million pounds a year operation. (Reporting by Bruce Hextall; Editing by James Thornhill)$0$0