AREVA, the world's largest builder of nuclear reactors, plans to triple its investment in uranium mining to take advantage of higher prices for the metal and a revival in nuclear power projects.
The French state-controlled company, which is also the world's third-largest uranium producer, plans to triple its exploration spending to about 90 million euros (US$124 million) in the next few years, hiring hundreds of geologists and seeking partnerships and acquisitions, Olivier Mallet, the head of Areva's mining operations, said in an interview with Bloomberg News.
"We aim to triple our exploration budget, double the number of geologists and buy permits in Africa and Central Asia," Mallet said.
Areva spent 30 million euros on exploration in 2006 and has 150 geologists.
After almost two decades when prices barely budged and exploration investment came to a near-standstill, the uranium mining industry is picking up as global interest in nuclear power is rekindled and the ore's prices reach record highs. Demand is being fueled by energy-starved countries such as China and India that are looking for more power sources for their booming economies.
Areva's investment certificates rose 41 percent in the last 12 months.
"Areva's mining business is what has been driving the share price up in the past months," said Pierre Boucheny, an analyst at Kepler Equities in Paris. "Thanks to uranium prices, which should remain at high levels in the next years, the mining unit offers the biggest upward potential in terms of valuation."