The uranium, which may be as much as 500,000 pounds, might fetch $20 million at today’s prices of about $40 per pound, said traders who asked not to be named because of the confidential nature of the data. Marsal said the traders’ estimate of Lehman’s uranium holding is “reasonable,” while declining to be more specific.
Uranium has dropped for five straight months from $55 a pound on Dec. 1 on concerns that countries including China and India would delay nuclear power projects because of the global economic crisis, and because Lehman might dump its radioactive material on the market, the traders said.
The market is regulated by governments, who control transport of radioactive material and limit the number of buyers and sellers by requiring them to obtain licenses. Utilities and producers are key buyers and sellers. Lehman got its license just a month before its bankruptcy, one of the traders said. A supply of 500,000 pounds of yellowcake is just “slightly” less than the amount needed to make one bomb, or fuel one nuclear power reactor for a year, if the latest enrichment technologies are used, said Gennady Pshakin, an Obninsk, Russia-based nonproliferation expert.
Lehman “tested” the uranium market after its bankruptcy filing in an effort to raise cash, pulling back after it did because “everyone was low balling,” Marsal said. With $10 billion in the till today from other asset sales, Lehman isn’t in a hurry any longer to sell uranium, he said.
“We plan on gradually selling this material over the next two years,” he said. “We are not dumping this on the market and have no fire-sale mentality.”
Lehman’s bankruptcy forced it to liquidate assets to pay creditors. Some $400 billion out of $639 billion in assets were offset by matching liabilities, Marsal said.
http://www.bloomberg.com/apps/news?pid=2...