Uranium key to WMC's defence

WMC, the Australian mining company fighting off a hostile bid from the London-listed Xstrata, said yesterday it would account for one-fifth of the world's uranium production within the next few years.

WMC, the Australian mining company fighting off a hostile bid from the London-listed Xstrata, said yesterday it would account for one-fifth of the world's uranium production within the next few years.

In London as part of a "charm offensive", WMC's chief executive, Andrew Michelmore, said the company was ready to ramp up production from its massive Olympic Dam mine, just as the uranium market entered an unprecedented phase.

"Olympic Dam now represents about a third of the world's economically recoverable uranium resources, which is huge," he said. "For the first time, production is far below demand and requirements are still growing."

He said the world is again turning to nuclear energy, with many arguing it is a "green" technology, given that it gives off no greenhouse gases. Mr Michelmore said the Xstrata bid - pitched at 6.35 Australian dollars (£2.57) a share and worth A$7.4bn (£3bn) - failed to recognise the future value of the company's uranium output.

In 2004, WMC produced 4,400 tonnes of uranium oxide, about 9 per cent of world output. Mr Michelmore said by 2012, production would be 13,000 tonnes - a 20 per cent market share.