Paladin faces second lawsuit over uranium forecast

Australia’s Paladin Energy (ASX: PDN) is facing the prospect of a second class action lawsuit tied to its production guidance.

The new legal action, if initiated, would unfold in the Supreme Court of Victoria in Melbourne and mirrors claims made in a separate class action alleging the uranium miner misled investors.

The potential new proceedings focus on disclosures made between June 27, 2024, and March 25, 2025. The other suit accuses Paladin of misleading investors and breaching ASX continuous disclosure rules between June 27 and November 11, 2024. Both actions centre on Paladin’s uranium production forecasts.

“Paladin intends to strongly defend any proceedings in relation to those matters, if they are commenced,” the uranium producer said on Thursday.

The Perth, Australia-based company restarted its flagship Langer Heinrich mine in Namibia in late 2023, after a five-year shutdown. It issued its first production guidance for fiscal 2025 on June 27, targeting 4 million to 4.5 million lb. of uranium oxide (U₃O₈). That forecast was revised downward in November to 3 million to 3.6 million lb. due to inconsistent ore stockpiles and water supply disruptions. 

Then in March, after unseasonal heavy rainfall further impacted operations, Paladin scrapped its 2025 guidance entirely. It also acknowledged that it no longer expects to hit its nameplate production run rate of 6 million lb. by the end of calendar 2025.

Investor frustration has grown, with shares down sharply — from A$15.66 a year ago to A$6.24 on Friday. The company’s market cap stands at A$2.5 billion ($1.6 billion).

Regaining traction

Despite setbacks, Paladin and most uranium miners remain bullish on long-term prospects. As global momentum behind nuclear energy accelerates, driven by countries like India and the UK, demand for uranium is projected to soar. Yet supply is forecast to stagnate, then fall post-2029 due to underinvestment and long lead times for new projects. That looming imbalance could ignite a major price surge, reminiscent of the uranium shock of 2007.

With uranium mining banned in Western Australia and Queensland, Paladin is actively seeking growth opportunities abroad. It maintains that primary uranium production is insufficient and likely to stay that way.

The uranium market has already shown signs of recovery. Spot prices rebounded 5.4% in April to $67.70 per lb., rising further to $70 a lb. in early May. That’s a 10% increase from this year’s lows. The long-term contract price has remained steady at $80, underlining strong long-term fundamentals.

With more than half of global uranium output concentrated in just 10 mines, most with declining grades, the spotlight is turning to junior miners. According to the International Atomic Energy Agency, uranium demand is expected to more than double by 2040, exceeding 100,000 tonnes annually. Currently, two-thirds of global supply comes from just three countries: Kazakhstan, Canada and Australia.