Uranium One Inc. (TSX:UUU) is placing its Dominion project in South Africa on care and maintenance because of declining uranium prices, rising costs and a sluggish ramp-up at the site.

The result has been a "significant deterioration in the project's economics," Vancouver-headquartered Uranium One said Wednesday.

The decision follows detailed planning "which has shown that the project would require a sustained recovery in uranium prices, as well as significant additional capital investment, in order to become economically viable," the company stated.

"Uranium One is not able, in light of current credit and general market conditions, to incur the required additional capital investment at this time."

Uranium One had expected to produce 1.1 million pounds of uranium oxide from Dominion in 2009.

It is consulting the South African National Union of Mineworkers and its joint venture partners, while "exploring strategic alternatives ... including a sale or other disposition of its interest in the project and, absent any improvement in project economics, the potential closure of the project."

It also is contemplating a writedown of Dominion on its balance sheet.

Uranium One said it has "sufficient cash resources to permit it to continue with planned operational and capital expenditures in Kazakhstan and the United States, after providing for estimated suspension costs at Dominion." – The Canadian Press