Australian Uranium Blog

Uranium mining expansion facing delay, warns analyst
Tuesday March 17, 2009, 8:17 am

A resource analyst is warning the global financial crisis could force BHP Billiton to delay a planned expansion of the Olympic Dam mine in outback South Australia by at least two years.

He has told a conference in Adelaide that the uranium industry is enduring a major shake-out thanks to the downturn, but will survive.

Among an array of resources, Olympic Dam near Roxby Downs has the world’s largest known uranium deposit.

The SA Government has long heralded a massive expansion of the mine, saying it will underpin an economic boom.

But the financial crisis has already claimed 85 jobs at Olympic Dam and an expansion date of 2013 is not set in stone.

Resource analyst Warwick Grigor forecasts a delay.

“Olympic Dam is probably going to slip by at least two years in its timetable, if not longer,” he said.
EIS due soon

The SA Government insists the project will go ahead and is negotiating a new indenture agreement with BHP Billiton, ahead of the release of an environmental impact statement (EIS) in May.

Paul Heithersay, of Primary Industries and Resources SA, thinks the mine has a future despite the current downturn.

“Clearly nothing is going to touch Olympic Dam in terms of contained uranium and therefore exploring for more of the same seems a pretty good bet to me,” he said.

But a tough credit market and a 68 per cent plunge in ore prices is making life much tougher for the once red-hot uranium exploration industry.

Greg Hall, of Toro Energy, says there are still opportunities.

“While we’ve probably reduced the amount of exploration, we are still undertaking some very targeted exploration on significant potential projects,” he said.

Michael Angwin, of the Australian Uranium Association, thinks the industry will ride out the tough time.

“The increase in demand for nuclear power over the next 20 years or so will be between 50 and 100 per cent and Australia, with 40 per cent of the world’s low-cost uranium resources, is well-placed to meet that demand,” he said.

He says demand will be fuelled by a move towards low-carbon energy.

Veto Ranger mine expansion, ACF tells Govt

The mine’s general manger of business development says a leakage isn’t affecting Kakadu National Park.

Australian Conservation Foundation (ACF) spokesman Dave Sweeney says news that contaminated water is leaking from the mine’s tailings dam is proof the company cannot properly treat its waste.

Environmentalists are calling for the Federal Government to reject a proposal to expand the Ranger uranium mine, which lies within the boundaries of Kakadu National Park.

The company ERA has put forward plans to expand and also use an acid leaching method to retrieve uranium and other minerals.

Australian Conservation Foundation (ACF) spokesman Dave Sweeney says news that contaminated water is leaking from the mine’s tailings dam is proof the company cannot properly treat its waste.

“Ranger is failing now already,” he said.

“The last thing that we need is to expand that mine, expand the problems, expand the pollution.

“This mine should be being cleaned up and being phased out, certainly not expanding.”

ERA’s general manger of business development, David Patterson, says the leakage is not seeping into the park and the company has strict waste management regulations that are working.

“The office of the supervising scientist is well aware of the issue that they’ve raised and has confirmed each year that ERA has no impact on the surrounding environment,” he said.

Uranium Association calls for debate on nuclear power
Monday March 16, 2009, 4:32 pm
http://wotnews.com.au/view/3171072/

The Australian Uranium Association says there is no reason why Australia should not have a nuclear power industry.

Executive director Michael Angwin is attending a mining conference in Adelaide and says it is time for a renewed debate on nuclear power, given that Australia has 40 per cent of the world’s low cost uranium resources.

He says there are 31 countries using nuclear power in a growing industry world-wide.

Mr Angwin says emotion cannot be discounted from a nuclear power debate.

“There is lots of emotion in this debate and you need two things when you deal with either uranium or nuclear power,” he said.

“The first thing you need is facts, the second thing you need is engagement with your stakeholders so that you can able them to say what worries them and to deal with what worries them in a genuine and timely way.”

Mr Angwin says it makes sense to have the debate in Australia.

“If we have such a debate and we come out the other end without nuclear power it will be because we know we have better alternatives to it and if we come out the other end with nuclear power, then we will know that we’ve got it for good reasons,” he said.

Jerry Grandey, CEO of Cameco (CCJ), made some interesting comments concerning the long term uranium supply/demand balance at the Reuters Global Mining and Steel summit held in New York.
http://seekingalpha.com/article/125858-uranium-producers-worth-a-look
He said that the current lack of uranium supply expansion in the face of the current financial system difficulties coupled with the uncertainty of how Russia will react after the current Megatons to Megawatts deal expires in 2013 is setting up the uranium market for a future supply crunch. He was quoted as saying, “I think the financial crisis is clearly impacting the ability of every supplier to raise capital,” according to Reuters. “When you see project cancellations, you see expansion derail, you see some projects that will just go slower. That is just simply taking away future supply and sowing the seeds of the next spike in the uranium price.”

The current supply of uranium from mines is 115 million pounds per year against a demand of around 180 million pounds per year. Grandey said he expected demand to increase about 2-3% per year.

The deficit between supply and demand has been made up by decommissioning and downblend nuclear warhead material, primarily Russian warheads, under the Megatons to Megawatts program. This program is supposed to end in 2013 and the Russian atomic company Rosatom has been on the record that it does not intend to continue the program after 2013 as it has not been advantageous to Russia. This would be consistent for Russia as it has viewed full control and use of its resources as a cornerstone to a return to superpower status. The blueprint on how they would proceed can be seen by watching how they deal with their current oil and natural gas customers.

The current uranium price of $43.75 per pound is currently insufficient to stimulate sufficient new mine development in a timely enough manner to close the supply/demand gap. Although Cameco has had various problems lately that have impaired the stock price, especially around its Cigar Lake mine, the company still is the 800lb. gorilla in the uranium market. Smaller producers such as Paladin Resources (PALAF.PK), which is in the process of doubling its uranium out put and even Uranium One (SXRZF.PK), which appears to be stabilizing itself after its debacle at its South African uranium mine appear to be worth a look for the long term.

Interesting to see the differences between the Australian Uranium Index and the global uranium share index. It seems that the Australians are leading the charge… perhaps not suprising considering that Australia’s explorers and near term producers have such large resources….

–“World uranium requirements are forecast to increase faster than world supply in 2009,” the agency reports. “As a result, the uranium market is expected to remain in deficit for a sixth consecutive year. Supported by this deficit, spot prices are forecast to recover gradually in 2009 to end the year at around US$62 a pound…In 2010, the spot uranium price is forecast to average around US$70 a pound, an increase of 35 per cent on 2009 prices. Strong consumption growth and a decline in secondary supplies of uranium are forecast to support this price increase.”

The upcoming Queensland elections could become quite interesting when viewed from the question of whether it is right, rational or even  reasonable for the Bligh government to maintain the ban on uranium mining. The Federal labor party is now in favour of uranium mining…. Australia has around 40% of the world’s easily mined uranium and Qld has a fairly large proportion of Australia’s vast holdings.  So, what do you think:  Should Anna Bligh blithely chuck away literally billions of dollars worth of exports and the revenue derived from mining and selling Qld uranium?

Traditional owners continue ban on Koongarra uranium mining
Saturday February 28, 2009, 4:00 pm

Traditional owners in the NT’s Kakadu region have decided to continue a ban on mining at the $5 billion Koongarra uranium deposit.

The French company Areva wants to mine 14,000 tonnes of uranium at the site that is surrounded by Kakadu National Park.

The lucrative deposit sits three kilometres from Nourlangie Rock – a sacred art site and major tourist attraction.

Representatives of traditional owners, the Northern Land Council, Areva and the Territory and Federal governments met in Jabiru and Cooinda this week to discuss the future of the deposit.

Traditional owners decided mining should not go ahead at the site.

By law the matter can be revisited, but the NLC says it has been told by traditional owner Jeffrey Lee that he never wants to discuss the company’s proposal again.

The Land Council also says Mr Lee is still keen for the site to incorporated into Kakadu

Hi,
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You can see the daily changes in your favourite Alternative Energy Index at a glance.

In regard to the mining of uranium I wonder if Namibia has less country risk than Australia.
Several of Australia’s better uranium explorers have either moved to or have projects in Namibia. RIO, PDN, EXT, BMN, DYL all have significant resources of around 100m pounds.

Is it safe to invest there?