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.