Uranium pot stirs in Australia

Perth, Western Australia — In the early 1970s, Australia seemed like a new force in the global uranium industry: in the span of a few years, explorers Down Under were able to prove up 26% of the world’s global reserves.

But the policies of the socialist federal government led by the Labour party’s Gough Whitlam, coupled with “smart thinkers” in the anti-mining lobby, scuppered most of these projects. In addition to restrictive legislation, the government created new national parks and Aboriginal land title claims in the heart of areas known to be prospective for uranium. Frustrated developers accused the politicians of having handed the global uranium market to Canada.

While there has been some progress in recent years, mainly as a result of North Americans starting up mines in South Australia, most of the country’s uranium projects remain mothballed; indeed, some targets have not been drilled for at least 20 years.

The few mine development projects that have occurred are the result of participation by the Liberal party. Overall, though, the approach has been to refuse to approve new uranium mines while, at the same time, not obstructing mines that are already operating.

But things are changing now that the price of uranium has escalated and word is spreading of a growing shortage of uranium for nuclear power.

The managing director of Summit Resources, Allan Eggers, says the change in public opinion about uranium mining in Australia is profound. Open protests are a thing of the past. Summit is sitting on three significant uranium deposits near the inland copper mining city of Mount Isa, and will undertake more work to upgrade the resource.

Summit has formed an equal partnership with Resolute Mining on the Valhalla and Skal deposits, and owns all of the nearby Anderson project. Combined, these projects provide Summit with an attributable resource of 68 million lbs. U3O8, with a potential in-ground value of A$1.8 billion.

South Australia is the world’s second-largest supplier of uranium after Canada. Star performers include WMC Resources‘ (WMC-N) Olympic Dam copper-uranium-gold mine, Heathgate Resources‘ in situ leach operation at Beverley, near Lake Frome, and Southern Cross Resources‘ (SXR-T) Honeymoon project, near Broken Hill. There is also the maturing Ranger mine in the Northern Territory, run by Energy Resources of Australia.

In the same region, Energy Resources holds the Jabiluka deposit, which has a proven and probable reserve of 13.8 million tonnes grading 0.51% U3O8 plus a measured and inferred 31 million tonnes grading 0.52% U3O8. Jabiluka, discovered by the original Pancontinental Mining Co. back in the 1970s, also has a shallow gold cap containing 500,000 oz.

Xstrata (XTA-L) is making a bid for WMC in order to acquire the Olympic Dam project, which is gearing up to expand production of both copper and uranium.

Meanwhile, in Namibia, Africa, durable Aussie uranium explorer Paladin Resources plans to ramp up production at the Langer Heinrich mine to more than 1,000 tonnes annually, and also hopes to have the Kaylekera project in Malawi operating on a smaller scale. Paladin’s managing director, John Borshoff, says potential customers keen to use this uranium from Africa include major American utilities.

China will undoubtedly be a catalyst for new uranium projects as its voracious appetite for raw and upgraded commodities continues. The John Howard government in Canberra, Australia, is keen to ensure Australia is at the forefront of increased trade between the two nations, and a committee has been set up to consider ways of making Australian uranium deposits more accessible.

Industry sources say the Chinese have made it clear that Australian uranium must be on the agenda, as the country looks at strengthening its nuclear power status, particularly in light of the huge pollution being created by the country’s ash-laden domestic coal.

— The author is a freelance writer based in Perth, Western Australia.