Antinuclear

Australian news, and some related international items

Collapse of uranium market led to BHP and Cameco halting uranium mining projects

He [BHP CEO Marius Kloppers] said demand for uranium had collapsed after the Fukushima nuclear incident last year

The Olympic Dam and Yeelirrie shocks from BHP came hot on the heels of the decision by Canada’s Cameco to go slow on a development of its Kintyre uranium project in WA’s Great Sandy Desert 

Barnett tells miner to sell asset to other developers BY: ANDREW BURRELL  The Australian August 27, 2012  BHP Billiton has abandoned its controversial Yeelirrie uranium project in Western Australia, with chief executive Marius Kloppers saying the deposit is too small for the mining giant’s portfolio at a time of collapsing global demand.

Confirmation that the world’s biggest miner would not develop
Yeelirrie – which came after more than a year of denials – prompted WA
Premier Colin Barnett to call on the miner to sell the project to a
company that would develop it.

Mr Barnett’s “use it or lose it” stance could lead to BHP selling the
deposit to a smaller company such as Perth-based Paladin Energy or
Canada’s Cameco, which has uranium assets in WA.

“The state is keen to see the Yeelirrie uranium deposit developed and
if BHP does not wish to progress this project, we’d urge them to sell
the asset to someone who does want to develop it,” Mr Barnett told The
Australian.

Yeelirrie is Australia’s second-biggest unmined uranium deposit and
the biggest in WA. BHP announced in 2008 it would develop Yeelirrie
after Mr Barnett overturned a longstanding ban in WA on uranium
mining.

But last year, the miner suddenly stopped all work on environmental
approvals at the site near Wiluna, 950km northeast of Perth, citing a
failure to meet internal standards. It did not say whether those
standards concerned the quality of the deposit or the environmental
impact of the project. The project has been heavily targeted by
environmental activists.

Mr Kloppers said BHP’s future participation in the uranium market
would be solely through its Olympic Dam project in South Australia.
The company last week shelved a $US30 billion ($29bn) expansion at
Olympic Dam, blaming rising costs and weakening Chinese demand.

“We have no aspiration to acquire or build uranium-only mines because
generally speaking those mines are too small a scale to fit into our
portfolio and the product, quite candidly, is too small to fit into
our portfolio on its own,” Mr Kloppers said last week.

He said demand for uranium had collapsed after the Fukushima nuclear
incident last year and the supply side had also been affected “because
there were so many replacement mine developments.
The heady days of 2007 are a distant memory. The (spot) uranium price
is now less than $US50 a pound in response to two massive demand hits
– the 2008-09 global financial crisis (with its lasting energy demand
impacts in Europe), and last year’s Fukushima nuclear disaster in
Japan.

Fukushima was cited by BHP last week as a factor in the Olympic Dam
decision. It was not the main one. But the reduced global growth in
demand for uranium — put at as much as 8 per cent annually — is
likely to have played a bigger role in another bombshell BHP delivered
last week on its Yeelirrie uranium project in WA.

Chief executive Marius Kloppers said that BHP had “no aspiration to
acquire or build uranium-only mines”. Yeelirrie is a uranium-only
deposit, meaning BHP has dropped any intention of taking advantage of
the pro-uranium development stance of the Barnett government by
developing the deposit.

The Olympic Dam and Yeelirrie shocks from BHP came hot on the heels of the decision by Canada’s Cameco to go slow on a development of its Kintyre uranium project in WA’s Great Sandy Desert until uranium
prices improved……
Uranium prices are 34 per cent below where they need to be for Kintyre
to be a viable project, Cameco said….. Cameco and its 30 per cent
partner, Japan’s Mitsubishi Development, will not begin development of
what would have been WA’s first uranium mine in early 2014 as first
planned.

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August 27, 2012 - Posted by | business, uranium, Western Australia

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