Antinuclear

Our modelling of the economics of Toro Energy’s Wiluna uranium project found that the mine is unviable if Toro Energy has to pay even optimistic estimates for the decommissioning and rehabilitation of the site.

The public and the environment have quite a stake in most mining projects and uranium projects in particular. Not only is it the public’s own mineral resources that are being sold – it’s often forgotten that all mineral resources are held by the Crown in the name of the public – but the environmental impacts of mine closure can be serious if not carried out properly.

Properly cleaning up a uranium mine can be an expensive business, so here’s why the public should be interested in the finances of mining projects – if in 2030 Toro Energy cannot foot the bill, Western Australians will face the unpleasant choice of paying the bill or accepting a degraded, potentially radioactive landscape.

This is not just idle speculation. Most mine closures occur not because the resource has run out, but for economic reasons such as change in resource price, increases in costs, or unexpected changes in resource quality. So ensuring closure costs are built into the economics of the project is very important for the public.

So how do the economics of the Wiluna project stack up? According to our modelling – based on Toro Energy’s own cost figures – not well……

how much might it cost to close the Wiluna project and will the developers be able to afford this cost?  Uranium projects in Europe and the US have reported closure costs of between $US10 and $US14 per pound of uranium produced. Even the lower end of that range suggests a closure cost for Wiluna of around $150 million. Even if this wasn’t payable as an upfront bond – which the WA government requires – the project would still be unviable under our modelling.

For serious uranium investors, however, this discussion is academic. Investors are looking for lower costs and higher volumes than Wiluna can provide. The Wiluna project is a small resource with limited expansion opportunities and on a pound for pound basis it is far more expensive than most other proposed projects elsewhere in the world,…..

If a minor company such as Toro Energy were to attempt to develop the project, we must be sure that they will be able to finance an expensive clean-up operation when the project ends.
http://www.businessspectator.com.au/article/2013/5/28/science-environment/why-wiluna-worth-watching#ixzz2UeBhK6wU