No future in sight for Yeelirrie or Kintyre uranium mines, nor for Olympic dam expansion
Uranium fall dents Olympic outlook BARRY FITZGERALD THE AUSTRALIAN MAY 27, 2014 BHP Billiton’s recasting of its expansion plans for its Olympic Dam copper/uranium mine in South Australia’s outback have been served up a new challenge — the collapse in uranium prices.
Spot uranium has fallen 30 per cent in the past 12 months to $US28.15 a pound, plunging most of the world’s uranium-only mines into losses. More telling has been the steady decline from the record price of $US137 a pound in mid-2007, due in part to the fall in demand in the wake of Japan’s Fukushima nuclear disaster in 2011.
BHP dropped plans for a big-bang expansion of Olympic Dam in mid-2012, blaming the $30 billion cancellation on the over-heated resources sector and the country’s high-cost environment. Concerns about uranium’s outlook post-Fukushima was also a factor……….
When it shelved the big-bang expansion plan, BHP said it would investigate a less capital-intensive design, and one that drew on new mining and processing technologies to improve the economics of the project.
BHP chief executive Andrew Mackenzie also undertook in September to say more about plans for the expansion “within about a year’’. While that timing is almost up, BHP’s considerations of what the price slump means for the future of what is the world’s biggest uranium deposit makes its planning for an expansion all the more complex.
Like the rest of the industry, BHP will be pinning its hopes on the restart of nuclear power plants in Japan, and the forecast surge in China’s nuclear power industry, to eventually produce more sustainable prices — in the context of being able to make a profit from the material at any rate……..
“uranium prices continue to suffer downward pressure and we do not see any reason to expect improvement soon.’’ -Tim Gitzel, the chief executive of Canadian uranium giant Cameco, which owns two of the world’s biggest undeveloped uranium deposits in Western Australia — Yeelirrie and Kintyre.
That means that neither Yeelirrie, acquired from BHP, and Kintyre, acquired from Rio Tinto, are about to be developed anytime soon…..
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