Australia’s uranium industry digging anew hole – for its coffin?
Australia’s uranium industry in a hole Nuclear Monitor #789, August 2014 Developments in South Australia highlight the uranium industry’s ongoing problems. The opening of the state’s latest uranium mine − the Beverley Four Mile in-situ leach mine − would normally be accompanied by considerable fanfare. The Advertiser − a Murdoch tabloid, and the only mass circulation newspaper in the state − might be expected to parrot industry lies about jobs and export revenue.[1,2]
But as The Advertiser said: “South Australia’s newest mine will lose money and won’t create any jobs.” Part of the problem is that the uranium price is well below the cost of production. And General Atomics has put the nearby Beverley mine into care-and-maintenance and shifted the workforce to Beverley Four Mile − so no jobs have been created. Alliance Resources Ltd. which holds a 25% stake in Beverley Four Mile, is seeking to sell out of the project.[1,2]
The Honeymoon uranium mining, also in the north-east of South Australia, was equally underwhelming. Just months after first production in 2011, project partner Mitsui announced its decision to withdraw as it “could not foresee sufficient economic return from the project”. And last year the mine owner − a subsidiary of Russia’s Rosatom − put the mine into care-and-maintenance because it was running at a loss.
Another Murdoch newspaper, The Australian, says it may be years before uranium regains its “sexy sector”.[3]
In Western Australia, United Uranium, which holds several uranium exploration licences, has decided to get out of uranium exploration and instead focus on property development. The company said its strategic review “underlined a consistent theme, that junior resource companies and in particular uranium focussed companies, are currently ‘unloved’ by the investment community”.[4]
Also in Western Australia, Areva Resources Australia, a subsidiary of the French nuclear giant, has formally withdrawn from the North Canning exploration project because it was not viable. It is believed Areva spent up to A$5 million on the project. Aboriginal Traditional Owners in the region were opposed to the project and refused to negotiate with Areva.[5]
In June, RBC Capital Markets Analysts cut its 2014 spot price forecast to US$31.50 a pound, down from US$45. The 2015 target was cut to US$40 (from US$60), and targets for 2016−2018 fell to just US$40-US$45 from US$75-US$80. RBC believes the uranium market is going to be in surplus until 2021. “Active annual supply exceeds demand by a significant margin, and on top of that, significant excess inventories have been and continue to be accumulated post the Fukushima disaster, particularly in Japan,” RBC said, adding that it believes only four Japanese reactors will restart this year, and just 28 (out of 50) will be online by 2018.[6]
[2] www.abc.net.au/news/2014-06-25/four-mile-becomes-newest-uranium-mine/5549648
[4] www.miningaustralia.com.au/news/price-collapse-sees-junior-miner-ditch-uranium-to
[5] https://au.news.yahoo.com/thewest/business/wa/a/24679387/areva-quits-nw-nuke-project/
[6] http://business.financialpost.com/2014/06/05/rbc-annihilates-uranium-price-outlook/
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