Writing on the wall for Paladin Energy Ltd, The Motley Fool, Mike King – December 1, 2016 Uranium miner Paladin Energy Ltd (ASX: PDN) faces the prospect of being unable to repay US$212 million due in April 2017 and being forced into liquidation.
The troubled company has seen its share price slump more than 65% this year alone. The planned sale of 24% of its Langer Heinrich Mine (LHM) to CNNC Overseas Uranium Holdings (COUH) for US$175 million appears unlikely to complete before the end of 2016. Now Paladin has been forced to consider other ‘contingencies’ to repay the 2017 convertible bonds.
Not only that but Paladin also needs to raise working capital as it struggles to generate positive cash flow with uranium prices trading under US$20 per pound – the lowest prices in more than 12 years. As Paladin admits, that’s a level that no producer in the world can sustainably break even, and most producers are experiencing negative cash flows.
That’s a long way away from Paladin’s all-in cash expenditure of extracting uranium of US$38.75 per pound (lb). Even the company’s C1 cash costs of US$25.88/lb are well above the spot price of uranium. Paladin is forecasting all-in costs of around US$30/lb for the 2017 financial year, but it’s clear that even at that level, the company is going backwards.
Energy Resources of Australia Limited (ASX: ERA), majority owned by Rio Tinto Limited(ASX: RIO) faces a similar prospect to Paladin and is likely to shut up shop in 2021, once it has finished processing stockpiles at its Ranger uranium mine.
The problem for uranium miners around the world is that since the Fukushima nuclear incident in 2011, uranium prices have steadily fallen from above US$60/lb to its current price under US$20/lb……
Paladin faces the prospect of sinking into administration unless it can find a white knight willing to take a minority stake in its mine – or make an outright bid for the whole company.
That appears highly unlikely. http://www.fool.com.au/2016/12/01/writing-on-the-wall-for-paladin-energy-ltd/
Toro Energy rings in the changes at the top as Dr Vanessa Guthrie departs http://www.proactiveinvestors.com.au/companies/news/169921/toro-energy-rings-in-the-changes-at-the-top-as-dr-vanessa-guthrie-departs-169921.html
05 Dec 2016 Toro Energy (ASX:TOE) has outlined this morning that long-serving managing director, Dr Vanessa Guthrie, will depart the company immediately. Toro’s flagship asset is the Wiluna Uranium Project.
Major parties push a losing uranium sector to India at great risk http://www.smh.com.au/comment/major-parties-push-a-losing-uranium-sector-to-india-at-great-risk-20161128-gszld4.html Dave Sweeney , 29 Nov 16
With little fuss or fanfare, Australia’s two major parties have this week agreed to fly under the radioactive radar and pass an innocuous enough sounding law with some very far reaching implications.
The Indian Civil Nuclear Transfers Act exists to provide “certainty to Australian uranium producers” who want to sell the controversial product to India.
In 2015 a detailed investigation by Parliament’s treaties committee found there were serious and unresolved nuclear safety, security and governance issues with the proposed sales plan. It also found a high level of legal uncertainty. Continue reading
The Federal Government …remains resistant to an independent cost-benefit assessment of Australia’s uranium trade, as directly requested by the then UN secretary general Ban Ki Moon in the wake of Fukushima.
instead of the requested industry review there has been a retreat from responsibility and a rush to rip and ship more uranium ore by fast-tracking risky and contested new uranium sales deals, including to India and Ukraine.
Despite Canberra’s irresponsible fire sale approach the Australian uranium sector is facing tough times…..
On shaky ground: Australian uranium and Fukushima https://independentaustralia.net/politics/politics-display/on-shaky-ground-australian-uranium-and-fukushima,9778 Dave Sweeney 28 November 2016
THE POWERFUL EARTHQUAKE that struck off the coast of Fukushima prefecture in Japan last week, is a stark reminder of the deep and continuing safety concerns following the 2011 nuclear disaster.
The stricken reactor complex remains polluted and porous and every added complication leads to further contamination.
Closer to home the renewed tectonic instability highlights the need for urgent Australian government action on the industry that directly fuelled the continuing nuclear crisis.
In October 2011, Robert Floyd, the director general of the Department of Foregn Affairs and Trade (DFAT) Australian Safeguards and Non-Proliferation Office (ASNO) confirmed to the Federal Parliament that
“Australian obligated nuclear material [uranium] was at the Fukushima Daiichi site and in each of the reactors.”
Earlier this week without fanfare, a group of federal politicians gathered to take a very quick look at an issue with very long consequences. As far as ideas go, a uranium sales deal between the country that fuelled Fukushima and the one that gave the world Chernobyl doesn’t sound like a good one.
And it’s not. There are serious and unresolved nuclear security, safety and governance concerns with the plan and putting more unstable nuclear material into a deeply politically unstable part of the world is force-feeding risk.
There is a lack of detailed information to support the safety and safeguards assumptions underpinning the proposed treaty action, and DFAT’s National Interest Analysis of the plan is deeply deficient, especially in relation to key safeguards and security concerns and the implications of the Russian conflict.
The NIA’s under-stated noting ‘that political tensions currently exist between Ukraine and Russia’ completely fails to recognise or reflect the gravity of the situation. Continue reading
16th November 2016 Company Directors of BHP Billiton will face some difficult questions tomorrow at the mining giants Annual General Meeting in Brisbane. The operator of the Olympic Dam uranium mine in South Australia’s north has been receiving much attention over the past year after the tailings dam collapse at its jointly owned Samarco iron ore mine in Brazil in November 2015, causing what’s been described as the worst environmental disaster in Brazil’s history.
Anti-nuclear and social justice campaigner Adam Sharah is one of several delegates attending the meeting to challenge company directors on matters including the Samarco disaster and issues surrounding the Olympic Dam mine. Mr Sharah will question company directors about BHP Billiton’s position regarding nuclear regulation in Australia, new expansion plans for Olympic Dam, and plans to increase the height of the tailings dams at the mine.
In its submission to the recent South Australian Royal Commission into the Nuclear Fuel Cycle, BHP Billiton recommended that nuclear actions should not be regulated under the federal Environment Protection and Biodiversity Conservation Act, the key piece of legislation for environmental protection in Australia, on the basis that uranium is just like any other mineral. The company claims that “there is no scientific basis for uranium mining to be defined as a Matter of Environmental Significance…”
“BHP Billiton is in la la land if they still believe that uranium is just like any other metal – no other metal has such an enormous range of international treaties – uranium is fundamentally risky, and BHP Billiton should act accordingly,” said leading Environmental Engineering academic, Dr Gavin Mudd.
“What would have been the impact of the tailings dam collapse in Brazil if the tailings were radioactive?” asks Adam Sharah. “Uranium and the tailings produced by uranium mining are unique both in their health and long term environmental impacts.”
“In the wake of the tailings dam collapse in Brazil, there are concerns here in Australia about reports that BHP Billiton are seeking approval to increase the height of their tailings dams at the Olympic Dam mine,” continued Mr Sharah. “It is important that the company clarify this for the Australian public, Aboriginal custodians of the area, and its shareholders.”
Mr Sharah will also seek clarification on the progress of the company’s plans for an on-site heap leach trial at Olympic Dam as part of a cheaper expansion plan, after it shelved it’s grand expansion plans in 2012.
“It is always a concern when corporations start seeking cheaper, cost-cutting alternatives,” said Nectaria Calan, of BHP Billiton Watch. “These concerns are magnified by the fact that federal approval of the heap leach trial did not require any environmental assessment even though heap leach mining is not a method currently used on-site at the Olympic Dam mine.”
“Yet despite by-passing environmental assessment for the trial, and despite the legal privileges and exemptions BHP Billiton enjoy under the Indenture Act, which only applies to the Olympic Dam mine, the company is still lobbying through forums such as the Nuclear Fuel Cycle Royal Commission to reduce regulation further. This type of regulatory race to the bottom, characteristic of third world nations competing for foreign capital, will only make disasters like Brazils more common.”
BHP Billiton’s AGM will be held on Thursday 17th November, 11 am, Brisbane Convention and Exhibition Centre
Miner contemplates NT town’s future http://www.news.com.au/national/breaking-news/miner-contemplates-nt-towns-future/news-story/ebc248cbfd26edd555465ae79964e8ad NOVEMBER 15, 2016
Discussions over the future of a community near the Northern Territory’s Kakadu National Park have begun as a mining company prepares to pull out.
Jabiru town was built for a uranium mine which has been operating for more than three decades.
It was always intended to be temporary and its head lease will expire in about four years.
ERA operates the Ranger mine and has started a social impact assessment (SIA) to determine a transition and rehabilitation strategy for the township.
ERA says it’s not developing a plan for the future of Jabiru beyond the lease expiration in 2021 when production stops, which is expected to cost 350 jobs.
“It is important to note that a separate process involving the commonwealth government, Northern Territory government and traditional owner representatives has commenced to develop and agree a future plan for Jabiru,” ERA said.
“The outcome of those discussions will also have a significant influence on ERA’s plans.”
Traditional owners warn that if the NT government doesn’t commit to the town’s future it will effectively be demolished.
Justin O’Brien, chief executive of the Gundjeihmi Aboriginal Corporation which represents traditional owners, says Jabiru is the gateway to Kakadu and should continue to function without the mine.
“It’s about maintaining this town and maintaining essential services,” he told ABC local radio.
Jabiru residents and local business owners have been invited to attend 30 information sessions in November and Deccember, while more will take place early next year.
The aggressive neo-liberal land grab is dividing Aboriginal communities and even brothers. As one Traditional Owner in the
Northern Territory told me recently, “these mining deals can give one or two families a big pay but generally they don’t improve the
community. Money goes on a few new cars and more grog comes in. We never see things get better but someone is getting very rich on our land.”
In the Kimberley and Pilbara in Western Australia, across the Northern Territory, on Cape York and in parts of NSW and South Australia, it is disturbing to see the divide and conquer tactics of mining companies and governments………..
Privatisation of land is the neo-liberal spearhead hurled deep into the heart of the traditional Aboriginal way of life……..
The Intervention’s extraordinary damage to the Aboriginal sense of control and wellbeing makes it the gravest policy disaster in
Australia since the removal of Aboriginal children in the Stolen Generations.
THE WAY AHEAD: The new land grab Tracker, BY JEFF MCMULLEN, JUNE 21, 2013 NATIONAL: Neo-liberalism is a
hungry beast and this 21st Century strain of capitalism is shaping the agenda for control of Aboriginal lands, writes JEFF MCMULLEN.
You only have to listen to Professor Marcia Langton’s Boyer Lectures on ABC Radio or read Noel Pearson’s sermons on acquisition to see how this virulent form of free-market fundamentalism has gathered influential adherents, including policy makers in both political
Australian Government policy is heavily influenced by neo-liberalism through its extraordinary emphasis on managing access for mining
companies to resources on Aboriginal lands. This involves controlling what is still perceived as ‘the Aboriginal problem’ and forcing a
social transition from traditional values and Cultural practice to ‘mainstream’ modernism of a particular brand. It also involves
displacing many Aboriginal people from their traditional lands and concentrating them in ‘growth towns’. Continue reading
WA uranium mines: Race for environmental ticks in Goldfields before WA election, conservationists say http://www.abc.net.au/news/2016-10-14/wa-uranium-mine-approvals-race-ahead-of-wa-election-cc-says/7931254 By David Weber, 14 Oct 16, Proponents of uranium mines in Western Australia are racing to gain environmental approvals ahead of the state election, in case Labor wins, according to the Conservation Council.
Three projects in the Goldfields are at various stages of assessment.
They include Vimy Resources’ proposed mine at Mulga Rock, Toro Energy’s proposal to mine near Wiluna, and Cameco’s nearby Yeelirrie project.
The Council’s anti-nuclear campaigner, Mia Pepper, said companies were seeking security for the projects. “Certainly we are getting the sense that [for] the three uranium projects that’re under assessment … they’re clearly seeking some level of approval before the state election,” she said.
The Environmental Protection Authority (EPA) has recommended conditional approval for Toro Energy’s proposal, 30 kilometres south of Wiluna.
Cameco’s project at Yeelirrie, 70 kilometres south-west of the town, was knocked back after the EPA said there was too much risk to the subterranean fauna. However the EPA in August recommended the green light for Vimy’s project at Mulga Rock, 260 kilometres north-east of Kalgoorlie, and preliminary site works have been given the go-ahead.
Approvals could lead to ‘pressure’ on Labor Ms Pepper has met the EPA appeals convenor expressing concern about Mulga Rock. She said if a project cleared certain hurdles, it would be harder to wind it back. “An environmental approval is just one layer of approval that a uranium project requires,” she said.
“[It] is a long way from final approval, so it doesn’t lock in Labor to any of these projects, but … there would be seen to be that kind of pressure.
“It’s a political issue, it’s a very contentious issue and certainly the companies are doing everything they can.”
Even after a positive EPA assessment, uranium projects still required state and federal ministerial backing as well as other approvals and licences.
Cameco’s open cut mine at Kintyre, 270 kilometres north-east of Newman, has gone as far as gaining conditional approval from the Federal Government last year. Labor’s stated policy suggests mines that have been granted final state approval for construction will be permitted to operate and export in the same manner as other mining ventures.
Desperate uranium miners switch to survival mode despite nuclear rebound, Reuters, 7 OCT 16 LONDON “……..BULGING INVENTORIES Mining executives partly blame the slump on their customers’ wait-and-see attitude, as utilities believe that the uranium market’s over-capacity will persist for years and see no need to rebuild their dwindling stockpiles.
Demand for uranium is determined by the number of nuclear plants in operation worldwide, but supply and demand are disjointed by huge stocks and uranium’s long production cycle……..
In the five years before Fukushima, utilities worldwide bought about 200 million pounds of uranium per year, he said. Although Japan’s consumption averaged only around 25 million pounds per year, when it closed its reactors demand was cut far further, falling by half. European and U.S. utilities saw that the market was over-supplied and reduced inventories, buying less.
Mining firm Energy Fuels estimates global uranium stocks held by utilities, miners and governments are now at around 1 billion pounds. That is down from a peak around 2.5 billion pounds in 1990, but still many years’ worth of consumption.
Despite the plunge in uranium prices after the 2008 financial crisis and again after Fukushima, uranium production has doubled from 80-90 million pounds in the mid-1990s to about 160 million pounds last year, according to Energy Fuels data……
With so much new supply, and demand sliding, prices have fallen to a level where most uranium miners operate at a loss.
“At today’s spot prices, the primary uranium mining industry is not sustainable,” US uranium producer Energy Fuels COO Mark Chalmers told the World Nuclear Association’s London conference last month.
He added that many legacy long-term supply contracts will expire in 2017-18, which will force many mines to close or throttle back even further than they already have.
Miners like Canada’s Cameco, France’s Areva and the uranium arms of global mining companies have closed or mothballed several mines and deferred new projects in order to cut back supply.
Paladin – the world’s second-largest independent pure-play uranium miner after Cameco and the seventh or eighth-largest globally – has production capacity of 8 million pounds of yellowcake uranium but produced just 4.9 million pounds last year at its Langer Heinrich mine in Namibia.
Molyneux said the firm will produce about 4 million pounds this year and will cut output further to about 3.5 million pounds next year if prices do not recover.
Paladin suspended production at its 2.3 million pounds per year capacity Kayelekera mine in northern Malawi in 2014 but maintains equipment so it can resume when prices recover.
Meanwhile it is trying to further reduce its debt, which already fell from $1.2 billion five years ago to $362 million.
Paladin has agreed to sell 24 pct of Langer Heinrich to the China National Nuclear Company and plans to use the expected proceeds of 175 million dollars to further reduce debt.
Bigger peer Cameco in April suspended production at its Rabbit Lake, Canada mine while also curtailing output across its U.S. operations, saying market conditions could not support the operating and capital costs needed to sustain production.
Cameco marketing head Tim Gabruch told the WNA conference that “desperate times call for desperate measures”.
Supply adjustments and producer discipline had not yet been sufficient to counter the loss of demand, he said.”As difficult as those decisions have been, we recognize that those actions may not be enough.”(Reporting by Geert De Clercq; editing by Peter Graff) http://www.reuters.com/article/us-uranium-nuclearpower-idUSKCN1230EF
http://www.robinchapple.com/crisis-confidence-over-epa-uranium-mine-push 27 September
WA Greens Senator Scott Ludlam and Robin Chapple MLC have today questioned the EPA’s approval for preparatory works at the proposed Mulga Rock uranium mine, which is yet to be approved and currently subject to an appeal.
“Today’s approval for preparatory works at Mulga Rocks exposes the sham of the assessment and appeals process; the EPAs decision today is at odds with the intention of the Environmental Protection Act 1986,” Mr Chapple said.
“There has been serious public backlash against the project reflected in numerous appeals being lodged against the project, including from Traditional Owners and people in the local community.
“There is a race on in WA to get uranium mines approved before the State election. This ambition is ridiculous given the widespread opposition to the industry and the market conditions which are prohibitive to new mines.”
“World-wide we’re seeing uranium mines close and others put in to care and maintenance. Vimy Resources may have some political influence and big benefactors like Andrew Forrest, but none of these things will make this mine profitable or socially acceptable,” Senator Ludlam said.
“The EPA’s response to Vimy’s aggressive approach to starting this mine is not just a demonstration of a poor and non-transparent process, it is a slap in the face for the public and local community that have engaged in good faith in a process which is in essence a fait accompli.
“While the process is broken, the resolve of communities to fight this project is very much alive and well.”
Paladin Energy’scontaminating uranium operations, controversy over Anvil and state repression in Congo, MRC’s exit from its Xolobeni titanium project on South Africa’s Wild Coast following the murder of anti-mining advocateBazooka Rhadebe earlier this year.
The list goes ever on and the details – some of which are documented in a powerful report by the International Consortium of Independent Journalists – are deeply disturbing.
The absence of a robust regulatory regime in many African countries can see situations where Australian companies are engaged in activities that would not be acceptable practise at home
Africa Down Under: Tales Of Australian Woe On The ‘Dark Continent’, New Matilda, By Dave Sweeney on September 7, 2016 A mining conference underway in Perth states its aim is to help boost the fortunes of one of the poorest regions on earth. But boost the fortunes for whom, asks Dave Sweeney from ACF.
Stories of corruption, dirty dealing and corner cutting are not uncommon in the world of mining and resource extraction, especially in the developing or majority world. It is a tough trade where the high-visibility clothing is often in stark contrast to the lack of transparency surrounding payments and practises.
But as a major industry gathering takes place this week in Perth it is time for a genuine look at whether Australian resource companies are supporting the growth of fledgling democracies or literally undermining them.
No doubt the tall tales will flow along with the cocktails at the Africa Down Under mining conference, an annual event that sees Australian politicians join their African counterparts alongside a melange of miners, merchants and media. Continue reading
Energy Resources of Australia slashes asset values, The Age, Brian Robins 30 Aug 16 Uranium miner Energy Resources of Australia has been forced to slash the value of its assets by $161 million, almost equal to the company’s remaining sharemarket value.
With its controversial Ranger mine, which is surrounded by the Kakadu National Park, scheduled to close within five years, the Australian Securities and Investments Commission (ASIC) had questioned the way ERA valued its assets in its December 31, 2015 financial report.
The miner had now conceded that the value at which it carried the Ranger mine assets in its books “exceeded fair value”, ASIC said in a statement on Tuesday.
ERA pointed to weakness in the uranium oxide price at a time when the mine had only a five-year life left, without an extension of its authority to mine, as reasons for booking the impairment.
The write-down compares with ERA’s sharemarket worth of just $173 million, which signals deep-seated investor pessimism over its prospects in light of the traditional land owners’ opposition to extending the operation of the mine.
In the June half, ERA lost $35.2 million, which blew out to $196.5 million following the write-down. Revenue slipped to $170.5 million from $185.8 million due to the weak uranium price……..
ASIC had queried the company’s use of a single discount rate when valuing its assets. ERA has agreed to use different valuation techniques for the mining and rehabilitation of the site, for example.
ERA’s biggest single asset is its accumulated losses, which now total $822.8 million and tower over the value of its dwindling equity of $273.4 million.
Indigenous people living in the area have a bad history with uranium developments. It’s a few hundred kilometres from Cundalee, the mission where Spinifex people from the Great Victoria Desert were placed after being pushed off their traditional lands by the British government’s nuclear testing program in Maralinga, South Australia, in the 1950s and 60s
Pilanguru people to fight on as uranium mine gets environmental approval
Traditional owners say the Indigenous community has not been adequately consulted about Vimy Resources’ planned Mulga Rock open-pit mine, Guardian, Calla Wahlquist, 15 Aug 16, Traditional owners have vowed to fight a proposed uranium mine at Mulga Rock, about 240km west of Kalgoorlie, Western Australia, which was given conditional environmental approval on Monday.
The Environmental Protection Authority of WA recommended the Barnett government approve construction of the open-pit mine and uranium processing plant, operated by Perth-based Vimy Resources Limited, after a three-month public environmental review. Continue reading
The winning argument against the mine A joint submission was provided to the Yeelirrie Public Environment Review by the Conservation Council of WA, the Australian Conservation Foundation, Friends of the Earth Australia, The Wilderness Society, the Anti-Nuclear Alliance of WA, the West Australia Nuclear Free
Alliance and the Australian Nuclear Free Alliance.
Amongst other points, they called for the project to be rejected “on the grounds that the Yeelirrie Subterranean Community, a Priority 1 Ecological Community (PEC) comprises a series of highly endemic, diverse stygofauna and troglofauna species within multiple calcrete habitats). The impacts of the proposed Yeelirrie uranium mine, predominantly the associated groundwater drawdown, pose an unacceptable risk that could see a number of subterranean species become extinct (particularly 15 species that are currently only known from the direct impact zone).”
The EPA decision was based on the impacts on subterranean fauna, and disregarded other points made in the submission.
The Wongutha Traditional Owners have been fighting this project for over 40 years.
WA EPA rejects proposed Yeelirrie uranium mine, Online Opinion, By Mara Bonacci – posted Tuesday, 16 August 2016 After nearly 3,000 people lodged submissions with the Western Australian EPA in opposition to the proposed uranium mine at Yeelirrie, on August 3 the EPA recommended that the project be rejected. Traditional Owners and environmentalists welcomed the decision, but remain wary……. Continue reading