First new uranium in Australia in 5 years faces delay

SYDNEY Tue Dec 18, 2012 2:43am EST

SYDNEY Dec 18 (Reuters) - Australia suffered a further setback on Tuesday in efforts to become a greater supplier of uranium to the world's nuclear power sector after the government postponed a decision on development of the country's first new mine in half a decade.

Toro Energy, which has been seeking approval to exploit its Wiluna uranium deposit in Western Australia state, said it was informed only hours before it was anticipating a final go-ahead from Environment Minister Tony Burke that it could take another three months before a decision was made.

Australia has no nuclear power plants of its own, but holds 40 percent of the world's known reserves of uranium. It is the world's third largest exporter of yellowcake for peaceful purposes behind Kazakhstan and Canada.

The federal government last gave its approval for a new mine in 2008. That mine, majority-owned by Canada's Uranium One , is only now being commissioned

Western Australia lifted a ban on uranium mining in 2008 but to date, no mines are in operation, with all the mining occurring in neighbouring South Australia state and Northern Territory.

This year, BHP Billiton postponed indefinitely its plans to unearth an additional 15,000 tonnes of uranium oxide annually from its Olympic Dam site, citing high costs and an uncertain outlook for commodities.

"Today, on the final day for a decision, Toro has been advised that the minister does in fact want more information on some specific aspects of the project and that the time for his decision has been extended to March 13, 2013," Toro Managing Director Greg Hall told Reuters by telephone from his headquarters in Adelaide

"We're surprised and extremely disappointed with this further delay," he said.

A spokeswomen in the minister's office confirmed it could be the end of March before a ruling is made but declined to provide more details on why more time was required.

PRICE COLLAPSE

Australia has been seeking new customers for its uranium, most of which is sold to nuclear power plant companies in Europe. It has approved sales to China, but is not believed to have shipped any material there.

The Australian state of Queensland in October lifted a 23-year ban on mining uranium, following a push by Prime Minister Julia Gillard to reach an accord to export supplies to India.

Australia, which mined 7,529 tonnes of uranium in fiscal 2011/12, according to government figures, has until now refused to sell nuclear material to India because it is not a signatory of the Nuclear Non-Proliferation Treaty.

Uranium prices collapsed after Japan's Fukushima nuclear disaster in March 2011 led to the shut down of Japan's nuclear power plants. Uranium sells for less than $45 a pound , compared with the February 2011 average spot price of $69.63.

Suppliers are counting on Japan switching at least some of its 50 nuclear reactors back on following last weekend's election victory for the Liberal Democratic Party (LDP).

The LDP campaigned on a need to return to nuclear power to combat rising domestic energy costs tied to oil and coal.

Under the LDP, market expectations are for 10 to 15 reactors to restart by late 2013. They would be the newest reactors in the most secure locations.

The offline reactors had accounted for roughly 11 percent of world demand for uranium, equivalent to 164 million pounds.

Hall said Toro has been in talks with potential investors to help fund about two-thirds of the estimated A$269 million cost of the Wiluna mine, though any investment decision would not be made until the government's decision is clear.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.