Uranium mining - little profit, less safety

Mining heavyweight BHP Billiton recently concluded the biggest corporate takeover in Australian history, gaining formal control of WMC Resources with a bid of $9.2 billion. According to the business pages, BHP Billiton couldn’t have acquired Olympic Dam mine, at South Australia's Roxby Downs, the world's largest uranium deposit, at a better time. Uranium prices are at a 30-year high, Coalition and some Labor politicians are pushing for a “sophisticated” debate about nuclear power, and Australia is currently negotiating a lucrative uranium exporting deal with China.

I asked Dave Sweeney, anti-nuclear campaigner with the Australian Conservation Foundation, what lies ahead for the Australian uranium mining industry.

Sweeney explained: “Australia is looking to markets in Thailand, Vietnam, Indonesia, and now, China. Most controversially, there’s talk of exporting uranium to India. There is active exploration in the top end of the Northern Territory, and increasingly in the centre, around Alice Springs, and west of Alice.

“The Minerals Council of Australia is pushing for uranium mining companies to be exempt from various restrictions that currently apply. In particular, both industry groups and the federal government are targeting SA, WA and Queensland, which currently have state-based anti-uranium mining policies.”

Sweeney argues there is also resistance to the pro-nuclear push. He cites Labor premiers Geoff Gallop and Peter Beattie, both of whom have recently confirmed their anti-uranium mining stance, while the NT Labor Government, returned by a landslide, has promised no new uranium mines for the territory.

He continues, “The key state in the whole business is of course South Australia, home to Olympic Dam, the biggest mixed ore body in the world - copper, uranium, silver and gold. Basically, it’s a massive copper and uranium mine.

“With the injection of takeover capital, there are plans for an ambitious $5 billion expansion. Olympic Dam is currently Australia’s largest underground mine, but the plan is to expand to an above-ground open cut mine - a five kilometre square pit. Uranium extraction would treble, to around 15, 000 tonnes per year.

“SA Labor Premier Mike Rann has flagged that he wants to liberalise his uranium policy, calling for the ALP’s ‘three mines’ position to be relaxed. Any such moves would face internal opposition. The ACTU has warned against such an approach and anti-uranium feeling [within the ALP] remains strong at a branch and state level and in key parts of the federal party.”

According to Sweeney the “booming” global uranium market is not as strong as we are led to believe.

“Throughout the 1990s, Russia had a stream of highly enriched uranium, from dismantled weapons, going into the world market. It’s recently decided to restrict that significant source of supply. And that’s dried up at the same time as there’s increased speculation about the potential of nuclear power [as a non-Greenhouse gas emitting energy source].

“It’s a combination that’s seen uranium open market prices rise from around US$9 a pound at the end of the 1990s, to around three times that today.

“That looks good in figures, but in the case of many Australian deposits, it’s still below production costs. Uranium prices have gone up from historic lows - 30 years ago prices were at US$40 per pound, now at US$29, and the real dollar difference would be even greater.”