Australian Uranium Mine Setback
Decision Delayed 3 Months
Australia’s quest to become a leading uranium supplier to the world received a setback yesterday as the nation’s government decided to push back a decision on the Wiluna uranium deposit by three months.
Miner Toro Energy (ASX: TOE) was hoping to receive permission to go ahead with exploiting the Western Australian reserve. It’d be a significant move, since Australia contains almost 40 percent of the world’s uranium reserves and is the third-largest exporter of yellowcake, after Kazakhstan and Canada.
A ban on uranium mining was in place in Australia until 2008, and that year was the last time federal approval for a new mine passed. The mine is only just beginning to operate under Uranium One (TSX: UUU).
Just recently, BHP Billiton (NYSE: BBL) shelved plans of harvesting an extra 15,000 tons of uranium oxide per year from the Olympic Dam site. The company cited unfeasible costs as a major reason.
"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.
In the fiscal year 2011-12, Australia mined 7,529 tons of uranium. The nation largely exports the ore to nuclear power utilities in Europe, but it is looking into a relationship with China.
The Fukushima disaster in Japan pushed uranium prices down sharply; presently, it goes for below $45 per pound. In February 2011, uranium commanded an average spot price of $69.93.
But with the recent Liberal Democratic Party victory in Japan, expectations are mounting that more of that country’s nuclear reactors could come back on, a move that would stimulate demand and hopefully raise prices for uranium.