Toro Energy (ASX: TOE) of Australia has finally received clearance from federal environmental agencies to move forward with its $269 million Wiluna uranium project situated in Western Australia.
Toro needs to finalize financing for the project, which the company expects to complete by chalking out a supply agreement with international partners who are also involved in the nuclear fuel business. Once that is complete, Toro would be on track to become Australia’s sixth current uranium producer.
Toro had been waiting for the clearance to arrive from Tony Burke, Australia’s Environment Minister, for quite some time. In fact, all of this was after the Western Australia Premier, Colin Barnett, issued clearance for the Wiluna project in October of 2012.
Altogether, the state and federal approvals process has taken as long as three and a half years, reports The Australian.
The Australian quotes Vanessa Guthrie, Toro’s managing director:
“[The company now has the] regulatory certainty needed to fully underpin our negotiating capacity and to now advance commercial financing arrangements and product off-take agreements with potential partners. It also provides a clear pathway to complete detailed engineering design, infrastructure and cost estimates for Wiluna. This work has been on hold since the federal minister initially deferred his decision on the project in November last year and then initiated a second deferral in December.”
It’s possible that the Wiluna project could move to production phase by 2016, but of course, that is subject to the successful completion of financing and other arrangements. News of the clearance caused Toro shares to go up 13 percent, to 15 cents, the Australian reports.
Uranium has had a spotty history of late. After Fukushima, Japan shut down nearly all domestic nuclear reactors, and other countries typically reliant on nuclear energy began to move away from it as well (Germany, for example). That’s caused uranium prices to take a nosedive. Recent spot price was at $42.25 per pound. Toro’s approximate cash operating costs are around $37 per pound.
The Wiluna project would be Western Australia’s first uranium mine, reports ABC News. However, Burke’s approval carries 36 conditions with it, each of which Toro needs to comply with in order to ensure smooth progress.
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Most of these stipulations attend to the usual necessities like protecting local water reserves from radiation, protecting localized wildlife, proper mine shutdown protocols, and the like. The Federal Resources Minister, Gary Gray, is quite happy with how things have turned out.
ABC News quotes him:
“What we’re looking at is a project that will bring substantial local social benefits and also local social investments training and jobs; indigenous jobs and jobs at Wiluna. So, jobs that will be critical for supporting the local infrastructure and the local community. We’d expect this to have a mine life of in excess of a decade, and we would expect this to process in excess of a million tons of ore annually, and around three-quarters of a million tons of oxide. Now to do that will have a range of local economic implications and it’ll also be a major job creator and creator of training opportunities for good mining jobs into the future for local Indigenous people.”
However, opposition remains, and it centers mostly upon the fact that Toro Energy is a relatively small companyand a newcomer to the uranium sector. That’s why the Conservation Council is open about its reservations regarding this operation.
ABC News quotes Mia Pepper of the Council:
“The difference between Toro Energy and a lot of other companies is that they’re a small company with no proven experience and they don’t necessarily have the capacity to manage a project of this size, and with this particular mineral,” she said.
“Some of the concerns raised through the Federal Minister’s decision is clearly about that capacity and dealing with the unforeseen closure of the mine and how they will then manage radioactive waste at the site.
Regardless of such concerns, however, it seems the way is now open for Toro to push forward (provided it can accomplish the necessary financing arrangements). That would mean Australia’s growing uranium sector would get a significant boost.
The ongoing depressed uranium market makes it difficult to establish long-term projections, but developing nations like China and India are particularly interested in building up a nuclear presence in the future.
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