Monday, January 30, 2006

Don't Forget Australia Has The Most Uranium!

Being from Canada, it's far too easy sometimes to focus in on what Canadian and American uranium companies are doing right now. To be honest, it's hard even to keep track and more and more juniors are springing out every day.

However, it would be really negligent not to take a look at how the Australian uranium environment is shaping up. After all, Australia has 41% of the world's uranium deposit. Kazakhstan second, Canada third. Just because they don't mine it now doesn't mean they won't in the future.

To that end, let's take a look at this January 19th article from the Sydney Morning Herald

Uranium winds of change blowing
by Jamie Freed

Australia is home to nearly half the world's uranium, but politics has conspired to stymie an industry in the midst of a global boom.

At first glance, Australia's lack of a nuclear power industry might seem curious to foreigners when they learn that Australia has more uranium than any other country.

It's not because of a lack of interest from mining companies, which tend to view Australia as a dream destination because of its stable political system, skilled workforce and abundant natural resources. Rather, restrictive government policy at the federal and state level has prevented most of the country's uranium from being mined.

At a meeting of the Asia-Pacific Partnership for Clean Development and Climate in Sydney last week, the focus was on measures the six member countries could adopt to reduce greenhouse gases.

Nuclear power was one topic at the forefront, as the United States, Japan, South Korea, India and China all have nuclear power plants – and are planning to build more to help tackle climate change. Australia, never having built a nuclear power plant, is clearly the odd one out.

Analysis: remember, United States and Australia are the biggest countries NOT to sign the Kyoto Accord.

Take Perth's Paladin Resources. Instead of mining or even closely studying one of its deposits in Western Australia, it will start production at its Langer Heinrich project in Namibia this year. Next on its list is a deposit in Malawi, one of the poorest and most corrupt countries.

Analysis: I like Paladin. Enough to recommend it? Stay tuned!

Geoff Gallop, is adamant no uranium mining will be allowed in his state while he is in office – and his present term lasts till 2009.

Analysis: Actually, I found out that Western Australian Premier, Dr Geoff Gallop, has resigned from Western Australia Parliament, to treat depression.

When Redport – a former gold explorer and Internet company – picked up the Lake Maitland uranium project in Western Australia last April, the market reaction seemed almost inexplicable.

The company planned to mine in Western Australia and ship the nuclear power plant fuel to China, despite both actions being illegal under state and federal policy. Yet shares in the tiny explorer more than doubled on the day of the announcement.

Unless investors – including institutions such as Fidelity Investments, which holds 12.7 per cent of Redport – have suddenly become keen to sink money into a project going nowhere, it seems a paradigm shift is afoot.

Analysis: China and Australia started talks January 18th about the latter exporting uranium to the former, albeit with strict safeguards. How to enforce the rule that China cannot use this uranium for nuclear warheads is beyond me, and beyond the Australians. Of course, I also contend that if China wanted warheads, they could get warheads. The States and Russia still point thousands at each other, what would China really bring to the table?

Industry veteran Tony Grey, who founded the now-defunct Pancontinental Mining, says: "Australia is still in irons as far as uranium development is concerned."

He should know. His company discovered the giant Jabiluka deposit in the Northern Territory in 1971 – and it still hasn't been
developed. "(But) having said that," he adds, "the winds of change are blowing."

Analysis: Jabiluka has reserves in excess of 160 000 tonnes of uranium oxide (that’s 320 million lbs), and is one of the world's larger high grade uranium deposits. Remember, not all uranium is created equal. The highest grade are in the Athabasca Basin and in Northern Australia.

Energy Resources of Australia, which runs the Ranger mine in the Northern Territory, has been stopped from developing the nearby Jabiluka deposit because of issues with Aboriginal landholders. It bought the deposit from Pancontinental in 1991.

ERA and the Mirarr people agreed last February to place the Jabiluka site on long-term care and maintenance, and Energy Resources will not develop it without consent from the indigenous group.

Analysis: ERA is actually controlled now by Rio Tinto Ltd.

Redport chairman Richard Homsany certainly believed change was coming when his company invested in Lake Maitland. "At the moment there is enormous pressure to re-examine that (Western Australia) policy on uranium mining," he said in April. "One cannot ignore the fact it is a clean fuel." Neither, in the present climate, can it be ignored that Australia is home to 41 per cent of the world's economic uranium reserves and the world's biggest uranium mine, BHP Billiton's Olympic Dam.

Analysis: Olympic Dam is the world's fourth-largest copper deposit and the largest uranium deposit. The mine capacity is 200,000t/y of copper and 4,300t/y of uranium and they’d like to quadruple uranium production in the future. An article all unto itself.

As always, please do your own due diligence. Scrounge for info and know more about the company you want to place your hard-earned money into!!

comments, suggestions, and your personal ideas are very welcome!


Anonymous Anonymous said...

You might also want to consider SXR Uranium One (SXRFF) because they will have two of their projects online shortly.

Dominion (Africa) will be in production in 2007. Honeymoon (Australia) has already been fully permited. Why the wait then? Read a document on their site that they are waiting for prices to climb higher before launching into production which will benefit the company and shareholders equally.

I'm sure you know what the Honeymoon project brings to the table. :)

2:39 PM  
Blogger Spelunca said...

you know who else is in a waiting mode right now? IUC.. it's interesting actually to tease out exactly why these companies might be waiting, because as i see it, prices should already be at a level where you are guaranteed profits.

7:00 PM  
Anonymous Anonymous said...

The price is rising, the longer you wait the higher the profit...
long term contracts baby
thats where it is at.

7:18 PM  
Anonymous Anonymous said...

The biggest mine in Australia, Olympic Dam now owned by BHP Billiton is undergoing a feasibility study to decide whether to expand it as an open pit. The viability depends on the co-products of copper, gold and silver as the uranium ore grade is a mere 0.04%. The project needs a town extension, a rail link, a desalinated water supply and an electricity power line. If it goes ahead it will start with the digging of a hole 3 km x 3 km x 1 km deep in 2009 reaching 350 m down in 2013 when the first mixed ore will be reached. Australia is a net importer of oil, which will be needed for diesel to dig the hole. This energy will be imported to provide China (contract initialed) with nuclear electricity. So Australia will import oil, burn its coal for electricity to send uranium to China so they do not need to burn coal! This sounds a dinkum project!

1:04 PM  

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