BHP To Dig New Australia Uranium Mine After Ban
Date: 19-Nov-08
Country: AUSTRALIA
The 10-kilometre-long (6 miles) Yeelirrie deposit, located about 1,000 km north of Perth in west Australia, is estimated to contain about 52,000 tonnes of uranium.
That's 7 percent more than total world production last year, according to figures from the World Nuclear Association.
Prices have fluctuated widely in recent years, with uranium currently selling for about $48 a pound.
BHP said it had notified the Western Australia government it was initiating a drilling exploration program to confirm the amount of uranium at the long-dormant Yeelirrie deposit, discovered in 1972.
Western Australia on Monday officially ended its ban on uranium mining, paving the way for miners to step up exploration inside its borders.
The state's newly-elected Leader Colin Barnett ran a successful campaign on support for uranium mining, predicting new mines could be dug within five years to meet international demand, in turn generating millions of dollars in royalties for the state.
Barnett has promised to funnel royalties into social services and carbon emissions reduction programs.
A BHP spokesman declined to provide a timetable for developing the project.
The company is assembling a project team in Perth to evaluate mining and processing options and to prepare an environmental impact statement, he said.
BHP already operates one of the world's largest uranium mines, its Olympic Dam lode in neighbouring South Australia state, where it is seeking approvals to expand production to 4,500 tonnes per year.
Besides BHP, an army of small prospectors have been pegging thousands of kilometres of ground in the state, which is five times the size of Texas, in anticipation of an end to the ban.
Australia, with 40 percent of the world's known uranium reserves, is already the world's second-largest uranium supplier behind Canada.
Like Olympic Dam, BHP took ownership of the Yeelirrie deposit when it bought diversified miner WMC Resources.
In August, rival Rio Tinto Ltd/Plc sold its Kintyre uranium project in Western Australia to Canada's Cameco Corp and Japan's Mitsubishi Corp for $495 million.
Rio is also the 68.4 percent owner of Energy Resources Australia Ltd, Australia's largest uranium producer and operator of the Ranger mine in the country's Northern Territory.
(US$1=A$1.54)
(Reporting by James Regan; Editing by James Thornhill)