The Barnett Government has campaigned hard on its support for a strong uranium industry in WA. Its recent election victory has been praised by the uranium industry lobby, with the Managing Director of Toro Energy claiming that the election result sent a message to the uranium industry that WA is ready and open for business.
But as Mia Pepper points out the risks associated with uranium meeting, particularly the international conditions and the widespread opposition to uranium mining in WA, don't bode well for the industry's prospects in WA
Despite the past four years of a pro-uranium government in WA, 42 interested companies, 253 tenements with exploration drilling, and millions of dollars in subsidies, there has not been a single uranium mine approved.
BHP Billiton has sold Yeelirrie WA’s biggest uranium deposit; and dissolved its uranium division.
And the world’s largest uranium miner, Cameco, has put Kintyre, WA’s second biggest uranium deposit, on hold stating that development of the deposit is not economically viable. In early 2013 the company wrote down the value of the Kintyre project by US$168 million, and stated that the uranium price would need to jump from its current low to US$67 lb for the project to break even.
Paladin, a Perth based uranium miner has said the uranium price would need to be even higher at US$85 lb to justify any further investment in the industry, and in February 2013 it wrote down its uranium assets by US$123 million.
Despite this back-pedalling by experienced companies, there is no shortage of uranium hopefuls, like Toro Energy, who remain enthusiastic about the price of uranium recovering, despite the lack of evidence to support their optimism.
Toro Energy, a small company with no mines and no proven experience, is leading the charge with WA’s most advanced uranium proposal – Wiluna – a much smaller deposit than Kintyre or Yeelirrie. As its name suggests, Toro is bullish about pursuing this small deposit despite the shaky economics, the lack of investor interest and fierce public opposition.
There are few grounds to suggest that uranium prices will ever bounce back to the high prices seen in 2007. Long term projections do suggest a more modest recovery, but not to the levels that would make most uranium projects in WA economically viable. The demand for uranium is simply not there.
Uranium is different to other minerals. It pushes moral boundaries, it permanently pollutes country and it contributes to the global nuclear waste problem and proliferation risk. Uranium is unwanted, unnecessary, and uneconomic – altogether a bad way for mining investors to lose money.