new mines in sa?

Uranium mines: the rush is on
Chris Pippos
15jan06
URANIUM exploration is booming in South Australia as the State Government pushes for more mines, saying that not to allow them would be akin to "the Saudi Arabians keeping their oil in the ground".

New figures show 25 Australian and international companies have 86 uranium exploration licences in SA – an increase of about 100 per cent in three years.

And a further 30 licence applications are being considered.

However, uranium opponents say the Government has wasted more than $1 million of taxpayer dollars to fund the boom and help companies drill for uranium.

The uranium industry is now rushing to peg out sites in the state's north and cash in on the threat posed by high oil prices.

SA Mineral Resources Minister Paul Holloway said SA would expand its number of uranium mines some time about 2010 if Labor's three-mine uranium policy was overturned at the party's 2007 national conference.

"We can't avoid it – it would be like the Saudi Arabians keeping their oil in the ground," Mr Holloway said.

"I think it's inevitable the policy on uranium will be changed.

"I think that, certainly at this stage, the indications are that the world could take all the uranium that we could develop in the near future.

"If we could discover a half-a-dozen Olympic Dams, it would be good ... as the (uranium) price increases the value to this state in terms of royalties is also increasing rapidly."

Only last week, Canadian-listed company Mega Uranium Ltd made a $19.7 million friendly bid for Australian uranium explorer Hindmarsh Resources.

And Chinese officials have reportedly been negotiating with the owner of the Honeymoon Mine, Southern Cross Resources, to buy a share of the project, west of Broken Hill.

The combined output of SA's existing uranium mines at Olympic Dam and Beverley now totals $900 million a year in export income. Commercial mining at Honeymoon has not yet begun.

Australian Conservation Foundation spokesman David Noonan said the Government had spent more than $1 million in subsidies to help uranium companies.

"We'd certainly question why Minister Holloway is putting public funds into mineral exploration," he said.

He said most of the companies were involved in "high-level speculation and going over old ground".

Mr Noonan said even if another uranium mine was permitted in SA, many of the existing companies could not afford a new mill, estimated to cost about $50 million.

"Virtually none of them would have the money to commercialise the deposit," he said.

Federal Resources Minister Ian MacFarlane said uranium companies would simply shift their attention to the Northern Territory if more mines were not permitted in SA.

"Of great concern to SA is the loss of potential investment worth hundreds of million of dollars," he said.

Mr MacFarlane said there was an expectation among the uranium exploration fraternity that more mines would be permitted soon in SA.

Chamber of Mines and Energy chief executive Phil Sutherland said he expected even more new entrants into the state's uranium industry soon.

"Of course, with uranium as a commodity fetching quite high prices globally, it does follow," he said.

"We really need to capitalise on the fact we have so much uranium in our back yard."

SA has 41 per cent of the world's low-cost economic reserves of uranium, with most exported to a range of countries including Canada and the US for power generation.