re: junior uranium stocks-kalmsy article
Credit to Kalmy for this article. It's good and compehensive. Omits, but alludes I think in the text and last sentence, matters still to be resolved such as who will regulate and under what conditions?; environmental asssessments, ie who will do them?; ALRA issues; etc.. It omits the NTG Chief Minister as an opponent of new mines. Othrwise, very fair article.
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MINING boom . . . the uranium-friendly Howard Government has sparked a share-market run on uranium stocks.
Uranium stocks on fire The sharemarket seems more excited by the Howard Government's takeover of the Northern Territory's uranium mining approval processes than the miners, as Chris Jones and Liam Walsh report 06aug05 YELLOWCAKE stocks lit up in green across the Australian Stock Exchange on Thursday afternoon.
News had broken that the uranium-friendly Howard Government had taken over the awarding of mining licences in the Top End from the uranium-opposed Territory Government.
It sparked a sharemarket run on uranium stocks that had not eased by last night as excited investors punted on yellowcake being Australia's next mining boom.
But that same sentiment is not shared by the uranium exploration industry itself, where the news has not exactly been met with popping champagne corks. For most, it's been business as usual.
Uranium explorer Lindsay Dudfield is a typical example.
He cautions that, in the short term at least, Canberra's extraordinary vow to approve any new mines that have the approval of indigenous landowners and meet environmental standards "won't make any difference at all".
Don't get him wrong. It's certainly a positive move.
Dudfield says the biggest impact of Thursday's decision will simply be to make it easier to obtain investment dollars.
New mines themselves remain some time away, says Dudfield, managing director of Jindalee Resources (whose subsidiary holds a portfolio of uranium assets in a part of the Northern Territory he describes as hills interspersed with sandy flats).
Mitchell Hooke says it's a similar story across the sector.
As chief executive of the Mineral Council of Australia, it would be an understatement to say Mr Hooke was pleased with Thursday's news.
But he says it's a simple fact of life that the starting date of any new uranium mining operation remains several years away.
The biggest ramification of the Federal Government's decision, Mr Hooke says, is that companies with uranium interests in the Northern Territory can now start to move ahead with more confidence – and woo international investment.
"Essentially it will give a clear message that Australia is in the business of mining," Mr Hooke says. "There's no question that there'll be a lot of interest in moving forward."
But Neil Biddle is more upbeat.
As director of Batavia Mining (which is exploring about 5000sq km of land for uranium, mainly in central Australia), he's now eagerly anticipating a "prolonged uranium boom" for the Northern Territory.
"This certainly will add value to exploration acreage in the Northern Territory, I have no doubt about it," he says.
And that view is shared by Compass company director Malcolm Humphreys, who is exploring for uranium near Batchelor and expects now to be mining for uranium in about five years. He says there's now just so much greater certainty for investors.
"There has been an element of confusion over policy which has been a negative," he says.
But Alistair Stephens from Arafura Resources says a big question mark remains: what would happen if there was a change in federal government?
The Labor Party's official position remains that it is opposed to any new uranium mining in Australia, a policy it has stuck to since the early 1980s.
Only three mines in Australia are currently producing uranium – Ranger in the Northern Territory and Olympic Dam and Beverley in South Australia.
"The whole issue is clouded by policy and without a clear change of the Labor Government's policy at this stage, you'd have to consider the implications long-term if Labor wishes to maintain that policy," Mr Stephens says.
But already cracks have started to appear in Labor's commitment to its long-held "three-mines" policy.
This was evidenced by Federal Labor's muted response to Thursday's move, with the biggest punches on the day thrown by NT-based MP Warren Snowdon.
But his disgust was contained to arguments about the move's impact on self-government in the Northern Territory.
Similarly, yesterday Labor's contribution to the debate was a strongly worded statement from territories spokesman Kim Carr entitled: "Howard's power grab an insult to Territorians."
Kim Beazley and his front bench has been noticeably silent on the issue of uranium mining itself.
The reason?
Probably that any public debate risks exposing the divergent views held within the party on the 21-year-old three-mines policy, which is due to be up for discussion at Labor's national conference in 2007.
Those already on record as favouring an overhaul of three-mines include the party's federal president Warren Mundine and its resources spokesman Martin Ferguson.
Opposition Leader Kim Beazley is trying to hedge his bets, signalling his support for Labor's existing policy but backing the Government's moves to export more uranium to China.
Among the premiers, South Australian Premier Mike Rann and former NSW premier Bob Carr are in favour of dumping the three-mines policy but West Australian Premier Geoff Gallop has repeatedly refused to consider uranium mining in his state.
Queensland Premier Peter Beattie yesterday said he remained committed to not allowing uranium mining in this state.
But the private support for more uranium mining among some of the most senior members of Mr Beattie's Government is no secret.
James Pratt, from uranium explorer Deep Yellow, says he's noticed a gulf developing in recent times between federal and state Labor parties over their policies on uranium mining.
He says the South Australian Labor Government, in particular, is in favour of new mines.
"Let me say I was in South Australia two months ago at an energy conference and the South Australian Mines Minister told everybody there that they were beholden to federal Labor policy, but they didn't agree with it," Mr Pratt says.
For his part, Resources Minister Ian Macfarlane is known to have been madly lobbying Mr Gallop over the issue.
Mr Macfarlane argues that Labor's ideological opposition to more uranium mining is illogical and outdated.
And setting aside environmental concerns, he says that exporting uranium to less developed countries will work in their favour by ensuring the delivery of reliable electricity and thereby helping alleviate poverty.
The Northern Territory Minerals Council is one group that is hopeful that a shift in federal Labor policy is only a matter of time.
"Over the last three to six months there has been a bit of a seachange within the Labor Party," the council's Kezia Purick says. "Members of that party – politicians and others – have started to say that perhaps the party needs to look at that policy and to revisit the issue of uranium exploration and mining and also nuclear energy."
The Queensland Nationals have maintained they have no position on mining uranium deposits and, in government, would consider proposals when and if they were made.
At least one uranium explorer with interests in Queensland fancies its prospects if conservatives won government on a state level.
"They (uranium deposits) will be developed if the State Government either changes their policy or if the state government changes," Summit Resources chief executive officer Alan Eggers said yesterday.
Perth-based Summit has tens of millions of kilograms of uranium in three deposits near Mt Isa.
"We only hope (the NT news) filters through to other states, particulary Queensland and WA, where there are large, high-grade uranium resources waiting to be developed," Eggers said.
But as the political debate continues, investors at least seem certain of a positive future for uranium mining in Australia. The price of shares in many companies with some uranium interests listed on the ASX have been going through the roof.
The massive increases in recent years have been sparked by a quadrupling of world uranium prices amid a growing general acceptance internationally of uranium as a cheap alternative to fossil fuels and an environmentally friendly source of power generation.
Another major impact on the world price has been dwindling supply. Uranium mine production has been in deficit for over a decade, with the shortfall so far made up by dwindling supplies of weapons-grade uranium from the US and former Soviet states.
But these stockpiles are running out.
There are fears now that the world's existing uranium miners will not be able to keep up with demand from the world's 441 nuclear power reactors, not counting the extra 30 planned for China between now and 2020.
Australia has 39 per cent of the global economic demonstrated resources of uranium, but only produces a fraction of the world's supply.
And while BHP, through WMC, and Rio Tinto, through Energy Resources Australia, are currently the major players in the sector, there is much market speculation that some of the junior explorers might be sitting on yellowcake.
The Australian outback is known to be dotted with undeveloped uranium deposits such as Valhalla near Mt Isa, Ben Lomond near Townsville and Westmoreland 400km north of Mt Isa – and that's just in Queensland.
Investors seem certain that among the dozen or so companies exploring for uranium in the resource-rich Northern Territory (which hosts some $12 billion worth of known uranium deposits), at least some must hit pay-dirt.
Patersons Securities head of research Rob Brierley says the biggest reason for the growing interest in uranium in recent times has been because of its image as an energy source for the future.
But he warns the sector might be getting a bit ahead of itself.
"I use the tech boom as an analogy to describe the sharemarket enthusiasm for new ideas and to push share prices up with little or no tangible proof," he says.
"That seems to be happening with uranium."
ABN Amro Morgans analyst John Moorhead agrees, noting that uranium shares were up across the board yesterday – "whether they're in the Northern Territory or not".
"It's pure speculation," he says. Moorhead agrees the Federal Government move helps shore up assurances for investors but says there are many other hurdles.
"You've still got to get all the . . . approvals," he said.
Additional reporting by Patrick Lion and agencies
Commonsense win on uranium mines
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