Uranium change blows in the west Jamie Freed September 8, 2008
THE mining industry was yesterday cautiously optimistic that the likely change in government in Western Australia would lead to the development of the state's first uranium mines, proving a boon for long-suffering investors.
At the very least the Labor Party's poor performance at the polls on Saturday suggested little likelihood of the full-scale ban on uranium mining recently proposed by the state's Premier, Alan Carpenter.
"I think it means that any ban on uranium mining is untenable given the central position the Labor Government gave to a uranium ban," the executive director of the Australian Uranium Association, Michael Angwin, said.
The state's Liberal and National parties both support uranium mining in principle, subject to strict environmental and regulatory conditions.
Successive Labor premiers since 2002 have made it clear they would not approve the development of uranium mines, although uranium mining is not banned.
But investor attention turned to the prospect of mining WA's uranium deposits with the steep rise in uranium prices that culminated with a record spot price of $US138 a pound last July.
The largest unmined deposit in Australia is Jabiluka in the Northern Territory, which is held by the Rio Tinto subsidiary Energy Resources of Australia. The next three largest deposits - including BHP Billiton's Yeelirrie project, Energy and Minerals Australia's (EMA) Mulga Rock project and Cameco and Mitsubishi's Kintyre project - are in WA.
Several other companies, including Paladin Energy, Toro Energy, Mega Uranium and Energy Metals, own advanced exploration projects in WA, issued by the WA Government. (NSW has a legislative ban on uranium exploration and mining.)
John Wilson, an analyst at Resource Capital Research, said Labor's poor showing was likely to lead to a re-rating of uranium explorers with projects in WA.
"It wasn't at all evident that victory was imminent for the Liberals [on Friday]," he said, adding that companies with the most advanced projects, such as Toro and EMA, stand to benefit the most.
Chris Davis, the managing director of EMA, said it would take three to four years for his company to develop its Mulga Rock deposit because it needed to complete more drilling and studies before applying for approvals.
He said EMA was unlikely to call a trading halt today because the market was well aware of the ongoing political developments.
Peter McNally, vice-president of project development for Mega Uranium, said his company could make progress on its Lake Maitland project "very rapidly" if it could apply for mining licences.
"If everything went well for us, we would possibly have this project operating in three years," he said, adding that a legislative ban on uranium mining in WA may have led his company to reduce spending or divest the project.
Aboriginal groups, including the Martu people, had been among those pressuring Mr Carpenter to allow uranium mining in the state. The Martu are believed to hold the rights to earn a 20 per cent stake in the Kintyre deposit which Rio Tinto recently sold to Cameco and Mitsubishi for $US495 million.
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