australia's identified mineral resources 2005 - Geoscience Australia

AUSTRALIA’S IDENTIFIED MINERAL RESOURCES 2005
22% of world uranium production in 2004, is the world’s second largest producer after Canada (29%).
While there are a number of undeveloped deposits in Western Australia, Northern Territory, South
Australia and Queensland, only the Northern Territory and South Australia permit uranium mining.
Exports
Exports in 2004 reached a record 9 648 t U 3 O 8 (8182 t U) valued at A$411 million. Exports of
Australian uranium are controlled by Australian Government bilateral safeguards agreements, which
are designed to ensure that Australia’s uranium is used only for electricity generation and is not
diverted to any military purposes. Importing countries must be signatories to the International Atomic
Energy Agency’s safeguards arrangements and have entered into an agreement with the Australian
Government to adhere to safeguard obligations for exporting uranium. In addition, the Government
recently announced the requirement for countries purchasing Australian uranium to have ratified the
Additional Protocol under the Nuclear Non-Proliferation Treaty. This is to strengthen current
safeguards arrangements covering exports of uranium.
Australian mining companies supply uranium under long-term contracts to electricity utilities in
United States, Japan, European Union (United Kingdom, France, Germany, Spain, Sweden, Belgium,
Finland), South Korea and Canada.
Industry Developments
Uranium market developments: Resurgence in spot market prices for uranium continued in 2004.
This stemmed from reductions in secondary supplies of uranium available to world markets together
with draw-down of stockpiles. Since 1990, world uranium requirements for electricity generation
have exceeded mine production, and in recent years mine production accounted for less than 60%
of world requirements. The balance has been met from secondary sources including: stockpiles of
natural and low-enriched uranium held by electricity utilities and conversion plants; and downblending
of highly enriched uranium (HEU) from ex-military stockpiles in both the Russian
Federation and the USA. Over the last few years, the Russian Federation has retained this material
to meet the growing demand for uranium for increasing domestic electricity generation. This has
decreased the availability of secondary supplies to world markets
Ranger: Operated by Energy Resources of Australia Ltd (ERA), the mine achieved record production
for 2004. Mining of the No. 3 Orebody is expected to continue until at least 2008, after which the
pit will be used for the storage of tailings. Production from stockpiled ore will continue until 2012.
Metallurgical test work was undertaken to investigate the feasibility of processing lateritic ore, which
has been stockpiled from earlier mining operations.
Olympic Dam: Production at Olympic Dam for 2004 was 38% higher than for the previous year.
Reconstruction of both the copper and uranium solvent extraction plants (destroyed by a fire in late
2001) was completed and the new uranium solvent extraction plant operated at planned production
rates during the year.
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WMC Resources has been investigating the feasibility of a major expansion of operations, which
would increase annual production to 500 000 t copper, 15 000 t U 3 O 8 and 500 000 ounces gold.
The study includes:
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A major drilling program (90 drill holes) to better define the resources in the southern part of the deposit;
Assessing alternative mining, treatment and recovery methods for the southern part of the deposit;
Identifying and evaluating water and energy supply options; and
Logistics planning that may include linking Olympic Dam to the national rail network.
Evaluation of mining methods and scale of operations was finalised in March 2005. Open cut mining
is the preferred method, where it is proposed to mine 35 Mt/year from the open pit and 5 Mt/year
from the existing underground operations. During the period, WMC Resources was the target of
takeover bids, firstly by Xstrata and then by BHP Billiton. BHP Billiton, with a bid of $9.2 billion
(US$6.9 billion), secured control in June 2005 and will continue evaluation of the major expansion
at Olympic Dam.