Archive for the ‘economics’ Category

Uranium mining- a dangerous industry with a doubtful future

January 29, 2012

Uranium Sector Hit by Mining Safety Fears  Oil Price, By Dave Forest , 10 January 2011    “…..  the Electrical Trades Union of Queensland and the Northern Territory is banning its members from working in any nuclear-related facilities. Including uranium mines and nuclear power stations.

The Union is worried about the health dangers of uranium and nuclear power. In an anti-uranium video released by the group, the narrator notes, “This is dangerous stuff. It has no place in society.”

Union spokesman Peter Simpson further says, “We are sending a clear message to the industry and the wider community that vested interests in the uranium and nuclear industries are trying to hoodwink us about this dangerous product and industry.”…..  a group of this stature taking such a heavy-handed stance against uranium cannot be ignored.

Ultimately, this could be a setback for the Aussie uranium business. Particularly if other workers follow the electricians’ suit.

In the bigger picture, the Union’s move illustrates the huge challenges the world faces in bringing on new uranium supplies. Right or wrong, the radioactive metal will always be viewed in a more cautious light by workers, local communities and governments.

Anti-uranium protests are inevitable, and will probably slow or stop completely some of the world’s yellowcake projects. One more hurdle for an industry that’s already having a hard time finding new, economic deposits in order to meet global demand. …. exploration and development companies will need to think hard about what projects they pursue. Not only are size, grade and infrastructure a consideration. Companies will also have to think about the surrounding communities, the attitudes of the regional populace, and the stance of host governments when it comes to uranium.

Throw all of these factors in the mix, and it’s going to be extra tough to make new mines.  http://oilprice.com/Alternative-Energy/Nuclear-Power/Uranium-Sector-Hit-By-Mining-Safety-Fears.html

Uranium transport getting more costly, with insurance worries

January 29, 2012

it was unclear whether the incident would raise premiums for miners

By far the biggest user of the railway will be BHP Billiton, which, if it approves its expected expansion of the Olympic Dam copper and uranium mine in South Australia, will run a train a day from the mine to Darwin. ….. 

OZ Minerals’ insurance claim for derailment loss may face complication over pollution BY: MATT CHAMBERS The Australian January 02, 2012  OZ Minerals may recoup through insurance some of the losses from the up to 1200 tonnes of copper concentrate that disappeared into the Northern Territory’s Edith River last week after a train derailed. In an announcement to the stock exchange on Thursday, OZ said the value of the lost concentrates was between $US7 million ($6.85m) and $US8m, or about 4 per cent of its 2010-11 underlying net profit of $189m. (more…)

Uranium mining investment in Namibia not looking too good at all

January 29, 2012

After Fukushima, suddenly the expected darling of local mining investment, has turned into a pariah. Both the Areva and Marenica statements refer to events after Fukushima, highlighting the uncertainty that has entered the industry since the nuclear disaster in Japan……

Perhaps it is a case of both Kalahari Mineral and Extract Resources taking what they can get and opting out of an industry that is fast turning into a lame duck.  [or a dead cat - I haven't got a picture of a lame duck]

Namibia Economist 16 Dec 11 When three major players in one industry, all announce substantial shifts in strategy and/or focus in a very short span, it signals a fundamental change in the underlying assumptions. These past two weeks saw one surprise after another as first Extract Resources, then Marenica, and finally Areva announced a dramatic turn in their strategies which probably points to a change of heart and a significant reappraisal of prospects and strategies. (more…)

Wiluna uranium mine far from certain as Toro Energy drums up funds

January 29, 2012

TORO Energy will consider all project funding options as it moves towards developing Western Australia’s first uranium mine.. Adelaide Now, Christopher Russell  December 01, 2011

Mr Hall told the company’s annual general meeting in Adelaide yesterday Toro estimated it will cost about $280 million to build the mine at Wiluna in south-central WA…..

Toro was looking for options to fund Wiluna, which would produce about 820 tonnes a year of uranium….. ”In the current climate, the most likely method will be a joint venture partner who takes part-ownership in return for both funding and offtake of uranium….

Chairman Erica Smyth said the company was proceeding very cautiously……”We’re looking at all the options to finance this.” Both Dr Smyth and Mr Hall said the industry had been dealt a severe blow by the Fukushima disaster…. http://www.adelaidenow.com.au/business/toro-seeks-partners-for-280m-wa-mine/story-e6frede3-1226210632139

BHP Billiton spending up big to try to pre-empt decision on Olympic Dam big new uranium mine

January 29, 2012

$1.3 billion is  a lot of money to spend on a project that might never come to fruition.  It’s a common tactic, but one that could come unstuck.  But then, I’ve always suspected that Marius Kloppers, Dean Dalla Valle, like many bigwigs might feel that they have plenty of BHP money to splash around –  perhaps an old-fashioned case of more money than sense.

The international news is not encouraging for the uranium industry – though I note that Australia’s mainstream media just ignores facts like  -  the expensive mess of nuclear transport in France and Germany, – the anti nuclear political strength gathering in France,  - the  huge anti nuclear movement and other nuclear hindrances in India, -and the ever downward price of uranium. - Christina Macpherson

South Australia Parliament approves BHP Billiton Olympic Dam expansion, by:Sarah Martin, Adelaide Now, :The Advertiser, November 30, 2011, BHP Billiton will start spending $1.2 billion on equipment for the Olympic Dam expansion in coming weeks after winning final approvals from Parliament for the deal to proceed.

The head of the company’s uranium operations, Dean Dalla Valle, said the approval paved the way for the $30 billion mine to be SouthAustralia’s economic driver for the next 40 years, but gave no guarantees BHP Billiton’s board would approve the project in 2012.

The indenture approval allows $525 million of the company’s pre-approved funding to be spent in South Australia over the next six months as the company begins purchasing long-lead-time items, such as trucks, and starts site works at Roxby Downs.

Despite resistance from the Greens and more than 30 hours of parliamentary debate, amendments to the Roxby Downs Indenture Act passed with bipartisan support yesterday afternoon…. State Greens leader Mark Parnell said the passage of the bill was a ”dark day” for South Australia, accusing the Government of trashing state laws to approve the mine…. The state Greens voted against the legislation, with Mr Parnell saying the Government had voted to turn South Australia into the world’s quarry.

“Future generations are going to be disgusted with us for giving their resources away for a pittance and leaving them to deal with … the world’s largest radioactive waste dump,” he said.
http://www.adelaidenow.com.au/news/south-australia/south-australia-parliament-approves-bhp-billiton-olympic-dam-expansion/story-e6frea83-1226209097762

No improvement in sight for uranium mining investment

January 29, 2012

Uranium miners still waiting on that rebound, TIM KILADZE, Globe and Mail , January 24, 2012 When stocks of uranium miners plummeted after last March’s traumatizing Japanese earthquake, some people expected a rebound once the market’s initial shocks and fears subsided.

They’re still waiting.

Close to a year after the earthquake, shares of Cameco Corp. (CCO-T23.54-0.25-1.05%) are still down 40 per cent and smaller rivals are faring just as badly, with Denison Mines (DML-T1.89-0.12-5.97%) down about 50 per cent. The death knell apparently came when Germany declared a retreat from nuclear energy.

Are these miners doomed for good? Depends on who you ask. Investors are clearly too scared to go near the industry, considering the stocks have moved very little since their initial free fall. (Check out a stock chart for the past year.
Quite scary.) But the companies themselves keep saying that everyone has it wrong.

Cameco chief financial officer Grant Isaac repeated this view when he sat down at CIBC World Market’s Whistler conference last week….. there’s still a major problem. Even if Cameco is bullish over the next decade, its consumers, particularly utilities, like to secure long-term supply contracts, and Cameco can’t talk long-term contracts when they would have to lock-in at today’s prices.

So for now, Cameco is touting plans to increase production. Mr. Isaac said Cameco is sitting on 1 billion pounds of reserves and resources, and the firm wants to bump production from 2 per cent of this a year to 4 per cent.

On this front, investors are cautious. Much of this growth centres on developing the second shaft of Cameco’s Cigar Lake project in northern Saskatchewan, and it’s been plagued with problems…..
http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/uranium-miners-still-waiting-on-that-rebound/article2313513/

Small modular nuclear reactors not likely to be commercially viable

January 29, 2012

from a strictly commercial perspective, there is no reason to use nuclear power at all. The capital costs are enormous and the operations and maintenance costs are very high, to say nothing liability insurance.

daviddelosangeles  comments on  Feds To Finance Small Nuclear Reactor Designs, Ucilia Wang, Forbes, 21 Jan 12,   ”The key question is would that there need to be a certain minimum number of these [small nuclear] reactors in service for a civilian nuclear power system based on these smaller reactors to operate successfully. This is true for mining, processing, research, and waste disposal. It is not clear that that “critical mass” of reactors could be developed in the current environment. (more…)

Cameco uranium mining company’s poor performance record

January 29, 2012

Cameco (CCJ) Downgraded by Zacks Investment Research to “Underperform”, Localised USA, Jan 10th, 2012 Cameco (NYSE: CCJ) was downgraded by equities research analysts at Zacks Investment Research from a “neutral” rating to an “underperform” rating in a research note issued to investors on Tuesday.

Cameco Corporation (Cameco) is a Canada-based company. The Company and its subsidiaries are primarily engaged in the exploration for and the development, mining, refining, conversion and fabrication of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries. Cameco has three reportable segments: uranium, fuel services and electricity.

The company has a 31.6% interest in Bruce Power L.P. (BPLP). Cameco’s uranium joint venture interests are comprised of McArthur River, Rabbit Lake, Cree Extension Millenium, Moon Lake, Dawn Lake, Read Lake and Virgin River. Cameco’s projects include Kintyre Uranium Exploration Project (Kintyre) and GoviEx Uranium (GoviEx). Kintyre project is located in the East Pilbara region of Western Australia. Cameco holds 12% interest in GoviEx. Its wholly owned subsidiary is Global Laser Enrichment LLC (GLE).

Africa’s troubled uranium sector

January 29, 2012

The signals of a troubled uranium sector are manifest. On Tuesday Areva wrote down the performance of its African mines, including Trekkopje and suspended further development.

Fukushima still haunts uranium producers, The Southern Times, South Africa, 30 Dec 11 International prices of uranium, the major feedstock in nuclear reactors, have remained flat; averaging US$53 per pound as the market struggles to shrug off the effects of Japan’s nuclear crisis earlier this year.

Market analysts are warning that shrinking order books, a flat spot price and production cutbacks – largely attributable to the Fukushima disaster – will haunt uranium producers well into 2012.

A sluggish US economy and sovereign debt problems in advanced economies will continue to severely impact the uranium spot price. Global uranium stocks have significantly underperformed during 2011 and analysts attribute this to the diminishing appetite for nuclear energy after the horror of Fukushima. “The sector has faced near-term uranium price uncertainty since the March nuclear crisis in Japan. (more…)

Taxpayer will take the biggest risk in uranium mining in Virginia

January 29, 2012

Virginia Uranium is seeking a public subsidy to cover the risks associated with their venture. This could result in a scenario not unlike the recent public bailout that covered the sub-prime loan risks taken by mortgage banks.

Uranium offers short-term boost, long-term risks, Star-Tribune Peter Hairston  January 4,   The long-awaited National Research Council, or NRC, report on uranium mining in Virginia concludes, as one could expect, that there are benefits and risks to uranium mining.

The potential public benefits to the Pittsylvania County region have been estimated and extensively publicized. What has not been given due attention in the NRC report or in public discourse is the allocation of the public risks in relation to the potential private benefits.

When this is considered in light of the basic, conservative principles of free market economics, it is clear that current uranium mining plans will result in the public bearing the principal risks, while the mining company gains the principal profits. (more…)


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