uranium news

You have to sorta scour the news, to realise that the BHP board has not yet decided to go ahead with the new monster Olympic Dam uranium mine.   The decision delay is due to the massive cost of the massive project – which won’t make any money for decades.

However – let’s all pounce on the Australian government’s budget plans as the  cause of the delay. (Let’s just forget that the project benefits from all sorts og government exemptions, including the new Mining Resources Tax)

Diesel rebate may delay Olympic Dam Sun Herald, by: By Christopher Russell AdelaideNow May 03, 2012 BHP Billiton could be forced to delay expansion of the Olympic Dam mine if the Federal Government scraps its diesel fuel rebate in next week’s Budget, investment analysts say.

The company hinted at an investors’ conference in Sydney yesterday that another major project, at Port Hedland in WA, would be funded before Olympic Dam. Analysts at the conference said a fuel tax change could make the
difference and cause a delay to Olympic Dam….. http://www.heraldsun.com.au/business/diesel-rebate-may-delay-olympic-dam/story-fn7j19iv-1226345385388

Acting chief executive of the South Australian Chamber of Mines and Energy Nigel Long said the state’s mining industry was not solely reliant on the expansion of Olympic Dam because there were other “exciting opportunities” ahead, 

“The decision to press the pause button is a decision to be made by the BHP board, but we see a very good future for other projects in South Australia regardless…..

The BHP board will be considering whether to approve the project at a time when cost pressures in Australian mining are rising and profit margins are contracting.

BHP has Olympic hurdles to overcome, Financial Review 17 APR 2012  The South Australian government says it is not inclined to grant BHP Billiton an extension on an approvals expiring in December that cover the $US20 billion expansion of the Olympic Dam mine at this stage. Jamie Freed and Lucille Keen

Reuters report on mining conference in Canada  Mar 6, 2012  By Euan Rocha  TORONTO, March 6  -  The Anglo-Australia mining giant, which already operates an underground mine at the site, has yet to sign off on the budget for
the open pit…. but BHP may opt to delay taking on the heavy financial burden that could easily be in the $10 billion to $20 billion range…..

…. PDAC, the mining industry’s largest annual gathering. The convention, organized by the Prospectors and Developers Association of Canada, opened in Toronto on Sunday.

Even though Olympic Dam, located 550 km (345 miles) north of Adelaide, is one of BHP’s biggest growth prospects, the cost of
digging the massive pit may prove prohibitive.
Last month the company reported a profit decline, and it struck a cautious tone on its expectations for growth in China, one of its
biggest markets. That has led some to speculate that the miner may delay spending on capital-intensive projects such as Olympic Dam and the Jansen potash project in the Canadian province of Saskatchewan.

In late 2011, BHP finalized state approvals to begin construction work on the open-pit phase of the Olympic Dam project, but the agreement would lapse around December if BHP delays its decision on proceeding.

“We want to see a board decision before the end of the year about substantial works beginning. If not, the approvals run out and BHP know this,” said  Tom Koutsantonis, minister for mineral resources and energy for the state of South Australia.” I’m not in the business, and no government should be in the business, of allowing anyone to have massive tenements that they don’t develop …”-
A spokesman for BHP declined to comment on the remarks.
MASSIVE SCALE The sheer scale of the open-pit project is formidable. BHP will have to shovel rock for five to seven years before it reaches the Olympic Dam ore body, discovered in the mid-1970s….. http://www.reuters.com/article/2012/03/06/canada-mining-pdac-olympicdam-idUSL2E8E60E220120306

$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

Further delays to force BHP’s hand, BY:MATT CHAMBERS, The Australian November 18, 2011, BHP Billiton chief executive Marius Kloppers has warned that further regulatory delays on the $20 billion-plus Olympic Dam copper, gold and uranium expansion could mean the company looks at other options for its huge cashflows.

Speaking after the company’s annual general meeting in Melbourne yesterday, Mr Kloppers tempered chairman Jac Nasser’s enthusiasm for the project by saying things needed to move quickly.

“In our base-case plan, we’ve got a preferred date for Olympic Dam . . and it’s probably fair to say we’re a little later than we’d like to be,” Mr Kloppers said. ”If something gets delayed, then inevitably, probably what the
management will do, it will present the board with other options. I think that’s important.”

The comments were made after Mr Nasser said $US1.2bn of pre-commitment spending already approved by the board indicated how keen the boardwas to go ahead with Olympic Dam….

Mr Kloppers strengthened previous indications BHP was not looking at producing more uranium from Olympic Dam until well into the expansion’s production life. “The first two phases of Olympic Dam are really copper only and gold only type of things,” he said. “In due course we need to think about whether we extract more uranium, but I
see that as a separate decision, separate kit, separate capital decision, separate returns.”http://www.theaustralian.com.au/business/companies/further-delays-to-force-bhps-hand/story-fn91v9q3-1226198302416