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State funding to support BHP Billiton Olympic Dam expansion
Ross Louthean, Mineweb.com
An uranium conference in Adelaide was told by the State Minister for Mineral Resources Development, Paul Holloway, that the planned transformation of the big Olympic Dam underground mine into a massive open cut operation would result in the world's largest uranium mine, third largest copper mine and a significant gold producer.
Holloway told Paydirt's Uranium Conference that the Rann State Government had allocated A$6.2 million (US$5.56 million) through to 2012/13 for the Olympic Dam Task Force to assist owner BHP Billiton in proving the viability of this project.
Holloway said that the expansion would generate A$6.9 billion (US$6.19 B) per annum in revenue when it reached full capacity and BHP's draft environmental impact study said the would create up to 7,700 construction and short term jobs during the 11 year period before full production is reached. The operation's workforce at Olympic Dam would also double to more than 8,000.
Holloway said that despite a slight drop in volume, the value of Australian uranium exports exceeded A$1 billion for the first time in 2008-09.
"In terms of exploration expenditure on uranium in South Australia we have seen A$25.2 million (US$22.6 million) recorded in the most recent September 2009 quarter," he said.
Uranium exploration activity in South Australia continues to grow with over 300 uranium focused mineral exploration licences and over 100 mineral exploration licence applications registered as at September 2009.
The growing importance of South Australia in the global uranium scene was reinforced by Access Economics back in November claiming that SA is set to become the world's next energy export powerhouse through its uranium reserves.
Recent developments included a ground breaking ceremony last April for the Honeymoon uranium project for which owner UraniumOne signed a A$104 million (US$94.35 million) joint venture with the Mitsui group for development.
"If all goes to plan for Uranium One they expect to see production from Honeymoon in the second half of this year," Holloway said.
The Minister said the Government was looking forward to resolution of commercial issues facing the joint venture of Quasar Resources and Alliance Resources Ltd (ASX: AGS) on the advanced Four Mile uranium project, only 8 kilometres from the Beverley uranium mine operated by Quasar's parent Heathgate Resources which, in turn, is owned by global giant General Atomics.
First production from the A$90 million (US$80.8 million) Four Mile uranium project in South Australia is still possible in calendar 2010, according to 25% project owner, Alliance Resources.
In a separate presentation to the conference Alliance Resources' chief executive Steve Johnston said Four Mile's said the production milestone was achievable subject only to resolution of current legal issues between the company and 75% project owner Quasar.
The two parties are in dispute over native title issues relating to the joint venture -- with a court decision currently awaited -- payments to Heathgate Resources for modifications to the Beverley processing plant to process the Four Mile ore, and budget blowouts.
The project was initially estimated to cost A$90 million (Alliance: A$22.5 million share) but has been re-estimated higher to A$112 million (Alliance: A$28 million). Alliance has contributed just over A$13 million to the mine's development to date.
"Alliance's position is that the cost blowouts are unnecessary and are an unjustified change of scope to the project," Johnson said.
"However, presuming a favourable court outcome and resolution of other matters, Four Mile can be producing this year as that mine decision was made in 2008 based on an in-situ recovery mining model," Johnson said.
"The joint venture has continued to move down that path since then as the project is low cost and low environmental impact," he said.
"We can be ready to go quickly with a resin loading plant at Four Mile, transport of resin by truck to Beverley for stripping, precipitation and drying, packing and storage of the concentrate, and then the return of the stripped resin by truck to Four Mile.
The project has an inferred and indicated resource of 9.7 million tonnes at 0.33% uranium oxide for contained concentrate of 31,700 tonnes.
