BHP Billiton is to reactivate its Yeelirrie uranium project in Western Australia following the official lifting of the ban on uranium mining in the region.
The overturning of the six-year ban imposed by the previous Labor government follows the September election of a new Liberal-National coalition headed by Colin Barnett.
BHP Billiton said its first plan is to undertake a drilling programme to confirm the resource, which is estimated to by Geoscience Australia to contain more than 40,000t U3O8. It is also assembling a project team to evaluate mining and processing options and to prepare an environmental impact statement.
The Yeelirrie deposit was discovered in 1972 by the Western Mining Corporation (WMC), which was acquired by BHP Billiton in 2005. It is a shallow deposit that extends over 9km, is 1.5km wide and up to 7m thick. It is thought to be the world’s largest sedimentary deposit of its kind.
Between 1972 and 1980 significant exploration and three trial mining programmes were carried out at Yeelirrie. However the project was placed in a state of care and maintenance following the 1983 federal election and the implementation of the ALP ‘three mines policy,’ which meant permission to negotiate sales contracts was withdrawn.
The Australian Uranium Association’s (AUA’s) executive director, Michael Angwin, said: “BHP Billiton’s decision to restart Yeelirrie is a tremendous expression of confidence in the future of uranium mining in Western Australia.”
Western Australia is estimated to have almost 95,000t of uranium reserves and during the quarter to June 2008 nearly A$8 million ($5.2 million) was spent on exploration in the region. Thus a number of companies will benefit from this change in policy. This includes the Cameco (70%), Mitsubishi Development Pty (30%) joint venture who purchased the Kintyre uranium project – a potential 80 million pound resource – from Rio Tinto for $495 million earlier this year.
The decision to reactivate Yeelirrie comes at an interesting time – shortly after Uranium One shuttered its Dominion project in South Africa – following the recent decline in uranium prices. And although the uranium spot price has increased by $5 this week to $53, according to Ux Consulting, it is still significantly lower than it was for much of this year.
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