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Australia is the second largest producer of uranium in the world. Here's a look at the mines that are producing today, and the significant ones that are being developed.
Despite sitting on the largest known recoverable resources of uranium worldwide — 1.69 million metric tonnes in 2019 — Australia uses no part of it for energy. Instead, Australia exports the valuable resource, which accounts for one-quarter of its energy exports.
In fact, Australia was the second largest producer of uranium in 2020, producing 6,203 metric tonnes. It was only beaten by Kazakhstan, which produced nearly 20,000 metric tonnes that year.Australian uranium production has centred around three mines in recent years — Olympic Dam, Beverly Four Mile and Ranger — until the Ranger mine ceased operations in 2021.
Main mines in the country
Here's a closer at these mines and the companies that own them:
1. Olympic Dam owned by BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BHP)
The Olympic Dam complex is built upon one of the world's most significant deposits of copper, gold, silver and uranium. In fact, it's the world's largest known uranium deposit. It has both underground and surface operations and it has a fully integrated processing facility, which means it is capable of extracting, refining and processing mined commodities.
In 2020, BHP Billiton produced 3,000 metric tonnes of uranium oxide (U3O8), which is nearly half of Australia's output and 6 percent of the world's production. In 2021, their uranium segment accounted for US$249 million in revenue.
Although the company produces a significant amount of global uranium, its production of copper, iron ore, coal and petroleum dwarfs its uranium production by a wide margin.
2. Beverly and Four Mile owned by private company Heathgate Resources
Australia's first in-situ recovery mine at Beverly sits on a uranium deposit about 520 kilometres from Adelaide. Owned by Heathgate Resources, a subsidiary of US-based General Atomics, the Beverly mine itself has all been mined out and production exclusively occurs at the nearby Four Mile mine (owned by Quasar, a subsidiary of Heathgate).
In 2020, Heathgate Resources mined 2,130 tonnes of uranium oxide from Four Mile, accounting for 4 percent of the world's uranium production.
3. Ranger Uranium Mine owned by Energy Resources of Australia (ASX:ERA)
Ranger was the longest serving uranium production mine in Australia at 35 years, located 8 km east of the town of Jabiru. The mine officially stopped processing operations in January 2021 after traditional owners of the land did not support extending the Energy Resources of Australia's (ERA) authority in the area. The company had already stopped mining operations back in 2012 and had been processing stockpiled ore since then.
The ERA, whose parent company is Rio Tinto, produced 1,574 tonnes of uranium oxide for 2020 — accounting for 2 percent of the world's uranium production — before shutting the mine down.
According to their 2020 annual report, continuing mining at Ranger in the future is also unviable. A change in legislation would be required and the company states that monitoring the mine in the gap between ceasing and resuming operations would simply add to its cost burden.
While ERA still holds the lease on the nearby Jabiluka orebody, it has been firm that it will not develop the site without the consent of the Mirrar Aboriginal people, and so the Jabiluka development has been indefinitely deferred.
Future mines in Australia
Australia accounts for almost one-third of the world's uranium deposits and there are several future exploration and expansion uranium projects brewing in the country. With 31 known deposits for uranium including the three discussed above, the list for potential new mines or mines being brought back online is long. Here are a few noteworthy ones.
The deposit was discovered in the 1970s, and in 2015 Boss Energy (ASX:BOE) bought Uranium One Australia and acquired the mine as part of the deal. The project is permitted to export up to 3.3 million pounds (1,496 tonnes) per annum and production is expected soon.
2. Mulga Rock
This polymetallic deposit was first discovered by PNC Exploration in 1979 and is now owned by Vimy Resources (ASX:VMY), formerly Energy & Minerals Australia. The deposit is divided into Mulga Rock East and West, and also hosts scandium, nickel and cobalt.
With approvals from both state and federal governments in 2016 and 2017 respectively, the mine can produce up to 1,300 tonnes of U3O8 per year. Vimy Resources intends to start on the Ambassador deposit with open-pit mining with an 85 percent recovery rate.
3. Angela / Bigrlyi / Obagooma / Thatcher Soak
Elevate Uranium (ASX:EL8), formerly known as Marenica Energy, has acquired or bought stakes in several mining projects in the Northern Territory and Western Australia. While there is no clear timeline on start of operations for any project, managing director and CEO Murray Hill was quoted saying that he expects the price of uranium to increase over the next decade, meaning the company would be well-leveraged as it bought assets at a reduced price.
Hill also expects modular reactor technology to improve in the next decade, allowing nuclear energy to be used across the landscape in rural areas and not just the bigger cities.
After suffering low prices after the 2011 Fukushima disaster, the nuclear energy market is expected to pick up, with generation growing nearly 3 percent annually by 2040, according to the World Nuclear Association's Nuclear Report. As the world continues to pivot to net-zero emissions, nuclear energy will find increasing favour from countries looking to shift their energy generation to cleaner sources.
The report states that uranium production will remain stable until the end of the 2020s and then decrease by nearly half from 2030 to 2040, highlighting the need for increased exploration and production in the space to avoid future supply disruptions.
Many projects are at advanced development stages and are only waiting for improved prices from the market.
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Securities Disclosure: I, Pallavi Rao, hold no direct investment interest in any company mentioned in this article.