UIC Nuclear Issues Briefing Paper 1
June 2006
- Uranium is part of Australia’s mining heritage, though only three mines are currently operating. Two more are proposed.
- Australia’s uranium reserves are the world’s largest, with 30% of the total. Production and exports exceed 11,000 tonnes of uranium oxide (9300 tU) per year.
- Australia’s uranium is used solely for electricity. It is supplied under arrangements which ensure that none finds its way into nuclear weapons.
- In the five years to mid 2005 Australia exported 46,600 tonnes of uranium oxide concentrate (39,500 tU) with a value of over A$2.1 billion to eleven countries around the world.
In the 1930s ores were mined at Radium Hill and Mount Painter in SA to recover radium for medical purposes. As a result a few hundred kilograms of uranium were also produced.
Uranium ores as such were mined and treated in Australia from the 1950s until 1971. Radium Hill, SA, Rum Jungle, NT, and Mary Kathleen, Queensland, were the largest producers of uranium (as yellowcake). Production ceased either when ore reserves were exhausted or contracts were filled. Sales were to supply material primarily intended for USA and UK weapons programs at that time. However, much of it was used for electricity production.
The development of civil nuclear power stimulated a second wave of exploration activity in the late 1960s.
Mary Kathleen began recommissioning its mine and mill in 1974. Other developments were deferred pending the findings of the Ranger Uranium Environmental Inquiry, and its decision in the light of these. Mary Kathleen recommenced production in 1976.
The Commonwealth Government announced in 1977 that new uranium mining was to proceed, commencing with the Ranger project in the Northern Territory. This mine opened in 1981.
In 1979, Queensland Mines opened Nabarlek in the same region of Northern Territory. The orebody was mined out in one dry season and the ore stockpiled for treatment from 1980. The mine site is now rehabilitated.
At the end of 1982 the Mary Kathleen mine was depleted and finally closed down.
A brief history of Australian uranium mining is appended
The Mines
Ranger opened in 1981 at a production rate of approximately 3300 tonnes per year of uranium oxide and has since been expanded to 5500 t/yr capacity. Sales are to Japan, South Korea, France, Spain, Sweden, UK, Canada & USA. Ranger is owned by Energy Resources of Australia Ltd (ERA), now a subsidiary of Rio Tinto.
During 1988 the Olympic Dam project, then a joint venture of Western Mining Corporation and BP Minerals, commenced operations. This is a large underground mine in central South Australia, producing copper, gold and uranium. Annual production capacity for uranium oxide has been expanded from 1800 to 4600 tonnes, with sales to USA, Canada, Sweden, UK, Belgium, France, Finland, South Korea and Japan. It is now owned by BHP Billiton, following its 2005 takeover of WMC Resources.
Both Ranger and the now-closed and rehhabilitated Nabarlek mines are on aboriginal land in the Alligator Rivers region of the Northern Territory, close to the Kakadu National Park (in fact the Ranger leases are surrounded by the National Park). Ranger is served by the township of Jabiru, constructed largely for that purpose. During the operation of Nabarlek mine, employees were based in Darwin and commuted by air.
Aboriginal people receive royalties of 4.25% on sales of uranium from Northern Territory mines. The total received simply from Ranger is now over $207 million, and $14 million came from Nabarlek.
The Olympic Dam mine is on formerly pastoral land in the middle of South Australia. A town to accommodate 3500 people was built at Roxby Downs to service the mine.
Following the 1996 change in government policy, three other projects were brought forward:
- Jabiluka, NT
- Honeymoon, SA
- Beverley, SA
Jabiluka will be an extension of the Ranger operation but awaits Aboriginal approval for development. The last two are small in situ leach operations.
Beverley started operation late in 2000. It is Australia’s first in situ leach (ISL) mine and is licensed to produce 1180 t/yr U3O8 (1000 tU), and reached this level in 2004.
Honeymoon received government approval to proceed with ISL mine development in November 2001, but is reassessing ore reserves and is not yet operational.
WMC Resources committed A$ 90 million over two years to assess the potential for doubling the size of Olympic Dam and in particular to take the resource categorisation of the southern orebody through to proven reserves and thus demonstrate the viability of a much expanded operation – up to 15,000 t/yr U3O8. The capital cost involved would be A$5 billion. The study will include 72 km of drilling on the southern deposit and assessing mining options including possibly a massive open pit to access the orebody which starts 350 metres down. Proved and probable reserves are some 376,000 t U3O8 (319,000 tU), the total resource being some 1.6 million tonnes (1.35 MtU), over one third of the world’s known total. Present production capacity is 4500 t/yr U3O8 with 235,000 t copper.
Australian Uranium Production and Exports
| 1997-8 | 1998-9 | 1999-00 | 2000-01 | 2001-02 | 2002-03 | 2003-04 | 2004-05 | ||
| Production | tonnes U3O8 | 5797 | 6396 | 8199 | 9645 | 7717 | 9149 | 9533 | 10964 |
| Exports | tonnes U3O8 | 6415 | 5989 | 8023 | 9723 | 7366 | 9592 | 9099 | 11215 |
| Exports | A $ million, FOB | 288 | 288 | 367 | 497 | 361 | 427 | 364 | 475 |
For tU divide by 1.1793.
Production and export by calendar year:
| 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |
| production (tonnes U3O8) | 5866 | 6473 | 5799 | 7055 | 8937 | 9119 | 8083 | 8930 | 10592 | 11222 |
| production (tonnes U) | 4974 | 5489 | 4917 | 5982 | 7578 | 7733 | 6854 | 7572 | 8982 | 9519 |
| exports (tonnes U3O8) | 5424 | 6916 | 5553 | 7578 | 8757 | 9239 | 7637 | 9612 | 9648 | 12360 |
| exports (tonnes U) | 4599 | 5864 | 4709 | 6426 | 7426 | 7834 | 6476 | 8151 | 8181 | 10481 |
| export value* ($A/kg U3O8) | 45.75 | 41.49 | 48.57 | 46.06 | 48.65 | 50.09 | 47.57 | 41.41 | 42.58 | 46.36 |
| export value* (US$/lb U3O8) | 16.81 | 13.96 | 13.84 | 13.48 | 12.85 | 11.78 | 11.73 | 12.24 | 14.22 | 16.03 |
* $A from declared net FOB estimates, $US calculated from this.
URANIUM EXPORTS FROM AUSTRALIA
Australian exports over the last three years have averaged almost 10,000 t/yr U3O8, providing about 22% of world uranium supply from mines. Uranium comprises about 40% of the country’s energy exports (4600 PJ in 2004-05) in thermal terms.
Australia’s uranium is sold strictly for electrical power generation only, and safeguards are in place to ensure this. Australia is a party to the Nuclear Non-Proliferation Treaty (NPT) as a non-nuclear weapons state. Its safeguards agreement under the NPT came into force in 1974 and it was the first country in the world to bring into force the Additional Protocol in relation to this – in 1997.
In the five years to mid 2005 Australia exported 46,600 tonnes of uranium oxide concentrate (39,500 tU) with a value of over A$ 2.1 billion. The nations which currently purchase Australia’s uranium are set out below. All have a large commitment to nuclear power:
The USA generates around 30% of the world’s nuclear power. Much of its uranium comes from Canada, but Australia is a major source. Japan and South Korea however are important customers due to their increasing dependence on nuclear.
Customer countries’ contracted imports of Australian uranium oxide concentrate may be summarised as follows, (but see also the reactor table):
USA: c 4100 tonnes per year – 103 reactors (supplying 20% of electricity).
Japan: c 2700 tonnes per year – 55 reactors (supplying 30% of electricity)
South Korea: c 1000 tonnes per year – 20 reactors (40% of electricity)
EU: about 3200 tonnes per year, including:
Spain: 9 reactors (24% of electricity)
France: 59 reactors (77% of electricity)
UK: 23 reactors (20% of electricity)
Sweden: 10 reactors (50% of electricity)
Germany: 17 nuclear reactors (30% of electricity)
Belgium: 7 reactors (55% of electricity)
Finland: 4 reactors (27% of electricity)
Australia is a preferred uranium supplier to world, especially East Asian, markets. It could readily increase its share of the world market because of its low cost reserves and its political and economic stability.
Australia has 38% of the world’s lowest-cost uranium resources (under US$ 40/kg). Nearly all of Australia’s 702,000 tonnes of Reasonably Assured Resources of uranium alone to US$ 80/kg U (US$ 30/lb U3O8) are in the under US$ 40/kg U category.
This figure compares with Kazakhstan (384,000 tU), Canada (334,000 tonnes), South Africa (232,000 tonnes) and Namibia (139,000 tonnes). The following table shows these plus Inferred Resources.
| tonnes U | percentage of world | |
|---|---|---|
| Australia | 1,074,000 | 30% |
| Kazakhstan | 622,000 | 17% |
| Canada | 439,000 | 12% |
| South Africa | 298,000 | 8% |
| Namibia | 213,000 | 6% |
| Russian Fed. | 158,000 | 4% |
| Brazil | 143,000 | 4% |
| USA | 102,000 | 3% |
| Uzbekistan | 93,000 | 3% |
| World total | 3,622,000 |
WORLD MARKETS
In the 1980s large stockpiles were built up by utilities, totalling about four times annual consumption. Prices dropped and mine production fell. Little exploration for uranium has been done since then. Today world uranium consumption is about 80,000 tonnes U3O8 and production is only about 42,000 tonnes, the balance being from stockpiles and recycled military uranium. Prices rose briefly in 1995-96 but then declined. They have been rising more strongly since early 2001.
See also UIC briefing papers on Uranium Markets and World Uranium Mines.
ABARE, DITR, ANSTO,
ERA & WMC quarterly and Annual Reports
Uranium Information Centre Ltd
A.C.N. 005 503 828
GPO Box 1649N, Melbourne 3001, Australia
phone (03) 9629 7744
fax (03) 9629 7207
Appendix
A brief history of Australian uranium mining
The existence of uranium deposits in Australia has been known since the 1890s. Some uranium ores were mined in the 1930s at Radium Hill and Mount Painter, South Australia, to recover minute amounts of radium for medical purposes. Some uranium was also recovered and used as a bright yellow pigment in glass and ceramics.
Following requests from the British and United States governments, systematic exploration for uranium began in 1944. In 1948 the Commonwealth Government offered tax-free rewards for the discovery of uranium orebodies. As a result, uranium was discovered at Rum Jungle in 1949, and in the South Alligator River region (1953) of the Northern Territory, then at Mary Kathleen (1954) and Westmoreland (1956) in north west Queensland.
In 1952 a decision was taken to mine Rum Jungle, NT and it opened in 1954 as a Commonwealth Government enterprise. Radium Hill, SA was reopened in 1954. Mining began at Mary Kathleen, Qld in 1958 and in the South Alligator region, NT in 1959. Production at most mines ceased by 1964 and Rum Jungle closed in 1971, either when ore reserves were exhausted or contracts were filled. Sales of some 7730 tonnes of uranium from these operations were to supply material primarily intended for USA and UK weapons programs at that time. However much of it was used in civil power production.
The development of nuclear power stimulated a second wave of exploration activity in the late 1960s. In the Northern Territory, Ranger was discovered in 1969, Nabarlek and Koongarra in 1970, and Jabiluka in 1971. New sales contracts (for electric power generation) were made by Mary Kathleen Uranium Ltd., Queensland Mines Ltd. (for Nabarlek), and Ranger Uranium Mines Pty. Ltd., in the years 1970-72.
Successive governments (both Liberal Coalition and Labor) approved these, and Mary Kathleen began recommissioning its mine and mill in 1974. Consideration by the Commonwealth Government of additional sales contracts was deferred pending the findings of the Ranger Uranium Environmental Inquiry, and its decision in the light of these. Mary Kathleen recommenced production of uranium oxide in 1976, after the Commonwealth Government had taken up a 42% share of the company.
The Commonwealth Government announced in 1977 that new uranium mining was to proceed, commencing with the Ranger project in the Northern Territory. In 1979 it decided to sell its interest in Ranger, and as a result Energy Resources of Australia Ltd was set up to own and operate the mine. The mine opened in 1981, producing 2800 t/yr of uranium, sold to utilities in several countries. Production over three years to mid 2002 averaged 3533 t/yr of uranium.
In 1980, Queensland Mines opened Nabarlek in the same region of Northern Territory. The orebody was mined out in one dry season and the ore stockpiled for treatment from 1980. A total of 10,858 tonnes of uranium oxide were produced and sold to Japan, Finland and France, over 1981-88. The mine site is now rehabilitated.
At the end of 1982 Mary Kathleen in Queensland had depleted its ore and finally closed down after 4802 tonnes of uranium oxide had been produced in its second phase of operation. This then became the site of Australia’s first major rehabilitation project on a uranium mine site, which was completed at the end of 1985. The Rum Jungle Rehabilitation project also took place in the 1980s.
In the 1983 federal election the Australian Labor Party (ALP) won government and in 1984 the ALP National Conference amended the Party platform to what became known as “the three mines policy”, nominating Ranger, Nabarlek and Olympic Dam as the only projects from which exports would be permitted. Provisional approvals for marketing from other prospective uranium mines were cancelled. This policy persisted until the change of government in 1996, despite the fact that Nabarlek ceased production by 1988.
During 1988 Western Mining Corporation’s Olympic Dam project commenced operations. This is a large underground mine at Roxby Downs, South Australia, producing copper, with uranium and gold as by-products. Annual production of uranium started at some 1300 tonnes, with sales to Sweden, UK, South Korea and Japan. After a A$ 1.9 billion expansion project, production increased to over 4000 tonnes uranium per year by mid 2001.
Both Ranger and Nabarlek mines are on aboriginal land in the Alligator Rivers region of the Northern Territory, close to the Kakadu National Park. In fact the Ranger and two other leases are surrounded by the National Park but were deliberately excluded from it when the park was established. Ranger is served by the township of Jabiru, constructed largely for that purpose. Nabarlek employees were based in Darwin and commuted by air.
See also: Former Australian Uranium Mines
