It is business as usual for South Australia’s resources industry, and the uranium sector in particular, following the disruption brought about by the global financial crisis, according to South Australia’s Minister for Mineral Resources Development Paul Holloway.
In a speech delivered in Adelaide on March 1, the Minister said: “We all acknowledge the very real impact that the GFC had on the State’s resources industry, particularly in the exploration sector.
“It dramatically reduced global commodity prices, in turn impacting on production, export and refining values. It saw fluctuating global demand for commodities, placing pressure on production volumes while the diminished investment in and by resource companies was felt across all commodity classes as was the reduction in minerals industry workforce.”
He also stated that the impact was not as severe in South Australia as it was in other states.
He said: “There is an increasing focus on uranium issues and uranium mining in Australia, and especially here in South Australia.
“Despite a slight drop in volume, the value of Australian uranium exports exceeded Aus$1 billion for the first time during 2008-09, according to the Australian Safeguards and Non-proliferation Office.
“In terms of exploration expenditure on uranium in South Australia we saw $25.2 million recorded in the September 2009 quarter. The last time we had over $25 million per quarter was in June 2008 when a figure of $27.1 million was recorded.
“Uranium exploration activity in South Australia continues to grow with over 300 uranium focused mineral exploration licences and over 100 mineral ELAs registered as at September 2009.”
He said a common independent indicator of exploration activity is the month-by-month assessments and approvals of mineral exploration drilling work programs. “In the July to September 2009 period, the State experienced an increase in drilling work proposals, which appear to be trending back towards the consistently higher levels of 2008.
“Access Economics reinforced this message in October 2009 stating that South Australia is set to become the world's next energy export powerhouse through its uranium reserves, signalling strong potential for further uranium exploration expenditure in 2010.
“South Australia’s geological history has resulted in the State hosting approximately 38% of the world’s known low cost uranium reserves.”
Paul Holloway says the Honeymoon mine, 400km north-east of Adelaide, has been granted all approvals necessary to commence operations.
“UraniumOne signed a $104 million joint venture with Mitsui to progress development of the mine. If all goes to plan they expect to see production from Honeymoon in the second half of this year.
“In addition, the Government of South Australia looks forward to a timely resolution to commercial issues facing joint venture partners of the Four Mile uranium project, 8km from the Beverley uranium mine.
“The government has also been working hard to facilitate expansion of the world-class Olympic Dam copper-gold-uranium mine. BHP Billiton is proposing the creation of an open-pit mine which would deliver a six-fold increase in production.
“According to information provided in the draft EIS, the planned expansion would make Olympic Dam the world’s largest uranium mine, the world’s third biggest copper mine and it will continue to be Australia’s biggest gold mine in terms of production.
“The impact of the expansion on the State’s economy would be significant. BHP Billiton estimate that the mine’s contribution to Gross State Product would annually increase by $6.9 billion when Olympic Dam reaches full operating capacity.
“BHP Billiton also indicate in the EIS that the expansion will create up to 7700 construction and short term jobs during the 11 year period before full production is reached. The operations workforce at Olympic Dam will also double to more than 8000.”
He says commercial confidence in South Australia’s uranium industry is strong with the number of Adelaide-based exploration companies growing. These companies include Toro Energy, Quasar Resources, Curnamona Energy, Marmota Energy, Eyre Energy, UraniumSA, Southern Uranium, Eromanga Uranium, Mega Hindmarsh, TC Development Corporation and Uranium Equities.
A number of large international companies are also exploring for uranium in the State, including Heathgate Resources, Areva (via subsidiary Afmeco) and Cameco.
“On the exploration front we are seeing a new emerging uranium province, the Pirie Basin in the north-east of the State, being investigated by UraniumSA at their Mullaquana Project.
“There are also interesting developments in the Curnamona province with
Curnamona Energy’s Oban deposit. The company has the necessary approvals to conduct field trials to test operating and design parameters for a full scale in-situ recovery operation.
“In order to further expand our geological understanding of these regions, the South Australian Government’s Geological Survey Branch has several active research projects designed to advance knowledge of uranium mineral systems and promote discovery in South Australia.
“Of particular note is our collaborative research with the Government of Saskatchewan.
“Saskatchewan is a leading player in global uranium production and it is believed that suitable conditions exist for similar styles of uranium mineralization in South Australia.
“A technical exchange is under way between the two agencies, with two personnel recently returning from Canada having undergone familiarization with the geology, data and exploration methodologies in the Athabasca Basin.”