Australia’s largely dormant uranium mining industry is set to receive a boost with a new project on target to commence production later this year.
Despite sitting on the world’s largest known recoverable resources of uranium — 1.24Mt as of 2020 — nuclear power is banned in Australia, and the country uses no part of this material for its energy needs.
Instead, it sells this valuable commodity, with uranium accounting for one-quarter of the nation’s energy exports.
Australia’s uranium reserves make up around one-third of global resources. It is also the world’s third largest producer behind Kazakhstan and Canada.
Growing Exports
While local nuclear power energy is stalled, Australian exports are forecast to increase, from 4,933t in 2021–22 to almost 8,000t by 2027–28.
Price and volume growth is expected to increase uranium export values, from A$605M in 2021–22 to over A$1B in the next few years.
Australian output is currently limited to two mines, but more are in prospect. Boss Energy’s Honeymoon mine, which is restarting from care and maintenance, is expected to produce around 1,100-1,200t of uranium per year for at least ten years, with first production expected in late 2023 or early 2024.
Conservation plans for the sandhill dunnart at Deep Yellow’s Mulga Rock site have now received formal approval, bringing start-up for the proposed mine a step closer.
Both mines are expected to commence and to reach their full output during the outlook period. Extra production and higher prices are expected to eventually double Australia’s uranium export values, with earnings reaching around A$1.2B (in real terms) by 2027–28.
Uranium exploration has risen steadily, following the lift in prices. Uranium miners spent A$12M on exploration in the December quarter 2022. This compares to A$3M spent in the December quarter 2021.
Australia generated A$564M in export earnings from uranium in FY2021-22 with potential for further growth as recent global energy trends reinforce the benefits of nuclear generation, including energy security, low emissions, and reliable supply.
Uranium for nuclear technology extends beyond energy production to the production of medicines for life saving diagnosis and treatment.
Australia’s uranium industry will continue to supply fuel for affordable, baseload, zero emissions electricity to people around the world.
The Minerals Council of Australia (MCA) Uranium Forum is a strong believer in the potential upside of the local nuclear industry.
The forum provides a national and international perspective on global nuclear fuel activities. It is focused on ensuring the Australian uranium industry is globally recognised as a safe, responsible, transparent, and successful supplier of fuel for clean electricity generation.
The MCA also continue to advocate for the lifting of the nuclear energy ban in Australia. Nuclear energy was banned less than two decades ago in Australia, a decision that has cost the nation significant global investment and scientific collaboration on new nuclear technologies.
Nuclear Upside
The MCA Forum is confident that the push for cleaner energy could see the local nuclear ban can be reversed. This can be achieved with a single amendment to the Environment Protection and Biodiversity Conservation Act 1999.
Nuclear energy proponents continue to suggest that it is a safe, readily deployable, zero emissions power source and should be included in Australia’s energy mix. It provides around 10 per cent of the world’s power, safely providing zero emission electricity to billions of people in more than 30 countries.
Advanced nuclear technologies like small modular reactors (SMRs) are ideally suited for Australia where they can work with intermittent power sources like wind and solar and provide zero emission, 24/7 power, in regional and remote areas. Australia, with its educated workforce, established uranium, nuclear research and university sectors, and strong non-proliferation credentials, would be a partner of choice for private venture capital-funded new nuclear power.
New Project
While the nuclear industry continues to wait on a change of government policy, a number of uranium explorers continue to push forward with new development options.
The most forward of these is the Honeymoon Uranium project, located in South Australia, 80km northwest of the town of Broken Hill.
The project hosts the historical Honeymoon Uranium Mine, which was Australia’s second operating in-situ recovery uranium mine, commencing production in 2011 under previous owner, Uranium One.
Operations at Honeymoon were suspended in November 2013 in response to falling uranium prices, with the project subsequently acquired by Boss Energy in 2015.
Boss Energy is now focused on a re-start of the mining operation, leveraging the significant high-quality infrastructure that remains on-site. Construction and development activities are proceeding on schedule to deliver first production in Q4 2023.
Boss Energy delivered an Enhanced Feasibility Study (EFS) for the Honeymoon Mine restart in June 2021.
Following careful analysis of the mines’ historical production performance under the previous owner, the EFS was focused on building a more resilient and sustainable mining operation.
The key outcome of the EFS was the decision to remove the existing Solvent Extraction (SX) plant and replaced it with Ion Exchange (IX) capacity to increase the production profile to 2.45Mlbspa over a +10-year mine life and reduce operating costs to achieve industry benchmark goals for low-cost producers.
The EFS confirmed this planned change to Honeymoon’s processing plant would lower costs and increase financial returns, with key outcomes including:
- Honeymoon pre-tax NPV increased to US$309M (up 35% from the January 2020 Feasibility Study), with a forecast pre-tax IRR of 47% and EBITDA margin of 62%
- All-In Costs decreased by 11% to US$31.86/lb; All-In-Sustaining Costs decreased by 16% to US$25.62/lb; and Cash Costs decreased by 21% to US$18.46/lb
- Capital cost of expanding production estimated to be US$80M – utilising Ion Exchange as a replacement of the existing Solvent Extraction plant
- Honeymoon is fully permitted for production, storage, and export of U308
- EFS is based on only 36Mlbs of the total JORC Resource of 71.6Mlbs, highlighting scope for significant growth
Boss recently reported that it is firmly on track for production this year following strong construction progress.
Managing director, Duncan Craib, said Boss Energy is set to realise its goal of starting uranium production later this year after making rapid construction progress at its Honeymoon uranium project in South Australia.
“It was an outstanding quarter which ensured Boss continues to be on track for uranium production in the December quarter of this year,” Craib said.
“The project’s committed expenditure now totals A$65M, which represents 62 per cent of the total capital cost budget.
“We are implementing our long-standing strategy of being in production at the start of the next uranium cycle and we are comfortably on track to achieve this, with first production set for later this calendar year.”
