Grabbing the bull by the horns

In an historic move, WA has granted final approvals for its first uranium mine. Vicky Validakis speaks with Toro Energy and uncovers the state of Australian uranium.

Toro Energy’s Wiluna mine is set to become Western Australia’s first ever uranium producer after the federal government approved final environmental grants in April 2013.

Toro is in a bid for partners to help fund the $269 million Wiluna project and have previously stated if financing arrangements go to plan the mine will be in production by the end of 2015.

The Wiluna resource holds 54 million pounds of uranium, with Toro planning to mine the Lake Way and Centipede deposits over a 14 year life span.

The mine will process 1.3 million tonnes of ore annually, and produce around 820 tonnes of uranium oxide concentrate.

Demand

While the spot price of uranium has been sluggish in recent months, Toro’s managing director Dr. Vanessa Guthrie believes the sector is on the edge of an uptrend which will see demand rise along with long-term prices.

“The uranium price in the market is positioned on the cusp of a growth spurt and is on the edge of something that’s very exciting,” Guthrie told Australian Mining.

“There are some clear signals right now that we think will shift sentiment.”

One of those signals is the number of nuclear power plants being built around the world. The World Nuclear Association said there are 28 plants being in built in China with a further 266 planned or proposed plants around the globe.

While the other signal centres around the Japanese reactor restart program which is expected to be open for business in twelve months.

“This will shift sentiment towards the back end of this year towards a more positive one,” Guthrie said.

She predicts the market will rebound by 2016-2017 and with no new mines set to come into production before then, Wiluna is well-placed to supply the shortfall expected around the globe.

“Because there’s no new production you get to 2016 – 2017 and you see this increase in demand but no new supply available that is not already committed,” Guthrie explained.

And while much has been made of the lagging spot prices, Guthrie said Toro are more interested in long-term contract prices which are currently closing in on $60/lb.

Guthrie said nuclear energy has an important role to play in the energy needs of the emerging economies like China and India, and it was the needs of these countries which means uranium production in Australia needs to ramp up.

In a speech last month Resource Minister Gary Gray said as world energy demands increase, Australia is in the perfect position to supply more uranium.

"This year these power generators will need more than 66,000 tonnes of uranium but current global mine production is only 55,000 tonnes," Gray said.

The Australian Uranium Association predicts that if the uranium industry is able to reach its full potential, exports will increase from 9,000 tonnes a year to 28, 500 tonnes a year.

“Nuclear [capabilities] has a significant role to play in shifting those emerging economies from a high carbon emission base load to a lower one,” Guthrie said.

“Their base load energy requirements cannot be met in the climate change world by renewables alone: it has to be combined with a sustainable long-term base load and if you are in a carbon constrained world the best of those choices is nuclear from a carbon emissions point of view.

“The contribution even a small mine like Wiluna can make is a signal that Australia has an opportunity to not only maintain uranium production but to grow it and when you put that into the world of global climate change concerns I think that’s the really exciting part about addressing world energy needs that Wiluna provides.”

Working with the local community

Guthrie said an inclusive and transparent relationship and consultation process with local communities has been an important part of the mine’s profile since its inception, adding that discussions with local community groups and Traditional Owners had been well received.

“We have been talking to the Traditional Owners for about four years,” Guthrie said.

Part of the talks centre around direct employment at the mine through a cleanskin program, employment with contractors, and also the establishment of new businesses in the area which will be able to provide services during operation.

“Other benefits that we would like to generate are more around community development which will be established by what the Traditional Owners particularly want for themselves.”

However Toro have faced consistent opposition from a small group of anti-uranium activists who do not want to see the metal extracted.

The offices of the company have been the target of vandals, while protests often occur outside.

Late last year, around seven protestors were allowed into the company’s reception area where they emptied three bags of dyed yellow sand onto the floor and spread it throughout the office, emulating yellow cake.

Protesters were also at the company's annual general meeting in Adelaide to try and change the mind of shareholders regarding uranium mining.

Guthrie said the company had been open in sharing information with anti-nuclear groups and called on the groups to let Toro get on with its business.

“We have a view that we respect their right to a voice; I don’t believe that they are respecting our right to peacefully get on with our business when they come and threaten and intimidate our staff,” Guthrie said.

“I believe that we should also be respected in that we have been through a very rigorous government assessment process at both a state and federal level.”

Guthrie said nuclear energy was still largely misunderstood in Australia and this led to misinformation and fear.

“The nuclear fuel cycle is not well understood because we don’t have nuclear power in Australia and uranium itself and its properties are not well understood so it’s easy to create fear when there is not good information out there,” she stated.

Guthrie pointed to BHP’s Olympic Dam mine in South Australia and ERA’s Ranger mine in the Northern Territory as examples of how attitudes around the sector are changing as the companies get on with the business of producing uranium without incident.

“If you go into South Australia and go look back thirty or forty years when Olympic Dam was commencing, you saw the same sentiment, but in fact in South Australia today, while there are still some opponents to nuclear power, the community at large respects the mine and BHP’s right to get on with business.”

Producing U380

Guthrie said the geology of Wiluna represented an advantage in its development. 

The Centipede and Lake Way deposits are found close to the surface in shallow sediments typical of an old river system at depths of 10 metres at or below the water table.

Guthrie said that because the ore was so close to the surface and is freely won, traditional drill and blast methods would not be required and Toro would instead be using surface mining, similar to Fortescue in the Pilbara.

“Someone once told me it’s gardening, not mining,” she said.

The method also helps with rehabilitation as it will not leave behind a waste rock dump, a huge tailings dam or a big hole in the ground.

“At the end of mined life we have taken the ore out, extracted the uranium, and put the remainder back where it came from with a floor of clay, a wall of clay and a clay cap,” Guthrie explained.

“We’re only going down 15 metres and we are putting everything back in the hole we took out, minus the uranium.”

Guthrie said the way the uranium will be processed on site also has advantages.

Toro will use an alkaline heap-leach application, which means the uranium oxide can be precipitated without purification. But it’s the steps inside the processing train which help reduce impacts.

“We use waste heat recovery and power station off-gas recovery, so effectively the processing plant is almost a zero emission process because we don’t discharge any water,” Guthrie explained.

Under Toro’s plans uranium oxide will be transported from Wiluna through the outskirts of Kalgoorlie and over the border into South Australia.

Toro plans to co-ship the uranium with other producers, and Guthrie said the product is destined for China, Korea and Japan, with some off-take to be sent to the United States.

Looking ahead

“An investment decision is really based on seeing an improvement in the uranium market and also on securing a project financing partner and of course those two things are linked,” Guthrie said.

But with a bullish outlook on the future of the market Guthrie sees uranium as the next big export resource to come out of Western Australia.

“We see Wiluna as the first of a number of new emerging mines in WA and we think it’s a fabulous opportunity for WA to get on the map as a uranium exporter,” she said

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