Australia Yet to Get New Uranium Mine Applications (Update3)
By Tan Hwee Ann and Xiao Yu
Feb. 13 (Bloomberg) -- Australia's government, seeking to woo investment in its uranium resources as China increases demand, is yet to get any applications to mine the fuel in the Northern Territory 18 months after taking control of approvals.
The government is ``hopeful'' rising exploration in the territory, which has deposits worth more than A$12 billion ($9 billion), will lead to new mines, said Resources Minister Ian Macfarlane yesterday in Perth. Energy Resources of Australia Ltd., which owns the only uranium mine in the Territory, halted its Jabiluka project because of objections by indigenous groups.
The Liberal-National coalition federal government is trying to get state governments, all controlled by the opposition Labor Party, to drop a ban on new uranium mines. The 23-year-old ban has restricted Australia, with 40 percent of the world's uranium reserves, to supplying just 23 percent of global demand.
``Mine start-ups are big decisions for companies, they're not taken lightly and often these decision processes take a long time,'' said Kent Grey, Adelaide-based head of the uranium focus group at lawyers Minter Ellison.
Prices for uranium, used to power plants that supply 16 percent of the world's electricity, have more than doubled in the past year.
Australia and China ratified a nuclear transfer agreement last month, paving the way for uranium exports worth some A$250 million from early this year. Sinosteel Corp., China's second- biggest iron ore trader, is among companies that have applied to explore for uranium in the Northern Territory, Cui Xiaofei, managing director of Sinosteel's Australian unit, said in an interview in Perth today.
Shares in Energy Resources, a unit of the Rio Tinto Group, rose A$1.65, or 7.7 percent, to A$24.42, at the 4:10 p.m. close of the Australian Stock Exchange.
Direct Control
``I haven't had one (application) put before me, but I'm hopeful there will be one based on the increased minerals exploration,'' Macfarlane said. ``There's great potential, but it has to comply with environmental standards and have indigenous owners consultation.''
The federal government took over approval for uranium mining from the Northern Territory in 2005. It's the only region over which it has control of the approval process. Companies exploring for uranium in the Northern Territory include Compass Resources NL and Northern Uranium Ltd.
``These companies are still in the exploration phase,'' Minter Ellison's Grey said. Uranium projects in South Australia and Queensland are best placed to benefit from any relaxation in mining bans by the states, ABN Amro Holding NV said in December.
Labor Opposition
SXR Uranium One Inc., which agreed to buy UrAsia Energy Ltd. for $3.1 billion yesterday to create the world's second- largest uranium producer behind Cameco Corp., was in September awarded a license by the South Australian government's environmental agency to commercially mine the Honeymoon deposit.
South Australia's Premier Mike Rann supports the expansion of uranium mining, opposed by his party. Labor is due to hold a conference in April, where a position on uranium will be decided.
Mining of the metal takes place in three places in Australia: BHP Billiton Ltd.'s Olympic Dam mine in South Australia; Energy Resources's Ranger mine in the Northern Territory; and Heathgate Resources' Beverley mine in South Australia. Heathgate is owned by San Diego-based General Atomics.
Western Australia, where Premier Alan Carpenter, wants to keep the ban on mining, has uranium reserves worth A$40 billion, Macfarlane said today.
Sinosteel Venture
Almost 80 mineral exploration license applications were lodged for 18 exploration areas released in the Northern Territory in December. ``A number of applications'' were from Chinese companies, Northern Territory Mines Minister Chris Natt said last month.
Sinosteel has also signed a joint venture agreement with PepinNini Minerals Ltd, in which Sinosteel plans to take 60 percent stake for A$30.5 million, Cui said. Should the project go ahead, it will be the first uranium project in Australia with Chinese investment.
Australia may produce as much as 60 million metric tons of liquefied natural gas per year within 10 to 15 years, said Macfarlane, who was in Perth to attend the Asia-Pacific Economic Cooperation's third meeting of mining ministers.
LNG Expansion
ConocoPhillips, which a year ago started up production at an LNG plant in Darwin, Northern Territory, said last year it's planning an expansion of the plant, while Woodside Petroleum Ltd., Chevron Corp. and BHP are among companies studying new LNG projects in Western Australia.
Last March, Macfarlane said the government plans to work with the nation's oil and gas industry to almost quadruple liquefied natural gas exports to more than 50 million tons a year within a decade.
``We would like to do it in 10 years, but you have to build the LNG plants, and before you do that, you need environmental,'' and other approvals, he said.
Competition with miners expanding iron ore, coal and metals output for labor and equipment may also slow any expansion plans, said Macfarlane.
The minister said today Australia will spend A$59 million over five years to help improve geological mapping of under explored areas of the country.
To contact the reporter on this story: Tan Hwee Ann in Perth at
hatan@bloomberg.net ; Xiao Yu in Perth at
yxiao@bloomberg.net
Last Updated: February 13, 2007 02:30 EST
http://www.bloomberg.com/apps/news?pid=20601087&sid=a3qk.MHzb9WA&refer=home