A closed uranium mine near Broken Hill will be reopened to seize on a renewed demand, its owner says.
A closed uranium mine near Broken Hill will be reopened to seize on a renewed demand, its owner says.

Honeymoon isn’t over for uranium mine

The Honeymoon uranium mine  "will be Australia's next uranium producer" following a $93 million restart, its owner Boss Resources says.

The ASX-listed company says the mine "can be fast-tracked to re-start production in 12 months with low capital intensity to seize an anticipated rally in the uranium market''.

Importantly the project, about 80km northwest of Broken Hill, has all of the necessary state and federal government approvals needed to restart mining.

Managing director Duncan Craib said the project was not likely to start redevelopment until at least 2021, with sales agreements for the uranium now needing to be negotiated.

The mine would employ 80-100 people who Mr Craib said would be sourced from the Broken Hill and SA regions.

The uranium would be transported by road to Adelaide, where it would then be shipped to a conversion facility overseas, likely in the US or Canada.

While the company has not yet signed off on restarting the mine, Mr Craib said the project had good financial prospects.

"Our feasibility study base case results confirm we will be Australia's next uranium producer,'' he said.

"The 100 per cent-owned Honeymoon Uranium Project offers an unparalleled investment opportunity; an impressive internal rate of return with low capital intensity and short time to re-start production, with excellent leverage to the anticipated upswing in uranium fundamentals.''

Packaged barrels of Uranium at BHP’s Olympic Dam Mine in SA’s Far North.
Packaged barrels of Uranium at BHP’s Olympic Dam Mine in SA’s Far North.

The Honeymoon deposit was discovered in 1972 and a demonstration plant was first set up in 1982.

The project, then owned by another company, received approvals to operate in 2008 and a full scale mining project was started in 2011, however was shut down in 2014 due to "low uranium prices at the time and perceived technical issues", Boss said.

The Honeymoon project uses "in-situ recovery", which involves injecting solvent into wells drilled into the deposit, dissolving the uranium, then recovering it at the surface.

The same process is used at the Beverley uranium mine in the Flinders Ranges. Uranium is also produced at BHP's Olympic Dam mine in the state's Far North.

South Australia, according to the Department for Mining and Energy, hosts 80 per cent of the known uranium resources in Australia, and 23 per cent of the entire world's known resources.

There was a boom in uranium exploration in SA in the mid 2000s, however the Global Financial Crisis followed by the Fukushima nuclear disaster in 2011 depressed the uranium price and cooled investor interest.

Boss said the forecast for the uranium price was again positive, and Honeymoon, with $170 million in existing infrastructure, was well-placed to capitalise on that.

"The World Nuclear Association forecasts a gap between primary supply and demand of just over 40 million pounds of uranium oxide in 2019,'' the company said.

"For the first time since the early 2000s, there is consensus in the industry from utilities as well as suppliers that supply from restarts and new mines is needed in the early 2020's to ensure long term security of supply and that current term price levels will not support that investment.''

Mr Craib said he was a firm believer that nuclear energy had a role to play in the decarbonisation of the world's economy and while safety concerns were paramount, uranium mining could be done safely.

 

Uranium from Olympic Dam – it will also be produced at Honeymoon mine.
Uranium from Olympic Dam – it will also be produced at Honeymoon mine.

 

SA Greens senator Sarah Hanson-Young said the focus should be on renewables, not nuclear energy.

"South Australia doesn't need to tether itself anymore to the toxic and dangerous cycle of the nuclear industry,'' Ms Hanson-Young said

"SA is better than this and we are best placed in the world to reap the renewables and green industry revolution.

"Rather than a big new uranium mine, SA needs investment in our clean green energy industry. We should be working towards SA being a net exporter of renewable energy and technologies. 'Green' mining and industries like lithium for batteries, green hydrogen and renewable powered manufacturing will create jobs fit for the climate crisis Australia is in."

Wilderness Society SA director Peter Owen said they would prefer to see investment in the state's vast renewable resources such as wind and solar.

cameron.england@news.com.au