Commissioning of Australia's fourth uranium mine begins next month. The start to the long process should result in first production before the end of the year from the $138 million Honeymoon project in South Australia, a joint venture between Canada's Uranium One (51 per cent interest) and Japan's Mitsui & Co (49 per cent).
The project partners plan annual production of 400 tonnes of uranium for at least six years, making it the smallest of Australia's uranium mines behind ERA's Ranger mine in Kakadu, BHP Billiton's Olympic Dam mine in SA and Heathgate's Beverley mine in SA.
But Honeymoon is nevertheless set to beat into production what was meant to be Australia's fourth uranium mine, the Four Mile joint venture between Heathgate and Alliance Resources. Four Mile, so-called because it is four miles from Beverley, was meant to start production next month after winning clearance from federal Environment Minister Peter Garrett in July last year.
Mr Garrett, the former anti-uranium activist who once stood for the Nuclear Disarmament Party, said at the time he was ''certain this operation poses no credible risk to the environment''.
It won't either for some time, as a legal row between Heathgate and Alliance means first production from Four Mile has been delayed ''significantly beyond April 2010''. Equipment and materials for the project continue to be delivered to the site but are in storage pending a resolution of court cases.
Four Mile is due to become the 10th biggest uranium mine in the world, with forecast annual production of 1400 tonnes.
The big uranium developments that could triple Australia's annual uranium exports to 30,000 tonnes are much further off. BHP plans to triple output at Olympic Dam - the world's biggest deposit - and is investigating developing the Yeelerrie deposit in WA. Canada's Cameco and Japan's Mitsubishi also want to develop the WA Kintyre deposit.
All the uranium expansions are having to factor in lower uranium price expectations.
Uranium prices reached record levels in June 2007 of $US136 a pound in spot markets, but have been on a steady decline since. The spot price was last quoted at $US41 a pound, although the deeper and more reflective contract market is said to be at about the $US60-a-pound level.
The federal government's chief commodity forecaster, ABARE, said in its March-quarter review that the price decline reflected the situation where supply would exceed demand for the second year running.
It forecast Australia's uranium output for 2009-10 would fall by 13 per cent to 9000 tonnes because of the production problems at Olympic Dam. But in 2010-11, Australian production was forecast to rebound by 17 per cent to 10,510 tonnes, thanks to the return of Olympic Dam and initial production from Honeymoon and legal issues aside, Four Mile.
