Australia okays Mulga Rock uranium mine

Deposit is the continent's third largest

Western Australia may soon have a new uranium mine, after the last environmental hurdle was cleared by Vimy Resources (ASX:VMY) to build its Mulga Rock uranium mine.

Josh Frydenberg, Australia's minister of environment and energy, approved the development subject to conditions outlined by the Environmental Protection Agency (EPA), Perth-based Vimy announced on March 6. Four days later the company said it has started initial construction, and will expedite developing the project further once the final investment decision is made.

"This is the final environmental approval required before work can commence," said Vimy chairman Cheryl Edwardes. "This approval has been more than three years in the making and has involved considerable effort on the part of all those involved."

The process began in July 2013 when Vimy launched an application for the project. In December Western Australia's environment minister approved the mine, with 14 conditions. They include management plans to minimize impacts on flora and fauna, soil, groundwater and Aboriginal heritage sites. The EPA also concluded that potential radiation exposure is within acceptable limits, according to World Nuclear News.

Located 240 km northeast of Kalgoorlie, in the Great Victoria Desert, the mine would produce 1,360 tonnes of uranium oxide (U3O8) per annum, according to a 2015 prefeasibility study. By comparison, Australia's Olympic Dam mine, the largest uranium deposit in the world, produces 4,500 tonnes of U3O8 per year.

Mulga Rock has 76.8 million pounds of indicated and inferred uranium throughout four deposits, which will be open-pit mined for an expected life of 17 years. Cobalt, copper, nickel and zinc are also expected to be extracted, through a central processing plant. According to Vimy, Mulga Rock is the third largest undeveloped uranium deposit in Australia.