Australia’s newest uranium mine will lose money, won’t create any jobs

Australia’s newest uranium mine will lose money, won’t create any jobs

After five years of delays, Australia’s Four Mile uranium mine has began operations, with owner Quasar admitting it will lose money on every pound of uranium oxide it extracts from it and won’t create any jobs.

However the company is confident the A$120 million investment, a joint venture project between Melbourne-based Alliance Resources and Quasar, will pay off in time.

The operation, Australia’s fifth and South Australia’s fourth uranium mine, began production in April to feed the processing plant at the site of the neighbouring and now closed Beverley uranium mine, owned by Quasar’s parent company, Heathgate Resources.

The 140 people who used to work at Beverly have moved into the development of Four Mile, which is projected to produce about 1.6 million pounds of uranium this year.

The firm will have to wait to see the first rewards. Uranium prices have crashed since the Fukushima incident in 2011, losing a further 30% in the last year to hit new record lows a few weeks ago. Although there’s no spot price for the metal, UX Consulting’s most recent indicator, published June 16, came to $28.5 a pound, down 31% over the last 14 months.

On the flip side, South Australia’s government is touting the Four Mile deposit as “the most significant one found anywhere in the world in the last 25 years," that is coming into operation, reports ABC Net.

When fully developed, the mine is anticipated to be the 15th-largest uranium mine in the world, with an estimated resource base of more than 100 million pounds. In its first year, it is expected to produce 1.6 million pounds.

Authorities also say the ore deposit is of a much higher grade than BHP’s Olympic Dam.

And only yesterday French nuclear energy operator Areva said it believed uranium prices have bottomed out and will recover quickly soon.