With vast economically recoverable uranium resources yet a newly elected government, the future of uranium mining in WA remains uncertain.

Brian Reilly

MANAGING DIRECTOR, CAMECO

March 22, 2017

When we met in 2014, you mentioned that WA needed to become more educated regarding Uranium mining. Could you describe the sentiment towards it today?

 Western Australia has moved forward significantly in terms of its understanding and acceptance of uranium mining. As a nation, Australia hosts over 30% of economically recoverable global uranium resources, which is a significant competitive advantage, yet we supply only about 10% of global production. Although we do not currently have any uranium mines in production in Western Australia, there are a number of projects that have been assessed under the state’s comprehensive environmental assessment process. Five projects  in the state have been granted state environmental approval and are now ready for mine development, once the market turns. These projects will generate revenue and jobs for WA in the future.

Will the shadow of the Fukushima disaster dissipate in the foreseeable future?

The market is still feeling the impacts of the Fukushima disaster, which happened in March 2011. Our challenge as an industry is to prepare our projects for a time when the market signals new uranium supply is required. Prior to the Fukushima accident, Japan had more than 50 reactors operating and was a major player in the global nuclear power market. After the earthquake and tsunami however, all the reactors were shut down. The expectation is that perhaps 30 of these reactors will return to operation over time, however it has certainly taken longer than anyone anticipated. It will happen, but a combination of factors including safety concerns, the age of the reactors, their location in terms of seismically active fault-zones, and the support of the local community are impacting the pace of restarts.

Could you outline Cameco’s Kintyre project and describe how the JV with Mitsubishi Development came to be as well as describe your Yeelirrie project?

Cameco’s eastern-Pilbara Kintyre project is an advanced-stage exploration project that was acquired from Rio Tinto in 2008. We are the operators of the project, which is 30% owned by Mitsubishi Development. Kintyre has about 37.5 million pounds of uranium, which is relatively small, but the project has been through a pre-feasibility study, received state and federal environmental approval, and has an Indigenous Land Use Agreement (ILUA) in place with the Martu. The challenge with Kintyre is that we need additional resources for the project to move forward, but it is effectively ready to go once the market turns.

Cameco’s flagship project is Yeelirrie, which was purchased from BHP Billiton in 2012. It contains 128 million pounds of uranium and we have been progressing the project through the  environmental impact assessment (EIA) process. It was recently granted approval at state level, and we expect Federal level approvals in Q2 2017. It is certainly a world-class project by any standard.

Do you have any advice for companies looking to invest in WA or start operations in the region?

WA is a great place to do business and I would encourage any company to consider this jurisdiction as a favourable location to conduct business. However there is always room for improvement and issues such as taxation, environmental and business regulation and native title need to remain on the reform agenda so that the state can continue to attract investment. The resources sector is held to the highest standards in terms of the regulatory framework in WA. Nonetheless, we continue to advocate for a more streamlined environmental assessment process to mitigate duplication of state and federal processes.  Ultimately, a one-stop-shop approach to environmental assessment is the preferred model.

The challenge for uranium projects in WA at the moment is the market; we need to see a recovery in uranium prices to support final investment decisions on new projects. In the short and medium-term, the global uranium market remains very challenging and is over-supplied. The long term fundamentals however are strong, as we observe countries such as China, India, South Korea, Russia and the UAE building new nuclear power plants, which provides some optimism for the future.

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