The pending re-start of nuclear reactors in Fukushima-impacted Japan - expected to commence from around April this year - should have a marked upwards pressure on the current global spot price for uranium, according to Australian uranium developer, Toro Energy. Also from the second day in Adelaide today of the Paydirt 2012 Uranium Conference, A sector wide analysis of 60 ASX-listed stocks with uranium interests says the market shakeout in the uranium and nuclear energy areas in the past 12 months has created significant equities value going forward.

Toro Energy’s Managing Director, Greg Hall, said the short-term spot price had been impacted primarily by the temporary uranium inventory overhang resulting from Japan’s “plant shutdown and safety stress checks” approach in the wake of last year’s tsunami incident. “This inventory overhang will start to be eliminated when Japanese reactors commence re-starts - anticipated in April 2012,” Hall said. “The Japanese Government is committed to re-opening plants as only two of its 55 reactors are operating and it is facing increasing country economic and production issues 12 months on from Fukushima as manufacturing and industrial plants cannot source sufficient electricity. This strengthening of the price will then become a welcome inclusion to the very obvious continuous and growing demand for uranium globally.

“This demand is expected to grow by a further 100 Mlb plus per annum by 2025 off the 2011 total uranium demand of 170 Mlb - so this industry is far from dead as some pundits would have the market believe. In fact, it is becoming quite the reverse as a few equities analysts are now starting to factor in.”

Hall said the uranium demand growth was no better evidenced by the fact the economic powerhouses of China, South Korea, India and Russia together comprised 75% of new reactor construction - a build rate that would underpin fresh mine supply for the next two to three decades at least. “What also has been ignored in the post-Fukushima information trail is that in addition to events in Japan, the supply squeeze has been exacerbated by a number of announced delays in 2011 to major uranium project developments. This has generated a market over-estimation of uranium supply coming through the forward pipeline.

“This over-estimation has been to such an extent that some market forecasters are now suggesting the incentive price for medium term uranium projects is at least 50% above the current spot price for uranium,” Hall said.

“And all this of course while new global uranium mines are taking longer to bring on-line - mostly due to approval timelines, technical issues, political issues, costs and finance. Not surprisingly, only a few mines around the world will be ready to fill the demand gap from 2014 onwards - Toro’s Wiluna uranium project in Western Australia intends to be one of these.”

Toro’s wholly owned Wiluna project, with a 54 Mlb, is anticipated to receive government approval decisions by mid this year. The company has already conducted successful trial mine and full pilot process plant testwork at Wiluna, has process engineering design and feasibility studies underway, is developing project financing options, and is planning construction and commissioning through 2013 with first uranium sales in 2014. Hall told Conference delegates Toro was anticipating a financing of around A$300 million for Wiluna’s development and commissioning of which about one third or $100 million could be debt funding. The remainder will most likely be a combination of joint venture partner and equity market.

The potential for Australian uranium stocks to do better will be continuously enhanced in line with forecast growth in global electricity demand and the wider inclusion of nuclear power in countries’ energy mix. Addressing the conference, Martin Place Securities Head of Research, Greg Burns, said the sector suffered in 2011 through concerns over the global economic outlook coupled with the Fukushima nuclear power plant incident - driving down the share price of domestic uranium companies.

“However, in our just completed analysis of the 60 ASX-listed uranium plays, their potential needs to be benchmarked against the fact electricity demand will grow by around 67% to 2030, in an environment of public and government expectation to reduce carbon emissions - plus a supply pressure point for uranium,” Burns said. “In our view, the Australian listed uranium sector therefore offers amazing value. The players offer capital appreciation from current depressed levels through current production, future production potential and opportunities in corporate rationalization of strategic uranium deposits.”

Burns said that in its analysis, there were some fundamental drivers for backing an upside in Australian listed uranium stocks. “Since 1990, electricity demand has grown 3% per annum with nuclear power producing 14% of global power generation,” he said. “Nuclear power provides more than 21% of electricity on OECD countries, but only 1.8% to date in China so the growth potential there is obvious. Nuclear power generation was 2,630TWh in 2011 from 434 reactors, consuming 73,800 t of U₃O₈. Yet that U₃O₈ usage is set to explode, growing to 97,700 t by 2020 from 500 reactors - a 17% rise - lifting to 158,400 t by 2030 from 820 reactors - a rate that represents an 85% hike on current usage. In addition, the Megatons to Megawatts program which uses ex Russian military uranium supplies, is due to conclude next year and combined with the fact that the Fukushima incident only caused a 2% cut in global capacity, all contribute to an expected strong future demand for freshly mined uranium. Australia can help fill that uranium demand cycle.”

Sandvik Mining has launched two new underground trucks in the market. It says “the new TH550 and TH540 are the first in the underground mining world to offer energy-efficient and low-emission EPA Tier 4i/EURO Stage IIIB engines. Compact and agile, they offer the biggest payload per envelope size and empty vehicle weight.” The new TH550 and TH540 are based on ‘the old workhorses’, Sandvik T50 and T40, which Sandvik says “were widely regarded as the best underground trucks in the market.” The all-new TH trucks were born as a result of comprehensive research, customer feedback and modern thinking. One of the main advantages of these trucks is the optional Tier 4i/IIIB engine that consumes less fuel, produces fewer emissions and has better torque characteristics for trucks than its predecessors. Currently, the TH550 and TH540 are the only trucks in the market available with these engines.
“If these engines were left running, for example, in the centre of some large city, the exhaust fumes coming out of the engines would be cleaner than the air they took in from the city. These trucks can thus provide a healthier environment for all personnel working underground,” says Tomi Pikala, Marketing Support Manager at Sandvik Mining

The TH550 and TH540 are engineered and designed with special emphasis on environment, health & safety (EHS), productivity and reliability. New features, such as the possibility to conduct all daily maintenance from ground level, offer enhanced safety and usability. Operator comfort and overall productivity are improved with a remodelled cabin featuring a new ergonomic, vibration-reducing seat, a new dashboard, a new control system screen, automatic gear shifting and adjustable climate control.

While the Tier 4i/IIIB engines cut operational costs through lower fuel consumption, a substantial reduction in ventilation requirements provides even greater savings. Uptime hours are increased with practical, time-saving features such as a large tank capacity, centralised ground level maintenance and easily cleanable radiators. The new cooling system, even safer electrical wiring, new steering cylinders and durable tires, combined with the other new features, are designed to increase operating hours per year and extend the overall service life of the trucks. As a result, increased uptime and prolonged service life provide the ultimate in productivity.

Mining software major Runge has released XPAC 7.12, the latest update to its flagship scheduling software, which it says “continues a thirty-year record of expertise, leadership and trust.” Dr Ian Runge, who founded Runge in 1977 and still a non-executive director, pointed to the longevity of the company’s innovation. “XPAC is still reliable and still relevant and still compatible after all this time. How many other vendor relationships can truly be called ‘Life of Mine’?” Runge believes that it is the most sophisticated mine scheduling software available to date. XPAC 7.12 was released at the end of January 2012 and sports new 3D graphics and reporting features that Runge says “open a new world of data visualisation, along with significant user interface upgrades.”
“XPAC 7.12 has a new look, but it’s not just a facelift,” said Alun Phillips, Runge’s Product Manager for scheduling solutions. “It delivers some fundamental advances in scheduling software. The combination of accurate spatial data and powerful 3D geometry opens up some tremendous opportunities, and the new reporting tool cuts down hours of work to just minutes. XPAC has been the industry standard for some time now and it’s still the scheduling software to use when you want the job done right,” he said.” The keys to the improvement have been the inclusion of a completely new reporting engine and an injection of power and versatility to the graphics generator. The enhanced Analysis Reporting Module includes a pivot table based analysis tool that draws data directly from the mining model, including calendar databases, and via user-defined expressions. This is a significant benefit because the Analysis Reports Module understands the nature of the data and manages issues like weight averaged fields, resources and activities automatically. The updated graphics engine now associates 3-D solids with each database record, instead of the more traditional extruded polygons. The spatial accuracy of the new solids opens up many more possibilities. For example, users can now use a topographical surface or other triangulations to define the starting point of the schedule, by automatically assigning appropriate pre-schedule values.

XPAC 7.12 still retains the ability to make use of the older 2D graphics meaning users will lose none of the functionality to which they have become accustomed. The look and feel upgrade to XPAC 7.12 brings all the benefits of a modern interface, without the hassle of relearning command and function locations. Like a modern browser, XPAC 7.12 has a tabbed user interface, which gives the user greater control of more data sets. It is optimised for multiple monitors and adjusts its behaviour to make the best use of any monitor configuration. XPAC 7.12 also lets users personalise the workspace. “As XPAC has developed and more features have been introduced, we have done our best to provide a manageable collection of the most commonly used options in XPAC’s toolbars. Inevitably different users and different types of mines will use different parts of the application, so we’ve made the toolbars customisable,” said Alun Phillips. “It is now simpler for users to organise their own workspaces and focus on the data,” he said.

SGS has announced that its Laboratory Quality Services International (LQSi) group has successfully conformed to the ISO/IEC 17043:2010 quality standard which overviews the requirements for laboratory proficiency testing programs. The audit and ongoing accreditation requirements are administered by the American Association for Laboratory Accreditation (A2LA).

According to SGS, very few wide-spectrum minerals-based laboratory proficiency testing providers have achieved this feat. The assessment covers the preparation, verification and distribution of test items characteristic of the minerals sector such as precious and base metal ores and concentrates, coal, coke, and fertiliser. The statement said: “the effective and efficient processes developed, implemented and documented by LQSi during their drive for accreditation to ISO/IEC 17043 show the team’s commitment to the field of proficiency testing, an important component of the ISO/IEC 17025 laboratory testing standard. Obtaining this accreditation signals SGS’ dedication to continual improvement and the highest quality standards.”

Saudi Arabia’s Waad Mining City in the North was endorsed by the Cabinet last week and will receive SR26 billion in preliminary investments including the setting up of a SR21 billion phosphate company, Petroleum and Mineral Resources Minister Ali Al-Naimi said recently. The potential of the country’s mining sector is examined in more detail in International Mining’s April issue. Khaled Al-Mudaifer, CEO of Saudi Arabian Mining Co (Maaden), said the availability of large quantities of phosphate near gas wells in the north and the presence of a railway system would boost phosphate industry as well as downstream industries. As noted in the IM article, Maaden has a proven track record on large projects including a huge phosphate complex that began operations last year. “We are also working on a SR40 billion aluminium smelter,” he added.
The city is to be built northeast of Turaif. Al-Naimi said the city would add SR15 billion to Saudi GDP and will have a railway and an electricity supply system. Three wharfs will be constructed in Ras Al-Khair Port as part of the project.

Prince Faisal bin Turki, an adviser at the Ministry of Petroleum and Mineral Resources, said the project “will contribute to the establishment of a sustainable industry that would accelerate the region’s economic growth.”

Al-Mudaifer discussed plans to establish seven large plants in the city with an annual capacity of 16 Mt to produce phosphate concentrates, sulphuric acid, phosphoric acid, calcium phosphate, concentrated phosphoric acid and sodium tri poly phosphate.

There is to be a large Saudi delegation (approximately 40 companies) attending MINExpo in Las Vegas this year. The U.S.-Saudi Arabian Business Council will be hosting a Seminar on Mining Opportunitiesin Saudi Arabia during MINExpo and will be hosting a reception for at the show. Speakers will include the U.S. Ambassador to Saudi Arabia and the CEO of Ma’aden. Contact ussaudi@us-sabc.org

An Australian explorer said today that one of Africa’s most prolific uranium plays is shaking off the tag that it was the uranium province that was missed and is starting to emerge as a potentially significant greenfields province. Addressing the first day in Adelaide of the Paydirt 2012 Uranium Conference, Impact Minerals’ Managing Director, Dr Mike Jones, said Botswana had achieved in little more than five years, a reputation now as one of the best modern era uranium provinces on the African continent - and was starting to deliver substantial exploration upside.
“It was very much a case of the uranium province that was missed, with some prospects identified in the 1970s but no exploration between 1979 until as recent as 2006,” Jones said. “With sand cover obscuring airborne radiometric responses, Botswana was ‘off the radar’ - until the 2006 discovery of the Lethlakane deposit - now a 261 Mlb uranium oxide resource at a grade of 150 ppm,” he said.

“Impact has confirmed the potential of the rest of eastern Botswana by the discovery of three other modest deposits including Lekabolo and of a similar style to Lethlakane. As well, Impact has demonstrated the potential for a spectrum of uranium mineralisation styles from Kalahari calcrete palaeochannels, Karoo hosted deposits and in our new Mahalapye Block, the potential for Athabasca, IOCG-U and Rossing-type uranium deposits in both sedimentary rocks and granites.”

This modern day exploration renaissance delivered for Impact the recent Red Hills discovery which Dr Jones says is regarded by the company as clearly “a major system”.

“Red Hill and its companion discoveries are all in terrain not unlike the challenging Kalahari sediments of Namibia immediately west of Botswana and which hid the major Husab discovery for 35 years,” Jones said. “This discovery demonstrates the untapped but emerging modern day uranium potential for Botswana.

“Red Hill is generating increasing uranium indicators in all directions and will now be a prioritised drilling focus for Impact in 2012, as the potential for high grade uranium results there is high.

“This potential includes an untested strike length of at least 100 km - all 100% owned by Impact - so we have considerable belief in Botswana’s potential to continue to deliver discoveries with world-class potential,” Jones said.

Another speaker at the conference, the ASX-listed Australian developer of South Korea’s first uranium mine says that country is in a race against time to lock down further security of supply as the world’s 10th largest economy finds itself losing ground in the buyers’ market to surging energy consumers elsewhere.

Stonehenge Metals Managing Director, Richard Henning, said South Korea was currently the fifth largest producer of nuclear power in the world. “It knows however it is in a buying and supply race that is the survival of the fittest. Most forecasters expect it to slip to eighth or ninth largest consumer as early as 2030, losing ground to China, the US, Russia, France, Japan and the Ukraine,” he said.

“That higher demand from other countries means South Korea will be competing for uranium supply in a marketplace where the current uranium shortfall is being met by secondary supply which will not be available after the end of next year. After that, the supply shortage gap will simply get larger so South Korea has commenced an aggressive program of securing uranium supplies for both domestic needs and foreign backed power construction plant contracts.

“With 12 nuclear plants to be commissioned by 2021, of which six are currently under construction, South Korea will need more than 19.6 Mlb/y of U₃O₈ annum by 2020 - almost double its current consumption. This will lift the level of domestic nuclear plant supplied energy from 40% to 60% of South Korea’s total power consumption by 2030.”

Henning said that against this backdrop, South Korea understood uranium, had established a mining law with no royalties, black empowerment requirements or native titles issues and offers 25 year mining rights.

Stonehenge’s main Daejon uranium project, a 65 Mlb Inferred resource with an average grade of 320 ppm, can potentially supply 25% of South Korea’s uranium requirements. “We have a key goal of upgrading the resource through further drilling and acquisition while previous metallurgical and subsequent verification work has shown that Daejon can consistently deliver 90% uranium extraction. Importantly, Daejon has the potential to be developed in a country with low sovereign risk and which lists uranium as one of its top six minerals of national significance. That will also assist our public interface when we shortly launch a comprehensive community engagement program, as not ever South Korean supports nuclear energy or uranium mining.”

Back in Australia, the untapped prospectivity for uranium around the Pine Creek region of the Northern Territory should not be under-estimated according to exploration company, Thundelarra Exploration. Its Managing Director, Brett Lambert, told the conference the region had played host to uranium mining for nearly 60 years from the original Rum Jungle discovery.

However, parts of the district had not yielded discoveries until more recent times - including the company’s Thunderball prospect discovery in the Hayes Creek tenement area and which has since generated bonanza grades in the thousands of parts per million.

“Our recent work has found surface samples at Hayes Creek of up to 17% uranium oxide which is a very strong indicator value. It is difficult at times however to generate resource estimates as while the grades we encounter can be quite high, the mineralisation tends to be of a nuggety style.

“While this means a single deposit may not in itself be a standalone mine, nonetheless a number of small close proximity deposits can contribute to a single mining operation best able to service the mining of these nuggety deposits.

“It is our belief that the area remains lightly explored and that there is significant potential for further uranium discoveries, particularly in some of the major fault systems through the province.”

Thundelarra owns more than 3,500 km2 of tenements in the Pine Creek region, with a 50 km strike length extending to the north and south of the Thunderball discovery.