Toro Energy’s Four Mile uranium project in South Australia was approved this month and has the potential to begin production within a year to 18 months according to a report from AAP published via Special Broadcasting Service.
Located 550km north of Adelaide, Four Mile is a joint venture between Quasar Resources (75%) and Alliance Resources (25%). The project is in addition to the company’s Western Australia uranium mine, the country’s fifth, approved in April.
Toro Managing Director Vanessa Guthrie said she can see Australia overtaking Kazakhstan and Canada as the world’s largest producer especially after two major shifts in the uranium space.
The country’s major political parties no longer oppose uranium mining.
The 2011 Fukushima nuclear disaster led to Japan wiping out 12% of global demand by shutting all of its reactors however emerging economies led by China, India and Russia provide a new demand traditionally dominated by the US and France.
“While the market has been flatter and sluggish for longer than we would have loved, the fact is that on the horizon we can all see increasing demand and at some point in the next five years a crossover and shortage of supply,” Dr Guthrie told AAP.
According to AAP, this week’s spot prices of about $35 a pound are arguably half the price needed to make a decent profit.
MineLife senior resources analyst Gavin Wendt says people should ignore the price. Junior miners are still exploring and trying to develop projects in Australia. Wendt said the new demand will come from governments from emerging economies that did not want to rely on any one energy source, such as coal.
China plans to increase the proportion of nuclear in their energy mix from 2% today to 16% by 2030.
India is similarly spending billions of dollars on energy security and plans to buy uranium from Australia, while Russia has nearly run out of enriched uranium from former Soviet warheads.
The risk, however, is whether East Asian nations will prefer natural gas.
Meanwhile, Toro Energy must find an equity partner to help fund building its $269 million, 1.7 million pound a year mine, ideally to be up and running by the end of 2016.
Dr Guthrie says they will only go ahead if the uranium market recovers, but adds that a slowdown in the resources sector has been welcomed to bring down contractors’ costs.