Western Australia’s first new uranium mine is likely to be delayed due to the ongoing downturn in demand and prices.
Toro Energy has pushed back the start date for its Wiluna uranium project while it waits for market conditions to improve. The company began drilling at the project in 2014 and had expected to start operations in 2017.
“We will get to build Wiluna when we get the price that makes Wiluna economic. We are not seeing that price today,” managing director Vanessa Guthrie told AAP.
Wiluna, 960 kilometres northeast of Perth, is the first new uranium mine in WA to receive federal government approval since the lifting of a ban on uranium mining in 2008.
The project will require prices between $60 and $70 a pound to make money, Dr Guthrie said.
Long term uranium prices currently hover around $45 per pound, almost half the levels of five years ago. Prices are expected to dip further because of large stockpiles.
Global uranium production has stalled in the past two years as depressed uranium prices have curtailed exploration activities and the opening of new mines.
Production at Wiluna is now likely start between 2018 and 2020.
Toro is looking for equity partners in the mine, and has been in early talks with Indian and Chinese investors, Dr Guthrie said.
She remains confident in the fundamentals of the uranium mining sector over the longer term, with demand for nuclear power expected to come from the growing economies of China and India.
“There is not enough supply coming into the market that will meet demand in 2025. You will have a shortfall of 20-30 million pounds every year from about 2018 onwards,” Dr Guthrie said.
The World Nuclear Association has said global nuclear power generation capacity could increase by more than 45 per cent in the next 20 years.
Mining giant BHP Billiton said this week it expects uranium would be the biggest winner in its portfolio, as the world comes under pressure to cut carbon emissions and limit global warming to two degrees celsius.
Australia holds the largest share of uranium resources globally.
The ongoing South Australian royal commission into the nuclear fuel cycle is an important opportunity for Australia to review its contribution towards development of nuclear power, Dr Guthrie told mining industry executives in Sydney.