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« Aurora Energy Resources Inc: Update | Main | Uranium Stocks on the move »
Thursday
Oct042007

Olympic Dam: More uranium!

The Sydney Morning Herald 04oct07

In an article carried by The Sydney Morning Herald BHP Billiton has announced plans to expand Olympic Dam's copper production to 500,000 tonnes a year at their Olympic Dam mine. However rumour has it that an increase in copper production to 1 million tonnes a year is possible with a by-product of about 30,000 tonnes a year of uranium production.

This raises the question of cost effectiveness for other budding uranium miners bearing in mind that the Olympic Dam project is producing uranium as a by-product of copper mining. The article goes on to say that an output of 30,000 tonnes per annum would represent more than 40 per cent of global demand. In terms of time frame this expansion is not expected to come on line until 2010.

The article also points out that other uranium miners such as “Paladin Resources predicts cash costs of $US23 a pound over the life of its Langer Heinrich mine in Namibia, and some of the other Australian uranium hopefuls could have even higher cash costs.”

This is something we need to bear in mind when doing a SWOT analysis and should be well and truly placed under the Threats section.

If you wish to read this article in full please click this LINK.

Have a good one

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Reader Comments (4)

BHP is too well run a company to flood the world with any product, much less uranium. Once production is ramped up at Olympic Dam (many years away yet) BHP will have planned to supply their products in a way that will guarantee income into the distant future. The Chinese have had a number of delegations to Olympic Dam already to ensure that they will be able to supply there planned reactors for many years to come. Russia and India have also recently been given approval to buy Australian Uranium. These countries will want to ensure there supply of uranium and want to buy uranium from politicaly stable countries such as Australia and Canada.

The major producer of uranium in Australia at the moment is ERA (Ranger mine), seconded by BHP (Olympic Dam). Paladin which is an Australian company does not produce uranium in Australia. The potential mine sites they have in Australia are in states that do not as yet allow uranium mining. Once these states do allow uranium mining(could be decades before they do) it will take many years and a lot of money to get them up and running. It may even be possible that in the future it may not be economically viable to mine these sites. Paladins current operation is in Namibia which has a bit much potitical unrest for my liking.

Other junior Australian Uranium miners make headlines when there share prices double. Most of these companies only hold a lease for exploration and may never even put down a drill hole.

Others that do drill will probably find that there deposits are not economically viable. Very few will ever come to production.

If you want to speculate in penny stocks there will be plenty of uranium miners that will come and go. Those people that make short term gains and get out will make money. There will however be many people that lose money on Uranium hopefuls.

When investing in uranium stocks we must keep in mind that it takes many years to get a mine up and running, not to mention tens of millions of dollars.

If you want to invest serious money directly in Uranium stocks in Australia the first choice would be ERA followed by Paladin. BHP and Rio Tinto (which owns 70% of ERA) are other ways to expose yourself to the uranium market.

October 4, 2007 | Unregistered CommenterJames Baldwin

ERROR IN THE YEAR IN YOUR COMMENTS....You said 2010 and the snip from the article (below) implies 2014 at the earliest (A MAJOR DIFFERENCE)...and 30,000 tons is TOTAL U Production IF they double the expansion, which is a 25,000 ton increase from today.

"The marketing team would target long-term sales contracts with baseload power providers, he added. The Olympic Dam expansion is not expected to be completed until at least 2014.

ABN Amro analyst, Warren Edney, said the uranium market should be able to cope with an extra 25,000 tonnes a year of production at that point. The World Nuclear Association estimates global demand will increase by up to 100,000 tonnes a year by 2015."

October 4, 2007 | Unregistered CommenterDenis Saloman

Good comments - Thanks.

October 6, 2007 | Unregistered CommenterUranium Stocks

ERROR IN THE YEAR IN YOUR COMMENTS….You said 2010 and the snip from the article (below) implies 2014 at the earliest (A MAJOR DIFFERENCE)…and 30,000 tons is TOTAL U Production IF they double the expansion, which is a 25,000 ton increase from today.

“The marketing team would target long-term sales contracts with baseload power providers, he added. The Olympic Dam expansion is not expected to be completed until at least 2014.

ABN Amro analyst, Warren Edney, said the uranium market should be able to cope with an extra 25,000 tonnes a year of production at that point. The World Nuclear Association estimates global demand will increase by up to 100,000 tonnes a year by 2015.”

June 11, 2009 | Unregistered CommenterDenis Saloman

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