- Department of Mines gives license for mining of uranium
- Australian mining entity developing the mine targets recovery in uranium market
A-cap Resources Ltd, the Australian company with mining projects in this country is looking forward to open the first uranium mine at Gojwane cattle post in the Central District.
In its 2016 annual report released this week, the outfit listed in the local bourse and Australian Stock Exchange, indicated that studies conducted since the beginning of this year, show positive economics for the project.
“Studies have confirmed that the project has the right mix of good resource, low capital and operating costs and is well positioned to be taken into early production, reaping the benefits of projected shortfalls in supply in the uranium market and predicted rising uranium prices,” notes the report. The report estimates that the company needs around P3.5 billion to construct the mine and P450 million to operate the mine for 18 years. The report has indicated with the projected recovery in uranium prices, that the mine could generate revenues amounting to P34 billion during the 18 year mine life. According to A-cap the project is expected to provide an economic boost to the Central region and benefit near-by communities. It is estimated that during construction of the mine 800 temporary jobs could be created, with 450 jobs created during the operation of the mine.
A-cap board Chairperson Angang Shen is optimistic that after being granted a mining license last month, strategy and pathway to production is clear and the company is looking forward to completing the pre-feasibility study for the project. “Upon completion of the pre-feasibility study, the board will reach a decision point to consider listing on the Hong Kong Stock Exchange early 2018 and complete feasibility studies and move the project to construction and production early 2020,” he said.
Shen noted that management has mapped out the feasibility work required to take advantage of a forecast rise in uranium prices. He said whilst the uranium market is currently in a state of oversupply, with spot uranium prices putting pressure on producers, forecasts in the longer term point towards improved uranium prices. “With the delay in the restart of Japanese nuclear reactors, the uranium market remains in a state of oversupply, resulting in spot prices of uranium remaining low. Looking forward towards 2020, the inevitable restart of Japanese reactors will result in the consumption of current stockpiles,” he said.
He noted that as of September 2016, the World Nuclear Associations reported that 59 nuclear reactors are currently under construction, 168 are planned, with a further 345 reactors proposed. “Leading the way in nuclear demand is China, which accounts for 35 percent of total number aforementioned reactors. Furthermore, India recently ratified new nuclear liability legislation which will clear the way for an uplift in nuclear reactor investment in the country. With the forecast reactor built, restart of Japanese reactors and depletion of current stockpiles, uranium prices will increase,” said Shen.
The Company CEO Paul Thomson added that utilities could run short of uranium with effect from 2017. He said roughly 11 percent of 2017 demand remains uncovered, 22 percent in 2018, 27 percent in 2019, and nearly half of global requirements in 2020. “With the expected uranium deficit and recovery in the uranium market in the next 4 years, the future looks bright for the envisaged mine,” he said.
Thomson added that global environmental factors also favor the project which is expected to supply nuclear power stations with uranium. “On a global scale countries continue to call for carbon reduction and we believe that nuclear energy is clearly the solution. The UK recently set new targets for cutting UK carbon emissions, with the aim of reducing emissions in 2030 to around a third below the current levels. In the US 63 percent of the country’s carbon free energy is derived from nuclear plants and meeting new greenhouse gas limits without nuclear energy would be a difficult proposition,” he said.