UNCLASSIFIED AAEC(SP)/NM 1972-2 AUSTRALIAN ATOMIC ENERGY COMMISSION HEAD OFFICE COOGEE URANIUM MINING INDUSTRY REVIEW 1971/72 S. A. SOUTH Issued Sydney, September, 1972 UNCLASSIFIED AUSTRALIAN ATOMIC ENERGY COMMISSION HEAD OFFICE COOGEE URANIUM MINING INDUSTRY REVIEW 1971/72 S. A. SOUTH HEAD, NUCLEAR MATERIALS SECTION ABSTRACT This is the second report in the series "Uranium Mining Industry Review" based on information received by the Nuclear Materials Section. Unless other-wise stated, costs shown are in US dollars. URANIUM MINING INDUSTRY REVIEW 1971/1972 by S.A. SOUTH HEAD, NUCLEAR MATERIALS SECTION This publication is a compilation of facts and figures on the current status of the domestic uranium mining industry at June 30, 1972 and covers as far as practicable, international developments occuring in 1971 and in the first half of 1972. These statistics are compiled annually for the use of Government and private enterprise. DOMESTIC REVIEW The Commission has special powers of control vested in it by the Atomic Energy Act 1953-66 and the Customs (Prohibited Exports) Regulations and, in order to discharge its responsibilities, the Commission must keep abreast of all developments in the uranium mining industry in Australia. Moreover, because of its background of continuning experience in the uranium mining and treatment industry, the Commission is able to assist the industry in all aspects of these operations. The nature and products of radioactive decay give rise to a number of problems which are unique to uranium and thorium mining and processing, The solution to these problems also requires experience and the use of extensive laboratory equipment not available at present in industry. The Commission has these facilities and undertakes such investigations, as a service to the mining and processing industries. Uranium exploration in Australia is at a record high, and intensive exploration was undertaken in a number of areas during the period under review, particularly in the Northern Territory and South Australia. At present, more than 80 companies are directly or indirectly involved in uranium exploration. The search for uranium has increased in recent years and important new discoveries have been made in Queensland, Northern Territory, South Australia and, more recently, in Western Australia. Although these resources are not yet delineated fully, it is clear that these additions to Australia's uranium reserves will, in due course, ensure that Australia will rank as one of the world's leading uranium producers. The deposits in the Northern Territory include some exceptionally high-grade ore, and the Alligator Rivers Uranium Field must be regarded as of major world importance. From the data available, with continued exploration, the prospects from discovery of further resources are most promising. At the present rate of exploration, reasonably assured resources in this area recoverable at less than US$10 per pound could exceed 100,000 short tons of uranium oxide (U^Og) within two years. Significant discoveries of relatively lower-grade sedimentary uranium ore have also been made in the Lake Frome Basin of South Australia, and further discoveries seem likely as exploration continues. Although a number of uranium discoveries have been made in Western Australia, it is too early to predict total reserves which will be proven in these new discoveries. This increased exploration took place within the framework of the Commonwealth Government's amended uranium export policy and has added upwards of 70,000 short tons of uranium oxide to Australia's reasonably assured resources within the cost range up to US$10 per pound. The more notable developments during the period under review are outlined below. The Rum Jungle treatment plant was closed in April, 1971 and at present there is no production of uranium ore concentrate in Australia. The treatment plant at Mary Kathleen has been kept on a care and maintenance basis since 1964 and the company intends modifying the plant and recommencing production by early 1975 with an annual capacity of about 1,000 short tons of UJ)g. GOVERNMENT EXPLORATION During the period under review, the Bureau of Mineral Resources (BMR) commenced a geological survey of the Alligator Rivers Uranium Field. This survey is expected to take three years and has a threefold objective: firstly, •• -> produce a detailed map of the geology of the region at 1:100,000 scale; * .condly, to investigate the genesis of the uranium and the lithological assocations of the mineralisation; and thirdty, to establish the relationship (if any) of the destribution of uranium ore to the unconformity between the older Lower Proterozoic rocks and the overlying Kombolgie Formation sediments of Carpentarian age. The newly discovered uranium deposits are localised in similar stratigraphic positions within metamorphic rocks of Lower Proterozoic age, near the base of chlorite-mica schists. The Lower Proterozoic rocks are overlain by a more or less horizontal, predominantly sandstone sequence - the Kombolgie Formation - which forms the Arnhem Land Plateau and the cliffs bounding it on the west. Field evidence obtained to date suggests that the uranium deposits were formed before the plateau sandstone was laid down. The proximity of the known uranium deposits to the Kombolgie Formation scarp is interpreted as being mainly due to the better exposures of the older rocks near the cliff faces: to the west the Lower Proterozoic rocks are blanketed by a deep cover of superficial deposits (including laterite) which adds immeasurably to the difficulty of discovering uranium deposits in such areas. Thus, methods used during the survey include mapping of exposed rock, stratigraphic drilling to establish the identity of rocks obscured by superficial deposits, and systematic levelling of the unconformity surface at the base of the Kombolgie Formation. In addition, a reconnaissance magnetometer and four-channel spectrometer survey of the Coburg peninsula, Alligator River and northern half of the Mount Evelyn 1:250,000 map-sheet areas was started in September, 1971 and will be resumed in the second half of 1972. Airborne radiometric surveys were completed in the Deaf Adder Creek and Jim Jim Creek reserves. The radiometric results indicated that no anomalous uranium is present. COMPANY EXPLORATION Queensland There was a marked decline in uranium exploration during the period. The areas of most active exploration were the Westmoreland and Mt. Isa- Cloncurry districts and, as in the previous year, the most active company in both areas was Queensland Mines Ltd. rr-—rr Mary Kathleen Uranium Ltd. The treatment plant and township at Mary Kathleen, Queensland, were kept on a care arid maintenance basis pending an improvement in the uranium market. Reconditioning of the plant and associated facilities is expected to begin in 1973, and the company intends recommencing production by early 1975 with an annual capacity of about 1,000 short tons of uranium oxide. No uranium exploration was carried out during the year and reserves stand unchanged at the previously announced figure of approximately 10,000 short tons uranium oxide. Sales contracts have been negotiated for the delivery of 3,887 short tons uranium oxide between 1974 and 1981, and negotiations are in progress for further contracts to enable the company to operate at full capacity. The Mary Kathleen orebody has a high rare earth content, and research was carried out during the year on a process for the economic extraction of rare earths in conjunction with uranium extraction. A pilot-plant was constructed to verify operating procedures developed in laboratory-scale tests, and to produce bulk samples for appraisal by potential buyers. The company announced that both the plant operation and the results obtained were satisfactory. * Queensland Mines Ltd. During 1971, the company continued its program of radiometric ground surveys and drilling in the vicinity of the Red Tree Dyke at Westmoreland. This program was designed to outline both the extent of secondary mineralisation and to test the small lenses of primary mineralisation in the fault blocks to the north and south of the shear zone. The company completed 22 diamond drill holes totalling 11,022 feet and 124 percussion holes totalling 17,495 feet. The company has announced that all its uranium reserves are being re-evaluated and re-appraised, and that revised reserve statements will be made after the results of this drilling program, together with data obtained from previous drill holes, have been evaluated. Although this re-evaluation will take some months to complete, the company has stated that a reduction in reserve tonnages is likely as •:/•• '.-st those previously published. Operations in the Mt. Isa area were curtailed to enable staff to concentrate on field activities in the Northern Territory. Field work in this area was limited to reconnaissance drilling on the Watta lease, and to a ground radiometric survey on the Pile lease. Northern Territory In the Northern Territory, the area of most active uranium exploration was in the newly-emergent Alligator Rivers Uranium Field where, despite the down-grading of the Nabarlek ore reserves, further additions to Australia1s uranium reserves were recorded. (See Fig. 1 for location map.) Peko Mines N.L./E.Z. Industries Peko Mines N.L. continued its joint exploration program with the Electrolytic Zinc Company of (A'asia) Ltd. (EZI) to evaluate the Ranger group of uranium anomalies some 130 miles east of Darwin. The Ranger 1 anomaly appears to be the more important of the Ranger group of anomalies and a detailed radiometric survey has revealed the presence of six areas of high radiometric intensity within this anomaly. The position of the anomalous areas within the Ranger 1 anomaly are shown in Fig. 2. The No. 1 anomaly area is the more important of these anomalies and the major drilling program to further delineate and evaluate the orebody - the Ranger 1 deposit - continued during the period under review. The Ranger 1 deposit is situated in the low foothills below Mt. Brockman at latitude 12° 42'S, longitude 132° 45'E. The central portion of this deposit has been pattern drilled on a 50 metre interval and 48 diamond drill holes and 22 percussion drill holes totalling 27,740 feet have been completed to date. A drilling program consisting of 9 diamond drill holes was also completed during the period on the No. 3 anomaly orebody, but the new information obtained is still not sufficient to re-assess the uranium resource beyond the tonnage nominated from the initial percussion drilling program. Drilling was carried out also on the No. 2, No. 4 and No. 5 anomaly areas, all of which constitute the Ranger 1 project. The mineralisation 6 encountered in the No. 5 anomaly is generally lower-grade and more patch}' than that in either the No. 1 or No. 3 anomalies. Testing of the No. 4 and 5 anomalies is at an early stage and has not been included in any estimates of the stated uranium resource. The Ranger 1 uranium resource is currently stated by the joint- venture partnership as follows: Orebody Contained U~Qo (metric tons) Anomaly No. 1 51,500 Anomaly No. 3 31,000 The Ranger 1 deposit is jointly and equally owned by Peko Mines N.L. and EZI as joint-venturers. A company - Ranger Uranium Mines Pty. Ltd. - has been formed to develop the deposit. This company is also jointly and equally owned by the joint-venture partnership. Economic feasibility studies on the Ranger 1 deposit are in progress, and the company expects to begin production of uranium concentrates about 1976. The joint-venture partnership is actively seeking sales contracts and reports considerable interest by utility corporations. The partnership announced recently that it had reached agreement in principle with two major Japanese utility corporations for the supply of a total of 3,300 short tons of uranium oxide for delivery between 1977 and 1986. The proposed treatment plant will have a designed capacity initially of 3,000 short tons uranium oxide a year, although factors are recognised which may change this planned rate before production begins. The partnership is undertaking uranium exploration on a joint-venture basis over a number of areas of good uranium potential in both the Northern Territory and Queensland. Queensland Mines Ltd. The company continued its intensive exploration program in both the Alligator Rivers Uranium Field and the Rum Jungle area during the 1971 field season. Several radiometric anomalies were examined in detail. Development drilling consisting of 109 diamond drill holes totalling 25,724 feet and 34 percussion holes totalling 2,613 feet was completed during the field season on the Nabarlek deposit, situated some 30 miles northeast of the Ranger 1 deposit. After revaluation of the results of this drilling program by both the company and an independent authority, the company announced that the Nabarlek ore reserves had been downgraded to 10,500 short tons uranium oxide indicated reserves, at an average grade of 47 lb. uranium oxide/ ton. Metallurgical investigations have shown that the Nabarlek ore is readily amenable to conventional treatment methods, and the company expects to begin production of uranium concentrates in 1975 at a rate of 1,200 short tons uranium oxide a year. Discussions were held with a number of possible buyers and, although a firm sales contract had not been concluded at the end of the period, the company had reached agreement in principle for the supply of 2,230 short tons uranium oxide for delivery between 1977 and 1985 to a Japanese utility corporation, and is seeking further sales contracts. A limited drilling program consisting of 29 diamond drill holes totalling 6,603 feet and 14 percussion holes totalling 2,206 feet to test for the continuation of surface mineralisation at depth, was undertaken on the Caramel, Beatrice, Gorrunghar and Mordigimuk prospects. A complex zone of primary uranium mineralisation was encountered at the Caramel prospect, but drilling failed to locate significant mineralisation at depth at the other three prospects. The mineralisation at Caramel appears to dip under the massive sandstone plateau of the Kombolgie Formation which is up to 200 feet thick in this vicinity, and will considerably hamper further evaluation. A detailed examination of the geological setting is being undertaken as a prelude to further drilling of this prospect, the exploitation of which may have to be carried out by underground mining. The nature and significance of the uranium occurrences at Beatrice, Gorrunghar and Mordigimuk have yet to be determined. Exploration in the company's southern exploration area is severely restricted by a thick sandstone cover over most of the region. Airborne reconnaissance and follow-up ground radiometric surveys carried out in the area failed to locate any significant anomalies. The company is also undertaking a joint exploration program with 8 Australian Aquitane Petroleum Pty. Ltd. in the Rum Jungle area. Three occurrences of uranium mineralisation were located as a result of ground radiometric surveys and extensive auger drilling and soil sampling programs. Three diamond drill holes totalling 614 feet were complete! to test these occurrences. The results indicate that the surface mineralisation does not persist at depth. Noranda Australia Ltd. This company has carried out an intensive uranium exploration program in the Jim Jim area during the past two years and, during the period under review, continued its major di .tiling program to evaluate what appears to be another significant uranium deposit in the Alligator Rivers Uranium Field - the Koongarra deposit - situated some 12 miles south-southwest of the Ranger 1 deposit. A program of diamond and percussion drilling to further define and evaluate this orebody has continued, and 47 diamond drill holes totalling 17,625 feet and 66 percussion drill holes totalling 13,809 feet have been completed to date. The company plans to conduct a further drilling program during the next twelve months in ordev to delineate the orebody and estimates that production will not begin before 1976. Further mineralisation has been discovered some five miles to the northeast of the Koongarra deposit. Nine diamond drill holes totalling 2,904 feet and 14 percussion holes totalling 1,736 feet have been drilled to test this prospect. In addition, one diamond drill hole totalling 247 feet and 21 percussion drill holes totalling 2,116 feet have been drilled to test other prospects within the Jim Jim area. The company is also participating in joint uranium exploration ventures in other areas in the Northern Territory. Pancontinental Mining Ltd. This company, which is the operator in a joint-venture with Getty Oil Company, continued its uranium exploration program in the East Alligator River area north of the Ranger 1 deposit. A number of radiometric anomalies have been located as a result of this exploration program, and a preliminary drilling program to test and evaluate these anomalies is in progress. During the period 19 diamond drill holes totalling 6,500 feet had been completed on the 7E anomaly. Drilling continued throughout the "Wet" season and this was made possible through the mobility of three all-terrain vehicles, capable of moving through 3 feet of mud and water, to transport diamond drilling equipment and personnel. An extensive drilling program, involving six drilling rigs, will be undertaken during the current field season. This will involve further delineation of the mineralisation at 7E; testing the remaining anomalies at depth; and further reconnaissance by shallow percussion drilling. South Australia Uranium exploration in South Australia was maintained at the previous year's level. Almost all areas favourable for the formation of sedimentary uranium deposits were under intensive exploration during the year, with special attention being given by companies to the Lake Frome Basin. Petromin N.L. This company, in conjunction with Exoil N.L.-Transoil N.L., continued a major drilling program to evaluate what appear to be significant sedimentary uranium deposits in the Lake Frome area. Three orebodies have been discovered to date in this area by follow- up drilling, and the company announced late in 1971 that inferred reserves of 12,500 short tons uranium oxide have been outlined by drilling on the Beverley and associated prospects. The Minad-Teton Group has drilled 59 exploratory holes totalling 35,313 feet in the area to the north of the Beverley series of prospects. Limited sections of anomalous radioactivity have been intersected in eight of the holes drilled to date. The Petromin-Exoil-Transoil group was granted a further 800 square .../10 10 mile area in the vicinity of Lake Frome during the period under review. Exploration is expected to begin shortly on this lease. Sedimentary Uranium N.L. The company continued its active uranium exploration and drilling program over a number of leases in the Lake Frome Embayment north of Radium Hill during the period under review. Since the initial discovery hole in the Yarramba area, towards the end of 1971, the company has completed an additional 36 percussion drill holes bringing the total of drill holes completed in the discovery area to 66. This includes four core holes. Intermittent mineralisation of varying grade has been intersected in Tertiary sands on the eastern bank of a buried stream channel. The mineralisation has been shown to exist over a minimum strike length of 2,500 feet and width ranging from 150-200 feet as a result of the drilling program. The uranium potential of the western bank of the stream channel has not been tested to date. Preliminary metallurgical tests show that the mineralisation is amenable to conventional acid leaching and exploration is continuing to enable the potential of this area to be assessed. Exploration drilling was carried out on the company1s other leases in the area, but their potential for sedimentary uranium deposits does not look promising because of the shallow basement. Western Australia The year saw a marked increase in the tempo of uranium exploration in Western Australia and almost all favourable areas for uranium were under intensive exploration. Although uranium occurrences were reported from a number of areas of the State during the period, the discovery at Yeelirrie represents the first major uranium discovery in Western Australia. High-grade uranium mineralisation in conjunction with copper mineralisation was reported from the Mundong Wells area near Carnarvon, but very little information is available on this discovery. 11 Western Mining Corporation Ltd. The company has been exploring for uranium orebodies over a number of years. In January 1972, it announced that significant uranium mineralisation had been found over an extensive area near Yeelirrie, some 410 miles northeast of Perth. Initial exploration indicates that the uranium occurs mainly as the mineral carnotite, which has precipitated in old drainage or river channels. Average grades of about 3 lb. uranium oxide per long ton, with areas of higher- grade material, have been indicated by drilling,, The deposits appear to be extensive, mainly flat-lying and suitable for opencut mining. Insufficient work has been done to allow assessment of total ore reserves and grades. However, the company expects this information should begin to be available about the end of 1972. Laboratory work has shown that the uranium is readily and economically extractable by conventional alkaline leaching. Pilot plant testing has been undertaken on bulk samples of ore. Other States Although some uranium prospecting was carried out in New South Wales and Tasmania during the period, no significant uranium mineralisation was discovered. PRODUCTION Although there were five uranium mills in operation in the heyday of the last boom period, continuous production of uranium chemical concentrates in Australia has been confined to the Commonwealth-owned mill at Rum Jungle, N.T. since the mid-I960's. Two mills were abandoned after fulfilling their sales contracts; one was modified for the treatment of base metals and another has been kept on a care and maintenance basis since the mid-sixties. Since January, 1969 below-ore-grade uranium-bearing material, which was stockpiled when the Rum Jungle Creek South and Dyson1 s orebodies were mined, has been blended with normal-grade ore and treated in the plant. The uranium produced has been stockpiled. The Rum Jungle treatment plant was closed in April, 1971 in .../12 12 accordance with Government policy and dismantled. The treatment plant and other assets were sold by public auction, and the township of Batchelor was passed over by the Commission as a going concern to the Department of the Interior in November, 1971 and it is now maintained as an open town by the Administration. . Thus, since the close-down of the Commission's mill at Rum Jungle, there is no current operating mill in Australia and this lack of milling capacity is likely to exist until either new mills are constructed to exploit the new discoveries in either the Northern Territory, Queensland or South Australia; or until the Mary Kathleen mill is recommissioned. RESERVES Australia's estimated uranium resources at June 30, 1972 are shown in Table 1. TABLE 1: URANIUM RESOURCES (103 short tons U-Og) AREA QUEENSLAND NORTHERN TERRITORY SOUTH AUSTRALIA TOTAL GEOLOGICAL RESERVES (Measured & indicated) 33-9 112.5 20.5 166.9 REASONABLY ASSURED RESOURCES (Recoverable at less than US$10 per Ib.) 16.0 71.0 5.0 92.0 It should be noted that these figures do not allow for resources known to exist in the Rum Jungle area which, in the absence of a treatment plant, must now be considered un- economic; nor does it include allowances for uranium recovered by heap-leaching, or as a by-product of treatment of other mineral deposits such as phosphates, fluorite, vanadium and/or copper. .../13 13 OVERSEAS DEVELOPMENTS World uranium exploration during 1971 declined almost everywhere except in Australia, as continued over-production and intense competition combined to force uranium prices to a record low. Although increases in uranium reserves were recorded in a number of countries during the period under review, unless there is an early reversal in this trend to reduced exploration activity, future additions to reserves will not be forthcoming in time to meet the predicted requirements during the early 1980's. Depending upon the level of demand, supply and demand outside the USA could be in balance by 1980-8.1. However, if the USA market is opened to foreign producers, this situation could occur about 1978 and a shortage of uranium could then develop towards the end of the decade unless the current downwards exploration trend is reversed. Estimates of installed nuclear generating capacity are used as a guide to determine future uranium requirements. Based on predictions made in February, 1972 of 165,000 MW for the USA and 308,000 MW for the Western World by 1980, a total of 79*000 short tons of uranium oxide a year will be required by 1980 to attain this level of nuclear power generation. Of this quantity, 42,000 short tons of uranium oxide a year will be required by the USA alone. These estimated annual requirements are based on the assumption that plutonium recycle will be employed beginning about the mid-1970's. However, if plutonium is not recycled, the projected uranium requirements would be about ten percent higher by 1980. The total present Western World reasonably assured reserves recover- able at less than US$10 per pound have been estimated at 1,059,000 short tons uranium oxide, and should be compared with estimated cumulative requirements for the period 1970-80 of 437*000 short tons uranium oxide, and an estimated annual demand of 200,000 short tons uranium oxide by 1990. It should be noted that this latter figure is almost ten times the Western World's present production. When considering short-term production of uranium in relation to consumption, existing stockpiles should be taken into account. Government stockpiles in the USA, Canada, Britain, France, South Africa and Australia at present amount to about 100,000 short tons of uranium oxide. Although additions can be expected to the overall stockpile during the next five or .../14 14 six years, several countries already have announced plans for disposal of their stockpiles. An eight-year forward reserve is considered adequate to enable the uranium mining industry to meet anticipated requirements, and thus net annual additions to world reserves must approach 150,000 short tons uranium oxide within ten years to ensure that sufficient forward reserves are maintained. The current decline in exploration is in direct contrast with these longer- term requirements, and it is clear that the level of exploration must increase significantly to meet projected uranium requirements. The price of uranium has fallen over the past few years due to a variety of factors, the major one being that production has exceeded estimated demand because of a shortfall in the growth of nuclear power. U.S.A. During 1971, uranium exploration activity in the USA continued at a reduced level. The United States Atomic Energy Commission (USAEC) estimated that surface drilling would fall from 23.5 million feet in 1970 to about 15 million feet in 1971, but despite this cutback in drilling activity there was a significant increase in uranium reserves during 1971. Domestic uranium reserves in the category "less than $10 per pound" were estimated at the end of 1971 at 300,000 short tons uranium oxide, and reserves available at a price of $8 per pound were estimated at 246,000 short tons uranium oxide. Uranium producing companies in the United States have now contracted to supply a total of 108,600 tons of uranium oxide to domestic buyers and 6,300 tons of uranium oxide to foreign buyers. Deliveries are spread over a number of years through to 1988, but the major part of these orders will be filled by 1976. Orders for deliveries during 1971 were about 14,000 tons, whereas the current domestic processing capacity is about 15,000 - 16,000 tons U«0g annually and is expected to reach approximately 19,000 tons U«0r> annually by the end of 1972. Because of current soft market conditions, the USAEC announced its intention to postpone removal of its embargo on the enrichment of foreign .•./IS 15 uranium for domestic use until the latter part of the decade, to protect the United States uranium mining and milling industry. It also announced that it would commence disposal in 1972 of the 50,000 ton uranium oxide surplus civilian stockpile by increasing the "tails" assay from US enrichment plants from 0.2$ to 0.3$. This will increase the productive capacity of tL. enrichment plants and thereby defer the need for construction of an additional enrichment plant by approximately one year. Eighteen uranium milling plants were in operation during 1971 and two new mills with a total nominal capacity of 3,750 tons of ore per day are scheduled for completion during 1972. CANADA The decline in uranium exploration was not unique to the USA. Exploration in Canada also continued at a reduced level, and almost no new prospecting was reported during 1971. Although this decline can be largely attributed to the current soft market outlook, the final outcome of the Federal Government's requirements concerning foreign ownership of uranium properties and resources was also a contributing factor, and exploration is not expected to increase until these questions have been resolved. Canadian production of uranium oxide in 1971 rose slightly to 4,976 short tons. This production from three mines was more than sufficient to meet contract commitments, and the excess was held in government or company stockpiles. Although the Canadian Government's uranium procurement program was terminated on 30 June 1970, a new stockpiling agreement was made between the Federal Government and Denison Mines Ltd. covering the period 1971 to 1974 to ensure that a stable economy is maintained in the Elliot Lake area until the company' s long-term sales contract deliveries enable it to operate at full capacity. Under this agreement, the company will deliver 1,000 short tons of uranium oxide annually to the stockpile during 1971 to 1973 inclusive, and up to 233 short tons of uranium oxide during 1974. The Federal Government will pay the company about US$4.65 per pound uranium oxide and the assumed value of the uranium oxide is US$6 per pound. During the stockpiling period, .. ./16 16 the company will have the option of meeting new contracts from either mine production or the stockpile. However, in the former case, deliveries to the stockpile would be decreased by a corresponding amount. After December 1974, mine production will not be increased until both the joint-venture stockpile and the company inventory have been depleted; as all new sales after this period must be serviced on a pro rata basis from these two sources. The agreement also stipulates that, upon sale of the stockpiled material and recovery of all associated costs, net revenues will be shared pro rata up to the amount of the respective contributions, and net revenues then remaining will be shared equally. The company began deliveries to this stockpile in mid-1971, and recently announced the sale of 6,467,000 pounds of uranium oxide to Spain. The Rabbit Lake project in northern Saskatchewan, operated by Gulf Minerals Canada Ltd., proceeded on schedule. Plant construction began and production is expected to commence in early 1975 at a throughput of 2,000 tons of ore per day. SOUTH AFRICA Uranium production in South Africa in 1971 remained at about 4,000 short tons of uranium oxide. The South African Atomic Energy Board announced that reasonably assured resources in the category "less than $10 per Ib" ha.d been increased from 200,000 short tons uranium oxide to 300,000 short tons (this latter figure includes approximately 100,000 short tons of uranium oxide from South-West Africa). This increase has resulted from new discoveries in both the Republic of South Africa and South-West Africa, as well as from higher « treatment plant recoveries and improved extraction processes. Because of the depressed world market price, South Africa1s only primary uranium producer announced in April 1972 that it intended to cease uranium production until the market improved. However, because all other uranium production in the Republic is a by-product of gold production, the recent world increases in the price of gold will ensure that the South African uranium industry will continue economic production despite the dampening effects exerted on other producing countries by the current world uranium prices. ...A7 17 The Rossing project in South-West Africa is proceeding on schedule and production is expected to start in 1975. FRANCE Production in Metropolitan France during 1971 was approximately 1,800 short tons uranium oxide from three treatment plants which have a combined nominal capacity of 2,300 short tons uranium oxide per year. Reasonably assured resources in the less than US$10 per pound category were estimated at 45,000 short tons uranium oxide. Moreover, it has been estimated that there are about 50,000 short tons uranium oxide of reasonably assured resources in the $10 per pound price category under French control in the Central African Republic, Gabon and Niger. Production in France and Gabon, together with French-controlled plants to be set up in Niger, will amount to approximately 3*300 short tons uranium oxide in 1975-76. In addition to exploration activities in Metropolitan France and Africa, the French Atomic Energy Commission (CEA) is undertaking uranium exploration in a number of countries including Australia, Indonesia and the USA. OTHER COUNTRIES Uranium production continued in several other countries and it is estimated that the total Western World production in 1971 was of the order of 26,000 short tons U«0g and modest additions to reserves were made in several countries during the period under review. FACTORS INFLUENCING WORLD DEMAND In the short term, the factors which will influence the demand for uranium are variations in the forecast growth of nuclear power, the uranium 235 content in the depleted uranium tails rejected from enrichment plants, and the extent to which plutonium is recycled in reactor fuel elements. If the tails from enrichment plants have a higher uranium 235 content, more uranium oxide must be produced and processed to provide a given quantity of enriched fuel for power reactors. Plutonium recycle will reduce the amount of uranium oxide needed to supply new reactor fuel and it has been assumed .../18 that plutonium recycle will begin in light water reactors from 1975, and in heavy water reactors from 1950. Other factors which must be taken into account when estimating the short-term demand for uranium and the likely available market are: (i) The US embargo on imports of foreign uranium for domestic consumption. (With the US embargo likely to continue until about the end of the 1970's, and the possibility then of of only a partial relaxation, Australian uranium producers can look only to Western Europe and Japan for exports). (ii) The supply by US nuclear reactor manufacturers of fuel related to reactor sales. (iii) The role of France in the world market. (France has an excess production over domestic requirements and it is likely that France will supply uranium to Switzerland, Belgium and Italy). (iv) The United Kingdom1s uranium requirements. (The UK has contracts for its uranium requirements up to 1984). In addition, there are other factors which will affect the demand for uranium in the future, and which cannot accurately be predicted at present. These include: (i) Releases from government stockpiles. (ii) The introduction of commercial fast breeder reactors (FBR's). (The introduction of the FBR will probably lead to a reduction in the rate of increase in demand but the magnitude of this reduction will depend on the economic and breeding performance of the FBR. This factor will remain difficult to predict until the late 1970's, by which time experience will have been gained with prototypes). (iii) Depleted uranium being recycled successfully in gas-cooled graphite-moderated reactors. (iv) The enrichment of depleted uranium (the USSR has offered to enrich depleted uranium and France has sent material to the USSR for trial). .../19 19 (v) Supplies of enriched uranium being offered by the USSR to the Western World (the USSR is known to have significant unused enrichment capacity, and the offer of enriched uranium or of toll enrichment cannot be discounted). (vi) In the future, major consumers can be expected to develop their own captive supplies of uranium. The uncommitted world market for uranium is estimated to be about 12,000 short tons of oxide between now and the end of 1977, and probably an additional 45,000 short tons in the three-year period 1978-80. Since the total Australian domestic demand is unlikely to exceed between 2,000 and 3,000 short tons of uranium oxide up to 1990 for the country1s expected nuclear power program, export can be expected to become the mainstay of our local uranium mining industry. Thus, future Australian production, especially in the period 1978-80, will be competing for a share of the world market against well-established overseas organisations, some of which have government backing. -JHf ©NIMBUWAH OENPELLI MISSION QUEENSLAND MINES LTD. (NABARLEK) CAHILLS CROSSING PANCONTINENTAL MUDGINBARRY STATION RANGER URANIUM f ^NOURLANGE TsioRANDA AUSTRALIA LTD. FIGURE 1. ALLIGATOR RIVERS URANIUM FIELD SHOWING POSITION OF THE MAJOR URANIUM DEPOSITS ANOMALY ANOMALY \N°-3 ANOMALY N°'1 ANOMALY N*5 TOTAL COUNT GAMMA RAY CONTOURS. (COUNT PER SECOND NOMALY N*2 FIGURE 2. THE RANGER 1 RADIOMETRIC ANOMALY FIGURE 3 WESTERN WORLD URANIUM RESOURCES (REASONABLY ASSURED RESOURCES @ $10 PER POUND U308) SHORTONS U30g $f|| 1,000-5,000 Vi'«y 5,000 - 25,000 25.000-100,000 200,000 OR MORE •*•***)» #*•«..* «*»«•»..». *_»•?"• HARTS RANGE ALICE "SPRINGS 'BRISBANE QCARPENTAMAN ROCKS • MAJOR OCCURRENCES • MINOR OCCURRENCES FIGURE 4. DISTRIBUTION OF THE MAIN URANIUM OCCURRENCES IN A U S T R A L I A