The big hole
By John Busby   
13 February 2007

There are now many countries, including the UK, intending to build a new fleet of nuclear power plants, to replace those nearing the end of their operating lives or to expand their current fleet. After many years of doing little, the world is invited by a nuclear lobby to embrace a "nuclear renaissance". 

 

It claims that nuclear power is characterised by

  • zero or extremely low carbon emissions and
  • that it offers security of electrical supply.

Both claims are bogus; carbon dioxide is emitted from every element of the nuclear fuel cycle except the actual fission in the reactor and the world is running out of its fuel, uranium; a reality the lobby fails to embrace.

Lots of uranium?

The interest in nuclear generation by so many nations has been engendered by a panic. This was caused by

  • the momentary turning off of the gas through Ukraine and
  • the oil through Belarus by Putin's Russia.

The panic is warranted, as Russia consumes internally 70% of its natural gas production and with economic growth from a low base, it will soon need all of its gas and probably all of its oil for itself. Its neighbour, China, will take up any surplus oil and as OPEC throttles its production to maintain a crude oil price hike, the rest of the world knocks at the door of the Kremlin, where President Putin is regaining state control of Russian energy assets.

But is there a plentiful supply of uranium to fuel the world's existing  fleet of reactors, the needed replacements and an expanded nuclear sector?  The industry claims that after the currently mined uranium ores of a commercial grade have been exhausted, the earth's crust, hypothetically, possesses an adequate supply of very low concentrations to provide sustainable energy for decades.

It is also claimed that once the uranium is gone, even though there is plenty, the introduction of breeder reactors in association with chemical processing and plutonium fuel manufacture would extend the life of nuclear power for centuries. That this claim can be dismissed is the subject of another's work. [1]

The claimed low carbon emissions and the potential for the alleviation of climate change by the expansion of nuclear power are subject to dispute.  Even if it were carbon free, the contribution of nuclear power to global energy demand is so trivial (at 6% of primary thermal energy or 2% as electrical energy) that its current contribution to a reduction in carbon emissions is negligible. Worse still, the extraction of uranium from ultra low ore grades would require the processing of inversely larger quantities of material so that the mining and milling energy input together with the energy inputs in the subsequent fuel nuclear fuel cycle exceeds that derived from it. The claim of the nuclear lobby, that there is an abundance of available uranium in the earth's crust, is an attempt to persuade gullible politicians that nuclear energy has a future against a background of falling primary mining production.

 

source: uic.com.au 

Two countries supply half of the currently mined uranium: Canada and Australia. Canada possesses extremely rich ores and has historically produced the most uranium from a succession of mines. Each one has built up its production, which has levelled off and then declined until the mine is closed. The initiation of the latest in the series, Cigar Lake, has been delayed due to flooding. This may well mean that the overall Canadian production in 2007 will be lower than in 2006.Australia claims to have the largest uranium reserves and aims to be the world's biggest producer. Indeed, some believe it should build its own fleet of nuclear stations, whereas at the moment it has only a pilot reactor. World attention focuses on the Olympic Dam mine expansion in South Australia, which is the subject of a feasibility study by its owners, BHP Billiton.

Australia's uranium mines

There are three operating mines in Australia, Ranger in the Northern Territory, Olympic Dam and Beverley in South Australia. A fourth, Honeymoon, is about to start production in South Australia. [2]

 

Ranger produced the most uranium up until 2004-5 when it peaked at 4,700 tonnes (5,544 tonnes U3O8), but mining is scheduled to be closed at the end of 2008. The managing company ERA is 68% owned by Rio Tinto which judges the economics of its mines by the "head cut-off grade", by which is meant the grade of the ore presented for milling after much of the waste rock has been separated. Below this grade the mine is deemed to be uneconomic. Recent uranium price rises allowed Rio Tinto to revise the Ranger head cut-off grade down from 0.12% to 0.08%, which will allow the processing of ore stocks and tailings to continue until 2014. [3]

Nearby Jabiluka mine is under "care and maintenance" and will not re-open without permission from its traditional owners.

The second biggest producer, Olympic Dam, is an underground mine, from which uranium is a co-product with copper, silver and gold. Its uranium production also peaked in 2004-5 at 3,690 tonnes (4,356 tonnes U3O8) and is now set in a rapid decline. In 2006 production was reduced to 2,877 tonnes (3,393 tonnes U3O8). Because of this, the owners, BHP Billiton, have launched a pre-feasibility study into its expansion as an open pit mine.

 

Beverley is an in-situ leaching operation in which chemicals are injected into the ground to dissolve the uranium in the orebody. The uranium is then stripped from the solution by an ion-exchange process and the residual liquid returned underground. Production at Beverley passed its peak in 2004-5 at 900 tonnes (1,064 tonnes U3O8).

source: bhpbilliton.comIt is clear from a rudimentary study of the production figures that Australian uranium production will continue to stagnate unless and until the Olympic Dam project (scheduled to start in 2014) passes its feasibility study and goes ahead.

The Olympic Dam expansion

Since Olympic Dam underground mine is on the downward slope of its Hubbert production "bell-curve", its previous owners, WMC, began to study the potential to expand into an open pit. Prospects of expanding its production to 500,000 tonnes of copper and 15,000 tonnes of uranium oxide per annum attracted the attention of BHP Billiton and it became the new owner. The company is engaged in a serious and expensive feasibility study to support (or otherwise drop) the massive investment in mine development and infrastructure required. [4]

Unfortunately the project has caught the attention of the politicians who have already promised some of its output to China and India, to the possible detriment of the Australian uranium's customers in the US, Europe, Korea and Japan. A final result of the feasibility is not expected until 2009, followed by 4 years of mine development, until production can begin in 2014. If the company then declines to proceed, it will be under enormous political pressure, nationally and internationally to nevertheless go ahead, not least if the Chinese have initiated building a fleet of nuclear power plants relying on Australian supplies. The Chinese have already requested permission to mine for their own uranium in Australia and may insist in taking over the project.

An Australian Broadcasting Corporation reporter, Hayden Cooper interviewed the South Australian premier Mike Rann with Roger Higgins, BHP's Base Metals director in November 2005 when the first intimations of the size of the Olympic Dam expansion emerged. [5]  The orebodies occur between 350 metres and 1 km down, so that to start the open pit a hole 3 km by 3 km by 350 m down will be excavated and the spoil set to the side, before the first copper and uranium ores are reached. BHP anticipate that the initial excavation will take 4 years to remove 3 cubic kilometres of rock. The scale of the excavation can be seen in the aerial picture [6] of the Escondida copper mine in Chile, which it is expected to rival.

The most interesting aside from this interview was that Mike Higgins stated that "Without the copper and the other products, gold and silver, there wouldn't be a mine here". The uranium ore grade at Olympic Dam is around 0.04%, so it can be concluded that the other uranium deposits in Australia, with an average grade of 0.045% would only be viable in association with other products. Unless the prospecting finds other more remunerative co-products, further uranium mining projects in Australia can be ruled out.

Olympic Dam's infrastructure

Water

The current underground mine and ore processing requires a 12 billion litres/annum water supply, which comes from two well fields in the Great Artesian Basin. An additional 44 billion litres of water a year (120 megalitres/day) will be required for the expansion and it is proposed to build a seawater desalination plant at Port Bonython, North East of Whyalla on the Upper Spencer Gulf. This will require the laying of a 330 km pipeline and associated pumping. The desalination plant will require 35 MW electricity supply.

South Australia is Australia's driest region and uses recycled water for crops. Recent rains have not entirely replenished the acquifers. Uranium mining might not enjoy a high priority for energy-consuming desalination if farmers continue to suffer the consequences of the recent severe drought.

Electricity

The expansion will require the building of a 275 KV transmission line providing 400 MW of electricity or a gas pipeline to supply a power station.

Transport

An 80 km rail extension is planned from Pimba to transport of over 2 million tonnes per annum of materials and products. Port facilities will be extended. The Roxby Downs airport will have to be moved.

Town

Roxby Downs will be extended to cater for an additional 5,000 inhabitants and a temporary construction camp for 3,000 workers for 3-4 years will be built.

Although the infrastructure capital expenditure may be raised by public bodies, the costs of using the facilities will be reflected in the product prices.

Energy capital

Energy will be required for the prospecting and development of the mine and its processing plant as well as its infrastructure requirements. However, the main input will be the excavation of the open pit, which will require predominantly diesel for the drilling of holes for explosives, the side-loading excavators and the haul trucks.

Australia is a net importer of diesel equivalent to around 100 PJ, which at 38.66 GJ/m3 is 2.6 million m3 or 2.17 million tonnes diesel imported per annum. The excavation of 3 cubic kilometres of rock and depositing it around the hole would require around 6.6 million tonnes of diesel alone over the four years, or 1.65 million tonnes per annum. This single  project would increase Australia's diesel imports by 70% over the four years.

There are other energy expenditures associated with the excavation of the hole, such as the manufacture of the explosives and the maintenance of the equipment and administration services.

  • Other energy capital will be expended when building the
  • desalination plant and
  • water pipeline,
  • the electricity transmission line,
  • the rail connection,
  • the moving of the airport and
  • the building of the town extension and temporary accommodation and not least
  • the manufacturing and
  • transporting of the processing plant and
  • its erection and
  • commissioning on site.

Energy consumption

It is anticipated that around 40 million tonnes of ore will be mined and milled per annum, producing 500,000 tonnes of copper and 15,000 tonnes of uranium. Assuming a waste rock to ore ratio of 2 : 1; some 100 million tonnes will be excavated and set aside as waste. To accomplish this some 600,000 to 700,000 tonnes of diesel per annum will be required.

There will be added to this the process energy consumptions. As the ore contains all four co-products which are chemically separated, it will be difficult to attribute the various energy consumption to the products and the company's published environmental data refrains from doing so.

As far as the non-uranium co-products are concerned the project feasibility study will have to compare costs and prices, taking into account the constant fluctuations in fuel and commodity prices. In the case of uranium, the task is somewhat easier as the energy inputs can be compared with the energy outputs over a subsequent nuclear fuel cycle.

If it does go ahead, the Olympic Dam expansion will be uniquely viable. If the extraction of the copper and other co-products proves to be economic, it will compensate for the energy losses occasioned by mining and milling the low grade uranium ores.

The future of Australian uranium mining

Australia has played its part in inspiring a "nuclear renaissance", claiming to have the world's largest uranium reserves. It would appear, however, that this has to be tempered with caution. This Olympic Dam expansion is likely to be the last viable mine unless other prospects arise having equally valuable co-products.

The University of Sydney ISA report (Integrated Sustainability Analysis) Figures 5.4 and 5.5 on page 95 provide a useful comparison of ore grades in Australia and Canada. [7] The low grades of ore in Australia compare unfavourably with those in Canada with 0.045% and 8% average grades respectively. Although economic "cut-off" grades may decline from the present 0.08% with rising uranium prices, it is unlikely that investment in mines with lower grades will take off.

The Rio Tinto cut-off grade at the Ranger mine applies to existing ore stocks, judging that milling can continue for several years after the mine has closed. However, the criteria applied to a new venture would have to include the initial overburden removal and infrastructure capital. It seems highly unlikely that there will be investment in solely uranium mines with ore grades below 0.2%.

The OECD Nuclear Energy Agency (NEA) argues differently, assuming that uranium prices rise add to extractable reserves. It is further argued that nuclear fuel costs are marginal and that the price of uranium has only a moderate effect on generating costs. Uranium is currently US$ 187/kg, whereas if the ore grade equated to the low grades of gold ores mined by similar open pit methods, the extraction costs would be similar around US$ 12,000/kg, at which level nuclear generation would certainly not be viable. There is an overall nuclear fuel cycle economic cut-off grade where uranium is the sole mined product. Australia needs to demonstrate what this is before it can claim that its uranium ore grades warrant investment.

Uranium mining in Australia depends initially on the price of copper and how BHP Billiton judges its future price movements, but thereafter (and perhaps from now if the Olympic Dam expansion is turned down) it has an uncertain future if any at all.

[1]  Energy from Uranium , Jan Willem Storm van Leeuwen.

[2]  http://www.uic.com.au/emine.htm

[3]  http://www.riotinto.com/media/media_releases_1305.asp

[4]  http://www.abc.net.au/am/content/2005/s1497518.htm

[5]  http://www.bhpbilliton.com/bbContentRepository/2006112345802/ceda.pdf

[6]  http://odx.bhpbilliton.com/index.asp

and http://odx.bhpbilliton.com/expansion/minedevelopment.asp

[7]  http://www.isa.org.usyd.edu.au/