Western Australia poised for uranium mining revival as political support grows

Just days after Federal Liberal party leader Peter Dutton came out in hard-hitting support of nuclear power, his Western Australian counterpart has backed a return to uranium mining in her state.

Opposition leader Libby Mettam has confirmed that uranium miners would be able to proceed through the same environmental approvals as other minerals if she is elected as leader of the WA government in 2025.

With uranium mining prohibited by the WA government since 2017, the news has buoyed the hopes of a number of companies that have uranium contained in their exploration permits.

The potential mining of the energy metal is particularly attractive at the moment, with uranium prices rocketing this year on growing nuclear power usage around the globe.

Currently sitting at around A$131 per pound, analysts are predicting spot price targets of around A$160 per pound by year-end and A$175 in 2025.

MCA offers full support

The WA Liberal Party backing for a resumption of uranium mining was immediately welcomed by the Minerals Council of Australia (MCA).

MCA chief executive officer Tania Constable said the policy shift promises to lift the current unwarranted moratorium on uranium mining, which she says has hindered WA’s economic and environmental potential.

“The existing de facto ban on uranium mining lacks justification in both science and economics, stifling the development of WA’s world-class uranium reserves,” Ms Constable said.

These reserves have the capability to bolster the state’s economic status while assisting our trading partners in achieving their net-zero ambitions.”

“Uranium mining represents a new opportunity for WA, creating more new jobs for highly skilled, well-paid workers.”

“It would position the state as a key player in global decarbonisation efforts, supplying critical materials for clean, zero-emission energy generation.”

“It’s notable that uranium explorers have so far invested over $1 billion in Western Australia without realising a return on their investment due to these restrictive policies.”

“Western Australia’s lack of progress on uranium mining lags significantly behind its neighbour South Australia, where the Malinauskas Government’s supportive policies have facilitated production at a third uranium mine.”

Outdated policy

Ms Constable said that, with Australia’s current energy challenges, the nation can no longer afford this outdated prohibition.

“This policy change proposed by Libby Mettam is a step in the right direction, promising to unlock the immense potential of WA’s uranium resources.”

“The MCA stands ready to support the development of a sustainable and prosperous uranium industry that benefits all Australians.”

Ms Mettam told a recent breakfast meeting in Perth that backing uranium mining in WA will not only address the state’s economic needs but also position it as a pioneer in the global transition towards sustainable energy.

“Quite simply, this is an opportunity that should be seized, it is an opportunity a WA Liberal government would develop.”

“The state is endowed with substantial uranium reserves with the potential to create jobs, stimulate economic growth, and diversify our economy.”

“Uranium mining would generate direct employment opportunities and stimulate growth in related industries, such as manufacturing, infrastructure development, and technology.”

Nonsensical stance

Analysts and miners believe WA’s anti-uranium mining stance makes no sense and say environmental guidelines for the mining of the commodity should not be tied to those associated with nuclear power.

They point out that a number of operations in WA that are already removing uranium as part of their general mining of other minerals.

Uranium mineralisation is widespread in WA with several commercial uranium deposits including Mulga Rock, Wiluna, Yeelirrie and Kintyre.

Another 14 uranium exploration prospects have been identified in the state.

Australian juniors ready to move

Leading the companies eager for a policy change is Cauldron Energy (ASX: CXU), which recently raised money (at a premium), delivered a scoping study and is preparing to undertake a significant drilling campaign at the Yanrey uranium project.

The company recently announced it is well-advanced with planning for a two-phase drilling program of up to 25,000 metres this year.

Planning for phase 1 resource extension and infill drilling program of up to 7,000 meters is on track to commence in Q2 2024.

Other players include Toro Energy (ASX: TOE), which recently elected to take advantage of a rapidly improving market to lower the cutoff grade and expand the stated uranium and vanadium resources at the Lake Way and Centipede-Millipede deposits by up to 25% as it moves to fast-track the development of its Wiluna uranium project towards production.

Deep Yellow (ASX: DYL) is planning to utilise some of the funds from a massive capital raising earlier this year on progressing its large Mulga Rock project.

It has also obtained highly encouraging results from ongoing metallurgical testwork including an overall recovery of uranium above 90%.

Global uranium powerhouse Cameco is also keenly watching what happens in WA where the TSX-listed company has the Yeerilee and Kintyre projects.