New government heralds WA uranium boom

15 September 2008

Following a change of state government, Western Australia has ended its de facto ban on mining uranium. The issue of uranium mining had been a key issue in the recent election.
 

Colin Barnett, leader of the Liberal Party - which supports uranium mining - was announced as Premier on 14 September after the Labor Party, headed by Alan Carpenter, lost its majority in elections held on 6 September. The Liberals secured the support of the pro-uranium mining National Party, led by Brendon Grylls, and will form a coalition government.
 

Grylls, who held the balance of power after the elections left both Labor and Liberal parties without a majority, had said he was open to negotiations with both parties. However, he said he would not support either unless they backed his plan to spend some 25% of Western Australia's mineral royalties - about A$700 million ($568 million) - on infrastructure and services in rural areas.
 

The Labor government lost the elections after giving its anti-uranium stance a high profile in the campaign. Carpenter had pledged to legislate against uranium mining if he was returned to office. Barnett, however, made it clear during the campaign that he would free up uranium mining in the state.
 

The Australian Uranium Association (AUA) had highlighted the considerable sovereign risk threat introduced for a resource-based economy by Carpenter's intention to legislate against uranium mining. It claimed this would wipe hundreds of millions from the value of corporate assets without any offer of compensation.
 

The AUA said that it would seek meetings with the new ministers for resources, environment and indigenous affairs "to offer the industry's cooperation and assistance in developing best practice policies and regulations" once Barnett and Grylls has determined the structure of the new government.

 

"A considerable amount of evaluation work has already been done on a number of prospective mines and the formation of the Barnett-Grylls government will deliver immediate stimulus to the development of the industry," said Michael Angwin, head of the AUA. He added, "A number of companies with good prospects in the West are likely to accelerate their efforts to get their projects into production."
 

Angwin said, "It is important now to ensure the policy and regulatory framework is in place so that the industry can grow quickly but with the application of the highest environmental and safety standards." However, he noted that "developing uranium projects is complex and the first Western Australia uranium mine is unlikely to be in production until 2011 or 2012."
 

Mega Uranium said there is "no longer any political impediment" to the development of its Lake Maitland uranium project Western Australia's most advanced uranium project. It is likely to be the first uranium resource to get into production in the state. The Canadian-based company, which had threatened to pull out of Australia if Carpenter had won the election, said that it is on schedule to develop a mine and commission a plant in 2011 with an initial production capacity of 750 tonnes U3O8 per year.
 

While the national Labor government supports uranium mining and exports, it is up to each of the six states to approve projects.
 

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