Olympian task

Adelaide Advertiser
Thursday 19/2/2009 Page: 19

THE jobs of generations of South Australians hinge on the expansion of the Olympic Dam mine and how its environmental impact statement is received by the public, politicians and the board of mining giant BHP Billiton. The EIS will be delivered in May against a background of conflicting forces.

Driving the project forward with urgency will be the world's thirst for uranium, to generate power without worsening climate change, as well as revived demand for copper as the global economy recovers. Working against it will be the global financial crisis, which has made finding capital harder and sent mineral prices plummeting. There also will be major questions about sourcing water, power and people in South Australia.

The scale of the project and its longevity - estimated at 100 years - mean BHP will be cautious in getting the fundamental strategy right before it begins. BHP chief executive Marius Kloppers earlier this month said the project was essentially entering a holding pattern while the EIS and approvals process took place. "The timing of approvals certainly is reasonably uncertain and consistent with that we are throttling back the burn rate on the project to reflect the completion of a phase of study and the waiting period on the EIS," he said.

This has resulted in about 200 people being taken off the expansion project study team and Graeme Hunt, BHP Billiton's Adelaide based international head of uranium, deciding to step down and his position dispensed with. Asked whether BHP was still as optimistic about the future of Olympic Dam as it was when the mine was bought from WMC, Mr Kloppers was sanguine.

"If I reflect back on the uranium market, probably the rate of reactor build is probably a little slower than I would have thought," he said. "But at the same time, I probably think that the awareness of greenhouse emissions and so on probably gives more upside going forward." Olympic Dam has more uranium than the combined quantity in the next 20 biggest known deposits in the world, or nearly 40% of the world's uranium.

While a few sceptics clutch at obscure science to deny global warming, most of the world has moved on and policy makers are looking at how to cut greenhouse emissions. "I have never seen a credible scenario for reducing emissions that did not include climate change," United Nations Framework Convention on Climate Change executive secretary Yvo de Boer said. Financial analyst Deloitte has calculated that electricity generation accounts for about 40% of global greenhouse gas emissions.

Deloitte compared the carbon footprint of nuclear generation, including indirect emissions from the life cycle of the process, against other methods. Coal produced at least 46 times more greenhouse gas than nuclear and gas-fired power systems at least 20 times more. Climate change concerns, concerns about the security of energy supplies, along with the proven ability of nuclear energy stations to generate cost-effective, base-load electricity had led to 350 new reactors on various drawing boards, Deloitte found.

Australian Uranium Association executive director Michael Angwin said long-term demand for uranium globally would grow by 50 to 100% by 2030. The forecasts in the Deloitte Outlook for the Uranium Industry report, which was commissioned by the association, would still hold true despite global economic downturn. The forecasts were for Australia's uranium industry to increase Australia's GDP by up to $17.4 billion by 2030.

South Australian Chamber of Mines and Energy chief executive Jason Kuchel said, with Olympic Dam and other projects, SA was poised to take full advantage of the growing demand for uranium. Australia was better placed than many countries and SA better placed than other states. While the new Liberal Government in Western Australia had overturned a ban on uranium mining, it did not have the regulatory system in place.

'°To run a nuclear energy plant, you need to have very secure sources of uranium and you can't afford to run out at any given point in time by buying from a country that's not geopolitically stable," he said. "That positions SA very well in terms of stability as a supplier." Mineral Resources Development Minister Paul Holloway has said he was "delighted by the renewed interest in uranium exploration and the key role SA can now play in supplying the growing world demand for low emission fuels".

SA's support for the mining industry, particularly its exploration program PACE, was paying dividends on top of Olympic Dam. He noted that the Four Mile project, located near Beverley - the only operating uranium mine in SA other than Olympic Dam - was "one of the most significant uranium discoveries anywhere in the world in the past 25 years". "This proposed mine underlines SA's importance as a major source of the world's uranium resource," he said.

Greens MLC Mark Parnell says the Olympic Dam expansion is "one of the State's biggest economic proposals, the biggest infrastructure project in our history, the biggest hole in the ground in the world". Accordingly he wants it to receive full scrutiny. While the Greens had always opposed uranium mining, the party wanted to ensure any development was sustainable. "This is overwhelmingly a copper and gold mine. If this project is to get ahead we need it to be world-class in relation to sustainability and jobs.

"This will blow our legislative greenhouse targets out of the water if (the State Government) does not insist on BHP being carbon neutral," he said. Both the Government and BHP want the project to go ahead as quickly as possible but also are being cautious. The Government has not factored the extra revenues that will flow from the expansion into its Budget.

Nor has BHP included any extra revenue in its five-year forecasts. But with the world's biggest known uranium deposit - mingled with the fourth biggest copper and gold deposits - there can surely be no doubt it will proceed. "I think the important thing is that BHP is still moving ahead with the project," Mr Kuchel said.