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Queensland is no stranger when it comes to banning uranium mining. Though the metal was mined in the state in the 1950s, that ended after the closure of the Mary Kathleen mine in 1982, and uranium mining was eventually prohibited by the state’s Labor Party-led government in 1989. That ban ended in 2012 when government leadership switched to the Liberal-National Party, but it looks like it’s set to come back in full force.
Queensland is no stranger when it comes to banning uranium mining. Though the metal was mined in the state in the 1950s, that ended after the closure of the Mary Kathleen mine in 1982, and uranium mining was eventually prohibited by the state’s Labor Party-led government in 1989.
That ban ended in 2012 when government leadership switched to the Liberal-National Party, but it looks like it’s set to come back in full force.
What happened?
When the Queensland government, still headed by the Liberal-National Party, started accepting applications for new uranium developments in August 2014, Mines Minister Andrew Cripps commented, “[t]he uranium industry has the potential to generate significant development in North Queensland, as well as royalties to fund school and health services, roads and public infrastructure.”
Indeed, allowing uranium mining would enable the state to remain “Australia’s job powerhouse,” as every new project has the potential to create many operational and construction jobs.
Unfortunately, it looks like those positive developments won’t come to pass. Last week, the newly reinstated Labor Party government announced that it will be putting the ban back in place at the cost of the jobs it originally promised, derailing the developmental plans of companies in the process.
According to Courier Mail, “[l]eft-wing unions, which hold significant sway over the newly-elected 44-member Labor caucus, have long opposed uranium, arguing it is a high-risk endeavour for a low economic return.”
Alongside the announcement of the ban, Natural Resources and Mines Minister Anthony Lynham noted that not all is lost for companies. Though they cannot currently move forward with their projects, they will be allowed to continue exploration efforts.
“Resource companies can continue to apply for a generic exploration permit for minerals which allows them to explore for all minerals other than coal,’’ he said.
No on board with the ban
The Queensland Resources Council (QRC), an industry council that represents commercial developers of Queensland’s minerals and energy resources, has stepped forward to say that the move is “disappointing, but not surprising.”
As reported by The Australian, QRC CEO Michael Roche commented, “[r]eimposition of a blanket ban on uranium mining will come as a particular disappointment to the people of northwest Queensland, who rightly see uranium mining as a valuable new jobs generator for the region.”
He has suggested that instead of a blanket ban, each project should be judged individually. That being said, the Roche has pointed out that the blanket ban is a “bitter disappointment” for the people in the northwest of the state, where the more valuable uranium deposits are located.
All that said, it’s important to note that while the Liberal-National Party government had been accepting applications for uranium mining since August 2014, no applications had been lodged.
At what cost?
One key takeaway from the reinstatement of the ban is that there is always a cost to doing business. In the case of the ban, jobs are on the line, but so is loss of confidence for investors.
The state’s biggest uranium player, Summit Resources (ASX:SMM), has shelled out $40 million in exploration efforts over the last five years. As CEO Brendan O’Hara told The Australian, “[i]f there’s one thing investors need, it’s certainty” — and the ban certainly doesn’t lend itself to that.
O’Hara noted that in a case such as this, “it undermines your position. It’s not so much an issue today, because the uranium price is thoroughly in the doldrums.” He added, “if (the price) were to increase significantly, quickly, you’d need investment funds. Investors hate uncertainty.”
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