By Dave Brown – Exclusive to Uranium Investing News
When it comes to mining method and approach employed for any particular uranium deposit, the decision is governed by the nature of the orebody, safety, environmental and economic considerations. Over the last 60 years, developments have changed uranium mining to include production methods which had previously been absent from the industry landscape. In 2009, the breakdown of reported production was as follows: conventional underground and open pit mining at 57 percent; in situ leach (ISL) mining at 36 percent and by-product mining at 7 percent. Investors will note that Olympic Dam was classified as by-product rather than in underground category for reporting purposes.
Many will recognize the Olympic Dam multi-mineral ore body controlled by BHP Billiton (NYSE: BHP) as the world’s largest resource of low-grade uranium, accounting for about 66 percent of Australia’s reserves plus resources. Uranium occurs with copper, gold, silver, and rare earth elements in a large hematite-rich granite breccia complex overlain by flat-lying sedimentary rocks.
Uranium mining methods have been changing. In 1990, 55 percent of world production came from underground mines, but this shrunk dramatically to 1999, with 33 percent at the time. Since the year 2000, new Canadian mines have increased the global representation of underground mines again.
For the 2009 reporting period a total of 18,262 tonnes was produced by ISL operations, representing 36 percent of world total production, a share which has risen steadily from 16 percent in 2000. The distribution of this ISL production was collectively allocated between 13,473 tonnes of uranium from Kazakhstan, 2429 tonnes of uranium in Uzbekistan, 1217 tonnes of uranium in USA, 583 tonnes of uranium in Australia and 560 tonnes of uranium in Russia.
Production costs and shortfall
In an exclusive interview with Uranium Investing News, Amir Adnani, Chief Executive Officer of Uranium Energy Corp. (AMEX:UEC) discussed the cost advantages of ISL mining projects compared with conventional and open pit mining techniques. “When you look at some of the feasibility reports prepared and published by some of the lower grade deposits that are open pit situations in Namibia…you are looking at costs from between $40-$50.”
Adnani also cited concern for the longer term price incentives for uranium production, “firms like RBC Capital have come out and said that the sector needs at least $80 per pound uranium…the average cost of production for these projects is about $60 per pound, people are not going to get into this business just to break even. They need to have return on capital and it’s got to be exciting.” Warwick Grigor, a sector analyst and chairman of BGF Equities in Sydney suggests a more conservative figure of “$60 per pound uranium oxide figure is the minimum required to encourage new mines.”
The World Nuclear Association reports production from world uranium mines currently supplies only about 75 percent of the requirements of power utilities, and most analysts would agree that a sustainably higher price for uranium could be required to help resolve this gap to satisfy reactor needs, initial core requirements and inventories for new reactors.
Underground and open pit mining
Conventional open cut mining, involving a large pit and the removal of overburden in addition to considerable waste rock is most suitable where orebodies have been deposited close to the surface. Underground mining is usually employed, when the orebodies are deeper, involving the construction of access shafts and tunnels but with less waste rock removal and less environmental impact. In either case, grade control is usually achieved by measuring radioactivity as a surrogate for uranium concentration. A radiometric device detects associated radioactive minerals which are decay products of the uranium, rather than the uranium itself.
These conventional mining techniques involve removing mineralized rock from the ground, breaking up the ore and treating it to remove the minerals being sought. The associated mines have a mill where the ore is crushed, ground and then chemically treated with sulfuric acid called “lixiviant” or “leachate” added to dissolve the uranium oxides and liberate the uranium from the crushed rock. Some mills employ carbonate leaching instead of sulfuric acid, depending on the orebody. Following this process at the mill of a conventional mine the uranium is then separated by ion exchange before being dried and packed.
At Ranger in north Australia, Rossing in Namibia, and most of Canada’s Northern Saskatchewan mines through to McClean Lake, the orebodies have been accessed by open cut mining. Other mines such as Olympic Dam in Australia, McArthur River, Rabbit Lake and Cigar Lake in Northern Saskatchewan, and Akouta in Niger are underground, up to 600 metres deep. At McClean Lake and possibly Ranger, mining will be completed underground.
In situ leach mining
In situ leaching (ISL), also known as solution mining or in situ recovery (ISR) in North America, involves leaving the ore where it is in the ground, and recovering the minerals from it by dissolving them and pumping the pregnant solution to the surface where the minerals can be recovered. Consequently, there is little surface disturbance and no tailings or waste rock generated. However, the orebody needs to be permeable to the liquids used, and located so that they do not contaminate ground water away from the orebody. The leaching solution dissolves the uranium before being pumped to the surface treatment plant where the uranium is recovered as a precipitate.
ISL uranium mining was first tried on an experimental basis in Wyoming during the early 1960s. The first commercial mine began operating in 1974. Today most uranium production from Kazakhstan and the United States comes from ISL mining. Several projects are licensed to operate in Wyoming, Nebraska and Texas with most of the operational mines dating from the 1990s. They are relatively small, producing under 1000 tonnes per year, but combined they provide most of the uranium production within the United States.
Uranium ISL uses the native groundwater in the orebody which is fortified with a complexing agent and in most cases an oxidant. It is then pumped through the underground orebody to recover the minerals in it by leaching. Once the pregnant solution is returned to the surface, the uranium is recovered in much the same way as in any other uranium plant (mill).
In Australian ISL mines (Beverley and the soon to be opened Honeymoon Mine), the oxidant used is hydrogen peroxide and the complexing agent sulfuric acid. Kazakh ISL mines generally do not employ an oxidant but use much higher acid concentrations in the circulating solutions. ISL mines in the USA use an alkali leach due to the presence of significant quantities of acid-consuming minerals such as gypsum and limestone in the host aquifers. Any more than a few percent carbonate minerals means that alkali leach must be used in preference to the more efficient acid leach.
Some ore, usually very low-grade, is treated by heap leaching. Here the broken ore is stacked on an impermeable pad and irrigated with acid or alkaline solution. The pregnant liquor from this is treated to recover the uranium, as with ISL.
By product methods
Where uranium is recovered as a by-product, for instance, of copper or phosphate, the treatment process is likely to be more complex. At the Olympic Dam deposit, cross-price elasticity becomes important on the production side, as the scale and allocation of resources is contingent upon future expectations for a series of resources.