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Australian uranium mine powers down amid supply crunch

January 20, 2021

Australian uranium mine powers down amid supply crunch

Energy Resources Australia (ASX: ERA) has ceased uranium production at its Ranger mine in the Northern Territory after 40 years of extracting the yellow metal.

Energy Resources Australia (ASX: ERA) has ceased uranium production at its Ranger mine in the Northern Territory after 40 years of extracting the yellow metal.

The mine produced 860,000 pounds (roughly 390 tonnes) of uranium oxide in the last quarter of the 2020 calendar year alone.

That brought the total volume of uranium produced for the year to 3.47 million pounds (1.574 tonnes) of uranium – 10% down on the previous year but still towards the upper end of the company’s production guidance.

Although Energy Resources Australia reportedly considered developing an underground resource which was discovered at the site in 2009, these plans were abandoned following a backlash from traditional land owners.

The company is now progressing with a permanent closure plan and rehabilitation works, which are to be completed by 2026.

The closure comes amid growing concerns over uranium supply, following Kazakhstan’s KazAtomProm (one of the world’s largest producers) signalling plans to cut production by 20% by 2022.

Meanwhile Canadian miner Cameco has placed its Cigar Lake mine into care and maintenance because of risks associated with the ongoing COVID-19 pandemic.

Australian company readies itself for growing demand

These reductions in uranium supply are being met with growing demand for the yellow metal as more nuclear power plants are brought online globally as a source of clean energy.

But a handful of Australian explorers including Marenica Energy (ASX: MEY) are currently progressing a number of uranium projects worldwide to fill the shortfall.

Marenica holds the rights to a number of projects in Australia and Namibia – where it’s the country’s largest tenement holder for nuclear fuels.

Last year the company identified mineralisation along a 30km stretch of prehistoric riverbed, known as a palaeochannel, at its Hirabeb tenement in Namibia.

Marenica Energy believes this could represent the most significant uranium discovery in the country since Husab was identified in 2008.

Following a successful $5.4 million capital raise at the end of 2020, Marenica Energy is now embarking on aggressive exploration program across both countries.

Hirabeb will be the company’s first priority.

“We now have the longer term funding to pursue our exploration and development activities in Namibia and Australia,” Marenica CEO Murray Hill said.

“These activities will be methodically planned to ensure the most efficient use of shareholders’ money with the view to getting the biggest ‘bang for our buck’,” he said. 

The raise followed successful testing of Marenica’s patented U-pgradeTM beneficiation process, developed in partnership with the CSIRO, at the Angela project in Australia.

Testing indicated a significant reduction in acid consumption (down roughly 77%) following the application of the process, potentially offering considerable economic and environmental benefits.

 

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Reach Markets have been engaged by MEY to help manage their investor communications.

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