Australia’s environmental protection agency has scuppered Cameco’s Yeelirrie uranium mine proposal, announcing on Wednesday that the project fails to protect underground fauna. Chairman of the EPA Tom Hatton flagged up 3 groundwater species that would be particularly threatened should mining commence in the area.
Cameco, Canada’s largest uranium producer, has been quick to contest the ruling, arguing that the risks to Australia’s wildlife can be mitigated. The company announced in a press release that; “We believe that with further sampling and research, subterranean fauna can be appropriately managed Yeelirrie and we will work with government agencies and stakeholders to find a way forward.”
Analysts have taken a more skeptical tone on the project. Cantor Fitzgerald Equity Research has assigned no value to the project, concluding that the market will not see production from Yeelirrie any time soon. Cameco has been squeezed by the slumping uranium market in recent years, shifting its focus towards core assets in Kazakhstan and Canada. The company assured investors on Wednesday that: “Cameco believes the long-term fundamentals of the nuclear industry are strong and we are taking prudent steps to prepare our uranium projects for improved market conditions.”
Yeelirrie is one of two projects in Western Australia owned by Cameco. The mining company bought the development four years ago for US$430 million in a deal with BHP Billiton. Cameco executives were planning to create two open pits on the site, processing facilities and infrastructure routes to transport the uranium oxide products. The Canadian company was planning to extract around 7,500 tonnes of uranium from the site per year. Yeelirrie is located roughly 650km from the city of Perth.
The project has faced opposition and protest from local aboriginal groups, many of whom view Yeelirrie as a sacred site. Cameco’s proposal, submitted to the EPA in 2014 was more ambitious that BHP’s original plan and would have attempted to mine a larger quantity of uranium over a shorter time period. Yeelirrie is estimated to contain roughly 49 thousand tonnes of uranium resources.
Cameco stock has been a headache for investors of late, sinking to 12 year lows at the end of July. The company reported Q2 losses of US$104 million as Japan has struggled to restart the majority of it nuclear generators following the Fukushima disaster back in 2011. There could be some relief in the uranium market over coming years however, as China and India forge ahead with plans for multiple nuclear reactor sites.
