Uranium miner looks to produce with ‘invisible mining’ method

Australia holds one third of the world’s reserves of uranium, with a history of mining dating back to 1954.

While there was an initial blip of uranium mining in the early 1900s, primarily for medical and uses, exploration interest didn’t resurface until the 50s and 60s when the small yet mighty atom’s significance played out on the world stage and uranium was stockpiled following World War II, drawing innovative eyes to the yellowcake’s potential application as a fuel of the future.

Many of Australia’s significant uranium deposits were discovered and mined between the 50s and 60s, as a second wave of exploration was ushered in amidst the development of civil nuclear power in the late 1960s.

A total of about 60 uranium deposits were identified from the 1950s through to the late 1970s, many by big companies with big budgets according to the World Nuclear Association (WNA).

Despite the initial promise, an underwhelming price environment meant the uranium industry stalled in Australia.

Fluctuating pricing is standard across many commodity markets as technical progress ramps up and production costs trend down. For uranium however, high prices in the late 1970s gave way to depressed prices in the whole of the period of the 1980s and 1990s, with spot prices below the cost of production for all but the lowest cost mines, according to the WNA.

But times have changed.

Uranium has held steady between $110 and $125 (US$70 and US$80) per pound since 2024.

With a more confident market, interest in the commodity is switching back on, especially with increasing concern over diversifying and securing our energy mix.

One miner, Alligator Energy (ASX: AGE), is transitioning from uranium exploration to production, focusing on its Samphire project in South Australia, ISR mining and community engagement.

The company has active projects in South Australia and the Northern Territory. These include the Samphire and Big Lake uranium projects in South Australia, and the Alligator Rivers project in the Northern Territory.

Alligator Energy chief executive Andrea Marsland-Smith speaks with The Australian Mining Review about the company’s pivotal position in the uranium industry.

Transition to production

Alligator Energy’s journey from exploration to production started in 2010 with uranium tenements in Northern Territory, particularly Arnhem Land, which has a geological setting similar to Canada’s uranium deposits.

Dr Marsland-Smith explains that the company held those tenements through low uranium prices.

“In that time period, uranium prices were between US$20 and $40 per pound,” she said.

“As a result, there weren’t many development projects going on in that time period.

“Towards the end of 2019, the uranium price started to increase.

“That was primarily because of the decarbonisation targets and Australia putting in place the decarbonisation piece globally.

“Nuclear utilities and mines that had been shut down in that low periods started to ramp up and start up again to supply the demand that the nuclear power plants needed for their future offtake and production.

“That fundamental underpinning started to drive the uranium price up around Q1 CY20 and that was the time when Alligator sought to acquire the Samphire uranium project.”

Samphire uranium project

Alligator Energy acquired the Samphire uranium project in late 2020. The asset, discovered in 2016, was stranded due to low uranium prices at the time.

Over the last few years, Alligator Energy has increased the resource base at Samphire from 14.8m pounds to 18m pounds through drilling and geological studies.

Because of the depth of experience of Alligator Energy’s team, the company has been able to complete the scoping study to almost a pre-feasibility stage level when it comes to costing.

Dr Marsland-Smith says the scoping study indicates that the resource at Samphire is enough to sustain a 10–12-year mine life at today’s prices.

“It’s economic. We could [begin mining] today, but we’re just missing the mining lease approval,” she said.

“Given that the scoping study gave the green light for the economics of the project, we then embarked on the next phase of de-risking the project.”

This next phase for Alligator Energy is its in situ recovery (ISR) pilot trial, testing the ISR process in a live field environment.

Invisible mining

One way to capitalise on the uranium industry’s potential, making the most of efficiency and environmental benefits, is through ISR.

ISR is a sustainable, low-cost mining method with minimal environmental impact, as it avoids the creation of tailings and large holes.

The method, initially developed independently in the US and USSR has been used globally since the 1960s and now contributes significantly to global uranium production.

“It’s been used since the 1960s in the US and is now regularly used in Kazakhstan, China, Russia and Australia in the last 25 years,” Dr Marsland-Smith said.

“Overall, ISR contributes about 40% of the global world uranium production, a significant amount.

“The other benefit of ISR is that you can start a project of this size. You don’t have to have a massive resource.”

To date, there have been five approved uranium mines in South Australia, which are all mined via ISR.

ISR, heralded as an ‘invisible’ mining method, is anything but when it comes to impact. The method reduces cost concerns of uranium mining, with applications in other commodities as well, with copper the most popular after uranium.

The method enables the recovery of uranium by essentially reversing the natural process that deposited the uranium in the first place. The highly saline groundwater within the sedimentary sand layer that hosts the orebody is conditioned to mobilise the uranium back into solution, which is then drawn to the recovery wells.

Through this method, there is no digging or moving tonnes of overburden in the same way that would be seen in an open cut or underground mine

ISR is scalable and nimble, allowing for easy expansion by adding more wells as additional resources are discovered.

In Australia, ISR is applied in saline groundwater areas, which are twice as salty as seawater and have no beneficial use, minimising environmental concerns. Post-mining remediation methods, such as dilution, can restore groundwater neutrality.

One of ISR’s key advantages is its cost-effectiveness in uranium production. The operational expenditure associated with uranium production via ISR typically amounts to less than $61 (US$40) per pound, according to In situ?recovery, an alternative to conventional methods of mining: Exploration, resource estimation, environmental issues, project evaluation and economics published in the Ore Geology Reviews.

This makes it so that even during periods of low uranium market prices, ISR-operated deposits can still be profitable. This cost-effectiveness makes ISR highly attractive for companies such as Alligator Energy, as it allows them to maximise profits while controlling costs.

Alligator Energy is well-equipped for its next phase. The company has grown its team from three people to 25, assembling ISR experts to prepare for full mine development in the next few years.

A pilot plant has been built and is ready for deployment pending final approvals.

The pilot trial results will feed into a definitive feasibility study and concurrent mining lease applications at federal and state levels.

Mining lease applications for uranium projects typically take up to five years, with production expected to begin around FY31.

Environmental and community engagement strategy

Alligator Energy acknowledges and respects that the topic of uranium is a concerning one for some people.

The company is committed to providing open and transparent information about all aspects of the proposed Samphire project and about the environmental standards and compliance regime that exist.

Since commencing on-ground activities at the Samphire project in July 2020, Alligator Energy has implemented a range of actions to manage and deliver positive environmental outcomes during exploration activities.

“Where we operate is where we want our stakeholders to benefit from our presence,” Dr Marsland-Smith said.

Some of the key approaches and initiatives implemented to date include a focus on protecting soil and vegetation, annual collection of fresh, local province, native seed for rehabilitation activities and use of drones for weed surveying among others.

Alligator Energy prioritises stakeholder benefits in areas where it operates, working closely with pastoralists in sheep grazing country to ensure mutual benefits, such as road maintenance and concurrent land use.

The company rehabilitates drill holes using local seeds, doubling bush density to improve pasture quality for future pastoralists.

“We work hard on trying to employ locals from the Whyalla community, so every job that comes up, we consider someone from Whyalla first if there’s someone with the skills,” Dr Marsland-Smith said.

“We just do small practical things, but they have big impacts at the end of the day.

“The Samphire project is very well supported by the community and we’re proud of where we are right now in terms of the positioning of our social licence to operate.”

Legal and regulatory landscape for uranium

The uranium industry is one of the most highly regulated in the world.

Australia is regarded as a world-leader in uranium industry legislation and regulation with many other countries following Australia to ensure the safety and security of the industry within their jurisdictions

All Australian uranium production is exported for electrical power generation as Australia is party to the Nuclear Non-Proliferation Treaty (NPT). This means uranium mined in Australia can only be used for medical or energy purposes.

In Australia, under current state laws, uranium mining is allowed in the Northern Territory and South Australia and for mines approved prior to 2017 in WA. Uranium exploration and operations are not permitted in New South Wales and Queensland.

While Alligator Energy supports nuclear power as part of a decarbonisation mix, the company says the debate does not impact its business operations or export activities.

Dr Marsland-Smith says it won’t affect Alligator Energy whether Australia goes nuclear or not.

“The uncertainty lies in nuclear power production in Australia,” she said.

“Uranium mining sits outside of that because Australia’s been exporting uranium for the last 40 years to other countries for nuclear power generation, so it doesn’t affect uranium mining in Australia whatsoever.”

Australia exports uranium to converters, which create fuel cells for nuclear power plants.  As a result, developing nuclear power infrastructure in Australia could take decades.