A move to mothball the Honeymoon uranium mine in South Australia is a market decision based on current uranium prices, says Premier Jay Weatherill.
He said businesses in the mining sector would sometimes scale back or even mothball operations until prices rebound.
“That’s why I understand the decision has been taken here,” the Premier said today.
“It’s simply a market decision based on the price of uranium at this particular point in time.”
The mine in SA’s north-east is operated by Canadian-based group Uranium One, which recently became a wholly-owned subsidiary of Russian state company JSC Atomredmetzoloto.
The company has made no comment on its precise plans for the Honeymoon development, although recently released analysis included a write-down in the value of the project by more than $60 million.
The company also indicated that all well-field development at Honeymoon had been deferred and that no wells were installed during this year’s September quarter.
Uranium One says it has “impaired” the Honeymoon project due to continuing difficulties with the production process and high mine operations costs.
Asked to comment on the impact of high mining costs, Mr Weatherill said the State Government made no apology for the fact that workers in the mining sector were paid well and that the Government insisted on high safety standards.
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But he said there was also political stability in Australia and a permissive regime that allowed mines to operate effectively and efficiently while protecting environmental standards.
The Premier rejected suggestions the Honeymoon decision reflected badly on the wider mining sector in SA.
“The mining and energy province in South Australia is alive and well,” he said.
But the South Australian Opposition said reports Honeymoon would cease operation were an indication the resources sector was under pressure.
“With a cloud over the manufacturing sector and a high tax handbrake on our economy, government should be reinvesting in mining, not letting it wither on the vine,” resources and energy spokesman Martin Hamilton-Smith said.
