Expanding Olympic Dam: with great power comes great responsibility

Exporting uranium carries a risk not just in Australia, but all over the world. Mad House Photography

The South Australian and Federal governments have approved another expansion at Olympic Dam. This expansion raises some very important questions about Australia’s role in the future of global energy and its associated environmental risks.

This gargantuan copper-uranium-gold-silver-rare-earths mineral resource also brings with it enormous issues – not the least of which revolve around the uranium.

The amount of uranium contained at Olympic Dam is the biggest of any deposit in the world, by a factor of ten. It makes Australia a major player in uranium exports and the global nuclear debate.

In a post-Fukushima world, the hard questions need to be asked: what is Australia’s role in fuelling nuclear disaster, creating high-level nuclear waste and feeding nuclear weapons risks around the world?

Where does our uranium go?

Ever since 1977, all Australian uranium has supposedly been exported under strict safeguards and exclusively for civilian nuclear power. According to the Australian Safeguards and Non-proliferation Office (ASNO), Australia has 22 bilateral safeguards covering 39 countries.

We are still trying to expand this list, with the United Arab Emirates under negotiation and India a possibility in the near future. In a similar fashion to coal and climate change, Australia’s miners and politicians are keen to hawk their nuclear product to any country willing to buy.

According to ASNO, in the financial year 2009/10, Australia exported 7,555 tonnes of uranium oxide (or U3O8) valued at $758 million. This represented some 12% of world nuclear fuel requirements.

In 2009/10, the three uranium mines in Australia – Ranger (NT), Olympic Dam (SA) and Beverley (SA) – produced 4,262, 2,279 and about 450 tonnes of uranium oxide respectively. Typically, over the past decade, exports have averaged close to 9,400 tonnes of uranium oxide per year (averaging ~$600 million) but problems at all three mines have limited recent production.

All three mines refuse to publicly report which companies and countries they export to. The only information publicly available on uranium exports is from ASNO, which used to report country export data.

Now they simply say that (calendar) 2009 exports were about one-third each to “North America, Europe and Asia”. Full disclosure is avoided to “protect commercial confidentiality”.

By December 2009 (the most recent ASNO data available), Australia was responsible for 159,139 tonnes of nuclear material sourced from our uranium exports. About 61% of this is depleted uranium. There is also 127 tonnes of plutonium remaining in spent nuclear fuel and 1.7 tonnes of separated plutonium (mostly expected to be in Japan).

Where does our uranium go and what does it do when it gets there? AAP

Every tonne of uranium exported increases the burden of depleted uranium, high-level nuclear waste and plutonium stocks, fuelling not only nuclear disasters (such as Fukushima) but potentially increasing nuclear weapons risks (for example, in India-Pakistan).

Do we need the money from uranium?

How does uranium compare to our other exports? According to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) export data, in the decade from 2000/01 to 2009/10, uranium exports averaged $596 million/year. Lamb, cheese, cotton, barley, sugar, wool, wine, other crops, wheat, and beef-veal, each averaged $664, $806, $955, $1,170, $1,286, $1,825, $2,309, $3,463, $3,665, and $4,002 million/year, respectively.

Black coal averaged approximately $22.5 billion/year and iron ore approximately $14.6 billion/year. For calendar year 2010, Aussie coal exports were 301 million tonnes, leading to approximately 769 million tonnes of greenhouse gas emissions in the countries where it was used.

If we assume that every tonne of uranium exported in 2010 actually shut down a coal-fired power station (which has yet to happen anyway), the most this could reduce emissions by would be 257 million tonnes.

An often ignored aspect of the Olympic Dam orebody is that it also contains rare earths – used in magnets for wind turbines, fuel cells, and a range of useful environmental technologies which are growing rapidly.

Based on BHP Billiton’s 2011 reported mineral resource for Olympic Dam, the contained copper-uranium-gold-silver is worth $587, $284, $154 and $14 billion, respectively – a total of a mere trillion dollars. The rare earths are worth about $4,500 billion.

At recent iron ore prices, BHPB’s iron ore resources in the Pilbara are worth $4,580 billion. Given the hype about rare earths, it is stunning that BHPB are continuing to ignore the potential for rare earths from the mineral wealth at Olympic Dam – after all, it makes the uranium look like small change.

BHPB’s real game remains more coal, more iron ore, more copper, more oil and gas (amongst a few others). Uranium is merely a sideshow, but it’s a nice distraction in the public debate on fundamental issues such as energy safety and security and climate change.

We know the financial benefits: what are the costs?

The full size of the mineral resource at Olympic Dam is more than nine billion tonnes. Given the approvals just awarded to the current expansion (expect another even bigger expansion proposal within a few years), this means billions of tonnes of radioactive waste from the extraction process could now lie in the South Australian arid rangelands forever.

Despite the mine’s benefits, many worry about the costs. AAP

The tailings (residue) at Olympic Dam are supposed to be covered by soil and rock. No upfront assessment of the safety of this approach has taken place. The tailings will only be assessed for their long-term risk to the environment and people “from closure to in the order of 10,000 years”.

The Ranger uranium mine in the Northern Territory is required by the Federal Government to place all tailings into former pits to ensure “the tailings are physically isolated from the environment for at least 10,000 years” and that “any contaminants arising from the tailings will not result in any detrimental environmental impacts for at least 10,000 years”. This is a clear case of world’s best practice.

For BHP Billiton to be allowed to leave billions of tonnes of radioactive tailings above ground and subject to wind and water erosion in perpetuity, merely on the basis of some future “assessment” is, without doubt, world’s worst practice. The quantitative technical proof that such a scheme was safe should have been presented during the environmental assessment and not left to a future “assessment”.

The evidence is abundantly clear: at Radium Hill in South Australia, less than ten years after covers were placed over its tailings, those covers were eroding and exposing tailings to wind dispersion.

In the Witwatersrand goldfield in South Africa, billions of tonnes of radioactive gold tailings blow dust freely across communities or leak polluted water into the environment (issues Marius Kloppers, the CEO of BHPB, should be very familiar with).

These impacts should be considered alongside the mine’s other effects: the huge desalination plant near Whyalla, increased Great Artesian Basin extraction, the huge pit, the new mountain range (made from the waste rock dumps), massive energy and chemicals consumption and so on.

It is clear that the ledger for Olympic Dam is far from a well-balanced, carefully assessed sum demonstrating a sound case of national benefit. Unfortunately, it appears to be quite the opposite.

Australia has a unique position in the global debate about energy – whether it’s from coal or uranium. It remains extremely disappointing that successive governments continue to promote false solutions such as more uranium (and coal) exports rather than focus on renewable and sustainable energy solutions (such as baseload solar thermal).

Focusing on renewable energy would earn Australia not only export dollars but credibility and respect. After all, with great power (or mineral resources) comes great responsibility.