Monday, December 6, 2010

Might BHP Billiton Be Back With a Uranium-Takeover Bid?

By Jim Harding
Originally published in RTown News
November 26, 2010

Let’s look at BHP Billiton in more depth before it disappears from the news. We have learned very little about the largest mining company in the world, whose profits reached $18 billion in 2007-2008. Politicians talked about BHP wanting to be a potash giant, not about it already being a uranium giant.

BHP is upfront about its “core business strategy of diversifying investment across geographies and commodities.” It’s ridden the waves of globalization to mine coal, iron ore, copper, gold and silver as well as uranium. It’s always looking for “tier-one assets”, large, lucrative mineral deposits wherever they exist. It’s eyeballing West Africa and is in joint ventures with Vale of Brazil. Having one-half of the world’s potash reserves, BHP would target Saskatchewan.

But BHP is also aware of the profitable uranium deposits in the north. One executive in a Sept. 21st Star Phoenix story, “BHP Eyes Us”, said that “potash and uranium, probably in (that) order are the ones that interest us...for now…it’s a pink mineral not a yellow element (uranium yellowcake) that’s at the forefront.” But what might the darling of globalization be thinking now that their potash bid has failed?


Uranium barrels at BHP mine, SA.
In the aftermath of BHP’s failed potash bid, Premier Wall was calling for opening up foreign investment in uranium. While he wrapped himself in the Canadian flag when huge potash government revenues were at stake, he seemed disinterested that uranium truly is a strategic resource: it is used to make nuclear weapons. With evidence that depleted uranium (DU), left from enriching Saskatchewan uranium exported abroad, is getting into DU weapons, export controls should be tightened.

But the bottom line is about political and economic power, not international peace and security. Revenue from uranium is a pittance compared to potash and oil and gas, and so Premier Wall apparently has no problem with more foreign uranium companies in the province. Cameco is technically a Canadian company, but like Potash Corp, it exports most of its mineral product to the US and has lots of US shareholders. The French, state-owned Areva is the other main corporate actor in the north. Might Wall see BHP Billiton as a better bridge to the Chinese uranium market with which it already has dealings?


Located 560 kilometres north of Adelaide, South Australia,
 Olympic Dam is a multi-mineral ore body. It is the world's
 fourth largest remaining copper deposit, fifth largest
 gold deposit and the largest uranium deposit.
 It also contains significant quantities of silver.
BHP has sold uranium to the UK, France, Sweden, Finland, Belgium, Japan, South Korea, Taiwan, Spain, the US, and, yes, Canada. Its biggest mine, Olympic Dam at Roxby Downs, has been operating 560 km north of Adelaide in Southern Australia since the 1980’s. Governments here brag that Saskatchewan has the highest percentage, uranium-bearing ore (e.g. McArthur River and Cigar Lake). Australia unquestionably has the highest quantity. The Olympic Dam mine alone has 2.4 million tonnes of uranium, 30 % of the world’s known reserves.

Like Saskatchewan, Australia suffers from the ecological impacts of uranium mining. The planned expansion at Olympic Dam is staggering, on the scale of Alberta’s tar sands. Birds there, too, die after landing in toxic tailings ponds. If BHP gets the go-ahead its open-pit mining will grow to become a 14.4 cubic kilometer wound on Mother Earth. Visualize this carefully: that’s a cut 4.1 km by 3.1 km to a depth of 1 km. Just to remove the biological habitats on top of the ores, the so-called “overburden”, will take five years.


The Concentrator/Hydromet Plant at Olympic Dam
Mine expansion would increase uranium production to 19,000 tonnes a year, and one of BHP’s new big customers will be China. BHP emphasizes this is enough to fuel 95 nuclear plants, and like Cameco and Areva, downplays the ecological and proliferation risks. Australia’s Friends of the Earth (FOE) notes that this much uranium, used as nuclear power fuel , annually creates 2,850 tonnes of spent fuel (nuclear wastes). And this has 28.5 tonnes of plutonium in it, enough to make nearly three thousand nuclear weapons. Everyone knows that the international nuclear weapons inspection system is far from failsafe. To put this in perspective, even if 99.9% of the plutonium is kept out of the weapons stream over the life of BHP’s Olympic Dam, there would be enough plutonium “gone missing” to produce 340 bombs of the kind the US dropped on Nagasaki in 1945.

Producing uranium for one reactor for one year leaves over 600,000 tonnes of tailings waste. Uranium tailings at Olympic Dam are expected to increase six-fold to 58 million tonnes a year. BHP plans to create up to nine more tailings dams to add to the four in place, which would have their heights increased from 30 to 65 meters. Australia has already had radioactive tailings spills or leaks (1994, 2008), as has happened in Northern Saskatchewan (1984, 1989). Increasing tailings enlarges this risk.


Water consumption, which BHP gets free from the Great Artesian Basin, is expected to increase from 37 million to 250 million litres a day, or 170,000 litres per minute. To help meet the growing demand BHP plans to build a 320 km pipeline from a desalinization plant at Point Lowly. According to marine biologists, the increased saline waste will threaten the world’s largest cuttlefish breeding zone.

Electrical consumption is expected to increase six-fold, requiring 775 Megawatts (MW); that’s one-fifth of Saskatchewan’s total electrical capacity, to fuel just one uranium mine. BHP has proposed the use of solar thermal plants to produce some electricity. Think of that: a uranium mine that leaves radioactive tailings and weapons-grade spent-fuel from nuclear reactors, using up all this renewable energy. We clearly need to replace both fossil fuel and nuclear energy with renewables if we are going to get on a sustainable path.

Olympic Dam exposes the uranium industry’s claim to be clean energy. Like uranium companies here, BHP promotes nuclear power as being low-carbon energy. This intentionally ignores mining. But BHP’s mine expansion will increase greenhouse gases to between 4.7 and 6.6 million tonnes a year, which would likely make it impossible for South Australia to meet its 2050 target of 12 million tonnes.


After BHP lost its potash bid it reminded us what we had lost out on. Besides its $8 billion Jansen mine, it would have spent $450 million on exploration and development over 5 years and $370 million on infrastructure. It would relocate 200 jobs to Canada and bring Potash Corp’s headquarters to Saskatoon. It would stay in the Canpotex cartel for at least 5 years and spend $18 million a year on community programs. The sweetened deal sounds enticing until we wake up and remember what BHP is doing in its home country.

Most revealing are their tactics with Aboriginal people, Australia’s Traditional Land Owners. BHP side-steps principled consultation and uses divide and rule, bribery and disinformation. Under the 1982 Indenture Act, the corporation has exemptions or can override much of the South Australian Aboriginal Heritage Act of 1988. Under the confidentiality clause BHP even has veto power over public releases of information.
It certainly seems that we are lucky to not have BHP as a big corporate player here. But, not so fast: as I’ll discuss next time, these divide and rule, bribery and disinformation tactics sound a lot like how the uranium industry and Nuclear Waste Management Organization (NWMO) presently operates in the north. Maybe BHP can help us better see what is happening in our own back yard.

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