Less than a week after BHP Billiton announced that it would shelve the $20 billion expansion of the Olympic Dam project in Australia, the company announced that it had agreed to sell the Yeelirre uranium deposit in Australia to Canada’s Cameco Corp for $430 million.
The move marks another sign of BHP’s doubts about the future of uranium demand in the wake of Japan’s Fukushima disaster, Reuters reported.
“We can’t pursue all of the growth operations that are before us, and we need to develop the ones with the best returns,” said BHP spokesman Antonios Papaspiropoulos.
BHP had been looking to dig 90 kt (99,000 st) of uranium from the Yeelirrie deposit in Western Australia, one of Australia’s largest undeveloped uranium lodes.
Cameco, one of the world’s top uranium producers, is already active in Australia, working on 20 exploration projects and looking to develop the smaller Kintyre deposit in Western Australia.
A recent study put measured and indicated resources at Yeelirrie at about 139 million lbs of uranium oxide with an average grade of about 0.13 percent under Australia’s reporting rules.
Cameco said the historic estimate “may be overstated by approximately 10 percent ” adding it would review the estimate to meet Canadian requirements.
“Yeelirrie represents an attractive deposit that fits well with Cameco’s vision and corporate strategy,” Cameco CEO Tim Gitzel said in a statement.
The acquisition is subject to approvals from the Australian Foreign Investment Review Board and the state of Western Australia.