urg:::BHP Selling Small Uranium Mine

[Gavin Mudd]

BHP Sells Its Forgotten Mine to go Nuclear Free

By Barry Fitzgerald
Resources Editor
June 20 2002


BHP Billiton has sold its only uranium mine, the in-situ leach Smith Ranch
mine in Wyoming.

It is such a small operation that for a time, at least, BHP Billiton's
senior mining executives did not know the company had it on its books.

That was back in April last year. The excuse for "losing" the mine was
understandable as at the time it had been inherited by South Africa's
Billiton on its takeover of Canada's Rio Algom, all of which was just ahead
of Billiton's merger with Melbourne's "Nuclear-free" BHP.

Billiton's senior minerals executive, Mike Salamon, was not aware at that
April briefing that uranium was part of the copper-dominated assets picked
up with Billiton's 2000 takeover of Rio Algom.

Nothing has been heard of Smith Ranch since. Production in 2001 was 930,000
pounds, making it a small but not insignificant supplier to the power
generation industry.

The operation has been acquired by Canadian uranium group Cameco for an
undisclosed sum. Given the nature of the operation, there is no guarantee
that there was any sale price; an indemnity on future environmental claims
would probably have been enough for BHP Billiton to walk.

BHP Billiton said the sale completed its "exit from uranium production as
part of its planned divestment of non-core businesses".

It remains to be seen whether the "exit" from uranium means BHP Billiton
will be a non-starter in the expected tussle for ownership of WMC's Olympic
Dam mine after WMC's demerger in October or November. Olympic Dam is a
world-scale copper and uranium producer. WMC in its demerged form plans to
expand the operation to make it the world's biggest uranium mine, subject to
a market for the material being found.

At its expanded rate, Olympic Dam's uranium production would be about 20
times that of Smith Ranch.

BHP Billiton faces stiff competition from Rio Tinto and Anglo American for
Olympic Dam, the key asset of WMC's demerged non-alumina group, WMC
Resources.


Copyright © 2002 The Age Company Ltd

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BHP makes U-sale bomb
By Michael Bachelard
20jun02


BHP Billiton has sold its final uranium mining operation, the Smith Ranch
mine and refinery in the United States.

The sale, part of plans to divest non-core assets, comes as the human
resources, venture capital and mergers and acquisitions branches of the
mining multinational's Melbourne head office are thinned out by a new wave
of redundancies.

Rio Algom, a BHP Billiton subsidiary, sold the mine in Wyoming to the
world's No.1 uranium producer, Cameco Corp of Canada.

The price was undisclosed, but Cameco chief executive Bernard Michel said in
a statement: "These are the right assets in the right place at the right
price.

"We are obtaining these assets at a time when the uranium price is low, but
on a rising trend."

A BHP spokeswoman said: "It is a very good, performing asset, but it's
non-core - we don't want to be in uranium."

The mine was acquired by Billiton in 2000 as part of its acquisition of Rio
Algom and before the merger with BHP.

Cameco said the mine had probable uranium reserves of 27 million pounds, and
it produced 930,000 pounds last year.

As part of the deal Cameco buys $10.7 million of uranium inventory from BHP,
and picks up a $19.7 million liability for decommissioning the mine.

Smith Ranch is less than 5km from another Cameco facility, and they share a
common border. Cameco expects to achieve efficiencies from their proximity.

Sources in BHP head office said yesterday a new round of redundancies was
thinning the ranks of the 700 Melbourne-based staff.

Mergers and acquisitions chief Anna-Lou Fletcher is understood to have had
her job cut as the company moves on from the merger to try to bed down the
new structure and culture.

Any tidy-up merger work will be overseen by chief development officer and
board member Chip Goodyear.

The human resources department is also under the gun, with the office of
vice-president in charge of HR, Ian Fraser, to be "sorted out" after the
merger.

The company's venture capital branch will also be axed as part of a
previously announced clean-out orchestrated by incoming chief executive
Brian Gilbertson.

Mr Gilbertson announced the 100 redundancies late last month, along with the
sales of two corporate jets and a helicopter, as part of the company's
commitment to a $500 million cut in costs by 2005.


© News Limited 2002 - www.theaustralian.news.com.au