As I've discussed before, the uranium mining business has some unique global challenges.

Namely, that the industry cost curve is much more warped than for any other metal.

Worldwide, there is exactly one low-cost centre for producing primary uranium: Canada's Athabasca Basin. Looking at some recent numbers, it's easy to see why this locale beats every other spot on Earth. Last month, developers Fission Energy announced further drilling results from their Patterson Lake South property--showing remarkably high grade uranium intercepts, such as 38 metres grading 13.66% uranium oxide.

That grade is higher by orders of magnitude than for other projects being developed globally. We simply haven't found another place with the gifted uranium geology that Athabasca enjoys.

So how might this play out from an exploration standpoint? Is there little hope for creating new projects outside Canada?

News last week suggests there may be a potential alternative strategy in sourcing economic uranium mines in places like Africa. By producing uranium along with other metals.

That's what operators Barrick Gold are moving toward at their Lumwana Mine in Zambia. Where uranium is found in association with copper that is the primary mining target at the site.

Zambia's Minister of mines and energy has been reporting on development at the new copper project, according to local press. With the Minister noting that potential uranium production here is shaping up--with 5 million tonnes of uranium-bearing ore having been stockpiled so far at the site.

Barrick isn't yet processing uranium here. The major is reportedly waiting for the Zambian government to provide policy guidance for production of this potentially-controversial metal.

But previous feasibility studies at Lumwana showed that the mine could produce up to 2 million pounds a year of uranium, alongside copper output.
Such a situation might be a winning strategy in addressing the topsy-turvy uranium curve. Production of copper would help pay operating expenses, potentially making Lumwana an affordable uranium producer despite lower grades.

Such "by-product" strategy is what makes big uranium mines like BHP Billiton's Olympic Dam project work. Given the oddities today in uranium, we may see more such developments popping up.

Here's to getting it how you can,

By Dave Forest

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