Janine ErasmusSouth African gold mining companies may soon be adding to their bottom line with the processing of uranium reserves found in tailings dams and mine dumps.In South Africa uranium is produced as a by-product of gold and copper mining by major mining companies such as Harmony, Gold Fields and AngloGold Ashanti. The sought-after radioactive metal is used mostly for nuclear weapons and nuclear power stations, but it has other uses, such as radiation shielding and the production of radioisotopes for medical purposes.Uranium is in an ongoing bull market, mostly because of rising demand for it as a nuclear fuel in the light of the global warming threat. With the metal currently trading at around US$90 a pound, local mining companies that hold uranium assets – particularly Harmony, Gold Fields, DRDGOLD and AngloGold – are delving into utilising these assets, by selling them, developing them with a partner, or processing them outright, whichever option yields the most value for the company.Whether in a mine dump or a slimes or tailings dam, there are substantial deposits of uranium that have accumulated over a period of years and which are in a position to be exploited. There is, however, a difference between uranium extracted from the leftovers of gold mining and uranium that is mined from uranium-bearing ore in a dedicated uranium mine. The former is of a lower grade, but it is still a valuable resource.In a declaration published in July 2007 Harmony, the world’s fifth biggest gold producer, announced that out of more than 50 of its tailings dams, in five dams in Randfontein there are 360 million tonnes of slurry containing 79 million pounds of uranium oxide concentrates (chemical formula U3O8); and in six dams in the Free State, there are 190 million tonnes of slurry containing 30 million pounds of U3O8.Harmony’s former chief executive Bernard Swanepoel said, in the same declaration, that “the results of our uranium deposits prove to be worthwhile to proceed to feasibility study stage”. The company will declare its uranium reserves for the first time in its 2007 annual report.Harmony has just announced an agreement with South African investment house Pamodzi Resources Fund, transferring certain of the uranium and gold assets held at Randfontein into a new company, provisionally named Newco. The sale of the Randfontein uranium assets is expected to realise US$252 million (about R1,6bn), with Harmony retaining a 40% shareholding in Newco.Gold Fields, the world’s fourth biggest gold producer, holds major uranium oxide resources at its Beatrix plant near Virginia, the Free State province’s third-largest town. It also envisages substantial returns from the processing of uranium in its slimes dams. The company also has another major uranium asset, a large underground ore body known as Beisa. Gold Fields has an estimated 30 million tons of uranium reserves at Beisa and in its dams.The world’s third biggest producer of gold, AngloGold, produces U3O8 in the form of a powder as a gold mining by-product. AngloGold also owns and supplies the Nuclear Fuels Corporation of South Africa (Nufcor SA), which was established in 1967 in Johannesburg to process and market uranium concentrates for nuclear power generators around the world. The company is said to be considering the sale of its slimes dams, as well as Nufcor International Ltd, the UK-based sister company of Nufcor SA, which AngloGold co-owns with FirstRand Limited, one of South Africa’s largest banking groups. No decision has yet been made.Uranium averages about 2.8 parts per million of the earth’s crust. It can be found in trace quantities just about everywhere on earth – it is more abundant than gold, silver or mercury, about the same as tin and slightly less abundant than cobalt, lead or molybdenum. Concentrated uranium deposits are found in various countries, and vast amounts of the metal occur in the oceans, albeit in lower concentrations.Uranium is sold only to countries which are signatory to the Nuclear Non-Proliferation Treaty, and which allow verification of this principle by international inspectors.According to data compiled by Ux Consulting, an agency that monitors trends in the nuclear industry, the spot price of uranium began to rise in the middle of 2003. It has continued to gain, reaching an all-time high of almost $140 a pound earlier in 2007 before falling back to its current price.However, Gold Fields CEO Ian Cockerill said recently that three-figure uranium prices are not sustainable, so in the long term it is unlikely that they will change much in an upward direction. However the processing of uranium found in mining waste could still contribute to the profitability of gold mines.