Hundreds of workers building and operating a uranium mine and mill 25 kms south of Alice Springs would live in the town, according to Rick Crabb, chairman of Paladin Resources.

The NT Government last week gave approval to Paladin and its partner, Cameco, to apply for an exploration license.

Up to 50 people would be engaged in the proving up of the deposit, known as Angela and Pamela. If that work results in a mining approval, some 500 to 800 people, half of them potentially local contractors, would be engaged in the construction work. Mr Crabb expects this would take a year and a half. And some 200 people would be employed to run the mine and mill, expected to have a life of 10 years on presently known deposits. These are worth $2.5b, and there is a strong possibility of further discoveries.

The deposit was discovered some years ago, before the meteoric rise of yellowcake price. Mr Crabb says the mill may also be used by other uranium producers likely to mine in Central Australia: 'There are a number of other players who have got quite good prospects.

'It could be the start of a whole new Alice Springs based uranium industry.'

Chief Minister Paul Henderson described the project as 'a huge stride toward potentially billions of dollars worth of economic opportunity and jobs for the Territory' at a time when 'in the face of climate change, the world is seeking clean energy solutions'.

Paladin is a Perth based company, has two uranium mines in Africa, 40,000 shareholders and a market capitalization of $3.7b. Cameco is the world's largest uranium producer, accounting for 20% of world production from its mines in Canada and the US. 'Our leading position is backed by 500 million pounds of proven and probable reserves and extensive resources,' says the company. 'In the past five years, Cameco generated more than $1.4 billion in cash flow.'

The Angela and Pamela project has come under fire from local environment groups. Natalie Wasley, of the Beyond Nuclear Initiative, says the deposits 'are within our water catchment, less than 10 km from the proposed new drinking water borefield.

'In-situ leach mining, possibly to be used, involves pumping acid into groundwater to dissolve the ore.'' 'The ISL mine at Beverly, SA, disposes of contaminated waste water directly back into the aquifer.'

The mining company strongly refutes these assertions. Says Paladin's Brendan O'Hara, who is in charge of special projects: 'There is no basis for this statement. 'On the information we have we are of the view that In Situ Recovery is not appropriate for the extraction of uranium from the Angela and Pamela deposits.' Wasley: A shallow open pit mine risks surface water contamination from tailings and release of radioactive radon gas. O'Hara: This issue will be carefully managed (including the use of hydrogeological studies) so that there will be no contamination of the current or future drinking water of Alice Springs.

Mr Crabb says Paladin has an 'immense amount of experience' in environmental issues. Its mine in Namibia is in a very dry environment, similar to Central Australia. 'There is a barrier to that aquifer and the mining will not breach this barrier. 'We are going to mine an existing ore body and will not be going beyond it.' Mr Crabb says if the ore body were connected to Alice Springs' water supply, then radioactivity would show up now in the water. 'We're talking about a radioactive ore body. 'It's existing material which we are going to mine. 'If anything we're going to remove the problem.'' These concerns are 'a complete red herring'.

Ms Wasley also claims that 'mining the small uranium deposits at Angela-Pamela would be short term, with minimal infrastructure and job opportunities'.

But Mr O'Hara says the development could bring a number of significant economic benefits, including opportunities for Indigenous business, support for existing local businesses and employment. He says: 'It would typically take at least $200 million to develop a mine for this type of operation and half that much in annual operating costs. 'It is important to us that we consult and work with the Alice Springs community as we go along to ensure that the community derives the full benefits from our operations.'

Mr Crabb says the company is 'very conscious' of the need to build workforce skills. Malawi, where Paladin has a mine, 'is a very poor country. 'We balance imported skills with local training, using our mine as a nursery of skills. 'We can take the same approach with the Pamela and Angela project.'

Mr Crabb says there is a 'misconception' that the product, U3O8 is highly radioactive. 'Radioactivity of the yellowcake, which is in sealed drums and stored in containers, increases when it is processed further, which is done overseas, in a handful facilities in the USA and Europe." A pound of U3O8 yellowcake was worth $8 in 2001, rose to $140 in 2007 and is now worth $75.

YELLOWCAKE

Paladin says there are 439 reactors producing 16% of the world's electricity requiring 173 million pounds of yellowcake. There are 33 reactors under construction in 13 countries. There are plans to build 316 further reactors by 2030 with a generating capacity almost a great as the total capacity today. The proposed mine near Alice Springs would be initially open cut but soon move into an underground phase. The size of the open cut 'is yet to be determined,' says Mr Crabb.