Mary Kathleen Uranium :

A Deadly Metaphor

Extract from Roger Moody's "Plunder!" (1991),
a global look at RTZ's activities worldwide.

One of the oldest uranium mines in the world (although it was put on standby between 1963 and 1974) (1), MKU is a metaphor for the uranium industry itself. Discovered in the heyday of "wildcat" exploration, when - in the USA and Australia particularly - it seemed as if a lucrative yellowcake lay behind each outcrop and under every boulder in the desert, the mine was named after the wife of one of two taxi drivers who came upon the lode in the Mount Isa mining region of Queensland, while trying their hand at weekend prospecting (2). Mary Kathleen had herself died of cancer two weeks before the discovery (2). Thinly bedded, and lying within Middle Proterozoic sediments (3), the mine had an average ore grade of 0.117% U308 (3) or 3lb. per tonne (4). In April 1953, after the joint US/British uranium-seeking task force, the CDA (Combined Development Agency) (5), came to secure Australian uranium for US and British nuclear weapons (it had already secured South African supplies) the Australian Atomic Energy Commission (AAEC) was established and immediately took control, both of the MKU deposit and the Rum Jungle mine (6). The Consolidated Zinc Company took over management of Rum Jungle, through Territory Enterprises Pty Ltd, and a little later, the British Rio Tinto Company, bought into the project. MKU's first Australian managing director was recruited directly from Con. Zinc - thus presaging the merger (in 1962) of the Australian and the British company into Rio Tinto Zinc (RTZ) (7).

During the 1960's, both the US and British weapons programmes were cut back as the "cold war" thawed, and in 1966 the US imposed a ban on imports, to protect domestic producers (6). Between 1961 and 1964, all mines in Australia (MKU, South Alligator River, and Radium Hill) were closed, except for Rum Jungle, which was dismantled and sold in 1971. Exports ceased in 1965, when 7,600 tonnes of uranium had been mined (6). Between its opening in 1953 and closure on a care-and-maintenance basis in 1963, MKU had produced just over 4,000 tonnes of U308 (1) - just over half the total Australian production to this date - although MKU itself had 70% of the country's low-cost proven reserves (6). The main customer for this uranium was the British Atomic Energy Authority (UKAEA) (8).

In 1967, the Australian Minister for National Development initiated a commercial export policy, leading to the extraordinary, massive uranium discoveries of 1970 onwards (9), in particular the Ranger deposit in the Northern Territory.

Although between 1967 and 1974, MKU had discovered no substantial new reserves (8), it nevertheless obtained sales contracts for nearly 5000 tonnes of U308 (4743 tonnes) between 1976 and 1982 (8). In 1982, however, the Australian Labor Party came to power, and - thanks to its initial anti-uranium policy - a ban was instituted on new export contracts, although existing contracts were honoured (9). Indeed MKU was to be the main interim supplier of outstanding deliveries to foreign customers, until the Ranger mine came on stream in October 1981 (9), and when the Australian government announced the public sale of its 50% share in Ranger in 1979, MKU also "threw its hat into the ring" as the Financial Times graphically put it (42).

The revival of MKU had been made possible by a share issue in 1974, underwritten by the AAEC, which then took 41.64% of the interest in the company (11) after the Australian public only bought up 7% (12). Although the Liberal government on several occasions said it wanted to sell this interest (1), (13), there were no takers.

In addition to the share issue, NMU had to raise emergency funding to cover losses in its first couple of years of re-opening. Although MKU held five contracts to supply nearly 5000 tonnes of U308 (as already mentioned) - of which 1130 were to be sold at world prices, and the remainder at fixed prices (17) - recommissioning costs, production and maintenance costs had been well above those originally estimated, and there were severe delays caused by trade union action (see below). By the beginning of 1977, MKU reported that it required some A$12 million - a figure which would normally spell the doom of a minor producer in such a fluctuating market (17). In the end however, thanks to the support of the Federal government through its AAEC stake, CRA was able to extend its financial arrangements, increase its credit facility (18) and raise an additional A$20 million after negotiations with its Federal partner: CRA to provide the majority of the funding (19).

This transaction caused a storm of Opposition protest in the Australian parliament. Tom Uren, the deputy Leader of the Opposition - and a staunch opponent of uranium mining - accused both AAEC and CRA of keeping the mine open to suit their own purposes. CRA, said Uren, had to meet existing contracts, and bypass the Federal government's restriction on foreign equity (CRA being majority owned by RTZ until long after MKU was closed down, though Uren was mainly referring to CRA's campaign to take over the AAR coal project in central Queensland). And the Federal govemment wanted MKU to provide the cutting edge of their stand against unions opposing export of yellowcake, using MKU as a precedent for going ahead with Ranger (20). Uren claimed that MKU was losing money at the rate of $16 million a year, and that it would have to conclude contracts to sell uranium at $46 a pound to make the mine viable (20).

In fact, MKU lost "only" $5.4 million in 1977, and by then was claiming it had renegotiated better contracts at higher prices, and with new delivery dates (21). During that year, it also repaid the outstanding balance of uranium which it had borrowed from the British AEA (UKAEA) to meet its contract obligations (22). The uranium - some 45.4 tonnes for delivery to Commonwealth Edison Co in the USA (23) - was finally sent to the USA in July 1977 on the S.S Columbus (24) - a delivery which enabled the Federal government to set a precedent: borrowing from overseas sources to bulwark an industry already under severe threat from trade unionists and dock-workers.

All prices were set on an annual basis, but due to the losses sustained by the mine and delays in deliveries thanks to union action, renegotiations occurred which reduced the total to 4473 tonnes by 1976 (1) - leaving, it may be noted, around 1200 tonnes of uranium still in the ground at MKU in the form of reserves (26). New sales were negotiated in early 1977 (27), but it is not clear (at least to this author) whether these were to additional customers, or extensions of the contracts concluded before 1972.

MKU operated at a loss for its first two years, only returning to profit in 1978 and 1979. By 1981 it had repaid its outstanding debt to CRA and its first dividend to the AAEC since 1964 (28). Production in 1979 was 832 tonnes, and slightly more the following year, despite a drop in world uranium prices (29). In 1982, the mine delivered a record 859 tonnes (30), (31), when its outstanding contracts to Japanese utilities officially stood at 337.9 tonnes, and permission was sought from the Federal government to send uranium to UF6 conversion plants in both France and Canada ahead of schedule (32). The Federal govemment - at least initially - resisted this move, stating that it did not want Australian yellowcake leaving the country until the floor price rose above A$35 per lb. (12).

In October that year, the mine finally closed down, leaving a stockpile of 473 tonnes which, it was envisaged, would take two years to shift (33), (34), and repaying a profit to the company of just over A$10 million (30). In the event final deliveries were not made until 1985 (35), (36). "Phoenix-like" as the Mining Journal put it, the company continued to send out its deadly little consignments, some time after "final" delivery dates had been announced (37).

While the company for a long time prospected on other leases in the Mount Isa region, it never came up with any significant new discoveries (1). MKU carried out research into rare earth production in the late 1970's, after building a pilot rare earth plant. However, there was trepidation about building a full-scale plant and the company frankly admitted doubt "that markets sufficient to achieve an economic return will be found" (14). Its pessimism appears to have been justified.

MKU also entered Joint Ventures after its recommissioning: notably one with Agip Australia, prospecting in two areas of Mount Isa, Spear Creek and the Calton Hills (38). At another prospect in the same region, it joined up with Sturts Meadows Prospecting Syndicate NL (39), but once again no significant reserves were located (38), (40).

$15 million was also set aside to investigate the Doreen Elaine uranium deposit close to the MKU site, and evaluate (among others) deposits at Westmoreland, Walhalla, Skal and Andersons' Lode. Discussions were held with Queensland Mines about treating that company's ore, and one uranium company (unnamed) was said to have offered MKU some of its own leases, if RTZ itself could arrange contracts for 3000 tonnes of uranium. (MKU in the late 1970's had also tried to buy the AAEC's 2000 tonne uranium stockpile to have it sold on the world market through RTZ) (12). All exploration was cancelled by 1982 (41).

During its last ten years of "life", MKU's chequered history was distinguished by three events which guarantee its place in history, despite the greater economic significance of other mines. The first was the leaking of documents from MKU which served to blow the lid on the famous (and infamous) uranium cartel. Friends of the Earth in Melbourne (FoE) in April 1976 received a brown paper parcel - left by person or persons unknown on its doorstep - which contained hundreds of letters and documents concerning a "club" set up to apportion contracts to the uranium market and secure the position of certain producers. FoE duly returned the originals to MKU, but not before copying them, and sending items both to the press and Westinghouse,the corporation whose supply contracts had been mainly jeopardised by the operations of the cartel (2).

Among the package was a letter from the General Manager of MKU to the head of CRA's Corporate Relations department, dated March 12th 1975, expressing deep disquiet about media exposure to the dangers of uranium, which the industry could not "effectively combat", and which both the AAEC and AMIC (Australian Mining Industries Council) could not, or would not, oppose. The company wanted recruitment of "suitable academics" on the devil's side; but by June 1976, another letter reveals little change had taken place (43).

In 1979, a default judgement was entered against MKU in a US court, hearing the claims made by Westinghouse against the RTZ group (including MKU) and other companies: MKU counter-claimed that the judgement could not apply in Australia (44). Finally, in 1981, the companies involved in the cartel settled out of court. Of the $34 million paid to Westinghouse, CRA footed the largest single bill ($2.6 million), and MKU had to pay a mere $870,000 (45).

MKU's contracts, approved in 1972 or earlier, were as follows :

Theft of Yellowcake

Another memorable event (though the company tried to minimise it) was the theft of two tonnes of yellowcake from the mine by "persons unknown" in 1980. It was transported out of the mine in six drums and later found in Sydney (46). RTZ's reaction was perhaps even more remarkable than the theft itself. Through its in-house magazine, Spectrum, the company blithely dismissed the affair as a peccadillo, if not a prank: "The theft... must have caused a few red faces in the company... and a few raised eyebrows in more nuclear-minded countries. However, there is not much one can do with a few tonnes of yellowcake when there is no market for the stuff in Australia and all the necessary facilities are overseas. Yet, if the material was indeed appropriated by an employee, it's no different in principle from someone taking home office stationery for his personal use" (47).

Now read that again! The main mouthpiece for (at the time) the world's most important uranium producer and marketeer, was indeed saying: i) the matter was mainly an embarrassment to MKU - let's minimise the egg on their red faces as they're liable to turn into an omelette on their own; ii) it was only a minor sin ("We only blew off their heads with a pistol m'lord, and not a shotgun") - despite the fact that the thefts had been going on for some time, other amounts may have gone missing, there was no adequate accounting system for such "losses", and the Israeli govemment was prepared to risk the lives of many, the expenditure of millions of pounds, and its international reputation to pirate a cargo of yellowcake, only thirty times larger, in the 1960's (2); iii) since no one is actually using yellowcake on our home territory for nefarious purposes, there is no problem in locking the stable door after the horse has bolted - regardless of the fact that the drums appeared destined for a major port, and of course Pakistan and Israel - among others - already possessed the facilities to enrich, and probably to hex any yellowcake for whatever purposes they chose.

Campaign Against Exports

Lastly, a true peoples' history of nuclear power may one day recount the resistance to exports of MKU uranium ("legitimate" this time) as being more important than anything to do with the mine itself.

What were termed by the Mining Journal (34) "a number of problems due to opposition and obstruction", soon became a real threat after 1975. In April 1976, a national strike by railway unions had temporarily stopped the export of MKU uranium (10).

The Australian Council of Trade Unions (ACTU) called for a ban on the export of uranium in 1977 - though this was never acceptable to some unions (48). This followed an important action by anti-uranium activists in Townsville in late 1976, when the first secret shipment of 130 tonnes of U308 from the revived mine was delayed by about thirty demonstrators for an hour, as it was shunted along the railway line from Mount Isa (49).

Actions against MKU exports built up over the next four years, with the powerful Seamen's Union imposing a blockade. (A demonstration by 200 activists at Mount Isa in 1978 also elicited the support of a few MKU miners themselves) (50). In 1981, after the company was suffering heavily thanks to delays in shipments (52), and forced to export secretively using a small fishing wharf and scab labour (51), a Federal Court ordered the Seamen's Union to refrain from any further actions impeding uranium transportation. The judge, Justice Morling, ruled that MKU was suffering "a grievous loss", running to several hundreds of thousands of dollars. Morling referred particularly to union action against seven containers of uranium, due to be shipped out of Brisbane on June 16th 1981, on the "ACT 4" but which did not depart until June 19th, when the ban was lifted. At that point "agents for shipping companies indicated that they are not prepared to accept further bookings for MKU until there is a clear indication of a change in the respondents' policy to the export of uranium" (53).

When the mine closed in 1982, NKU had produced around 9000 tons of U308 in its 26-year history - and 31 million tons of rock (3500 times as much radioactive rubbish as uranium) (54). It left a "conical hole about 250 metres deep, four kilometres wide at the top and about 100 metres across at the bottom" (12). Work started on so-called "rehabilitation" of the mine site in 1983, with a provision of A$17.7 million to complete the task and make the area supposedly "safe" (34). By the end of 1982, only just over A$2 million had been spent on the work (34), but within the next two years, the total came to more than $A12 million, and an additional $2,300,000 was provided in 1984 (35).

This paltry provision - heavily criticised at the RTZ annual general meeting in 1985 (55) - was agreed with the Queensland state government (hardly the most stringent of environmental protection agencies), "so that all areas can be restored to a safe and useful condition consistent with future land use in the area". The "major aspects" of the rehabilitation plan were: selling off appropriate equipment (and burying contaminated items - a measure which seems to have been completed fairly satisfactorily in early 1983) (56); selling off most buildings and all houses (these sales brought in A$3.4 million) (57), and clearing the area of debris, burying all contaminated materials and tailings in a secure dam and covering with mine waste; leaving the pit in a stable condition inaccessible to vehicles; revegetating all affected areas using "local species", and monitoring surface and underground water "...until the end of 1985 at least" (58); and flooding the pit (12) partly with groundwater from the evaporation ponds and tailings dam (56).

Failing an on-the-spot report from the site over the last couple of years, it is impossible to tell exactly how far this work has been implemented. The company claimed that access was cut off and waste sites stabilised and revegetated as early as 1982 (59). Contouring and covering work on the tailings dam was in progress by that date - and the "major part" had been successfully completed (claimed MKU) by the end of 1984 (35). The evaporation ponds appear to have been dried out by this date too - with the precipitate and contaminated soil removed to the tailings dam (35).

But the most controversial and dangerous aspect of the rehabilitation scheme concerned (and still concerns) the method by which it was proposed to neutralise radiation from the tailings dam itself. It was clearly intended to be the omnibus "dump" for everything that could not be neutralised elsewhere, or removed from the site.

In 1978, the US Congress had passed the Uranium Mill Tailings Radiation Control Act (UMTRCA) intended, not only to safeguard against radiation from existing uranium mines, but also to clear up the huge legacy (of more than 100 million tons) from dormant mines (60). The essential recommendation of this Act was - to quote the NRC (Nuclear Regulatory Commission) Commissioner, Victor Gilinsky - either to bury the tailings on site in the mine workings, or in a surface dump covered with one foot of clay, followed by "at least five feet of earth appropriately contoured and planted to minimise the effects of water and wind erosion" (61). As reported in the revered US magazine. Science, at around the same time "a tailings pile may exhale radon gas at up to 500 times the natural back-ground rate... tailings... contain large quantities of thorium-230 [and] the half-life of thorium is 80,000 years" (62).

At its annual general meeting in 1985, the RTZ chair confessed complete ignorance of the existence (let alone the provisions) of the US Mill Tailings Act (55). And, despite full knowledge by the Queensland state government of the maximum radiation levels recommended by the US government, some three years before it approved the MKU rehabilitation scheme (details of a US Nuclear Regulatory Commission report recommending limitation of radon emissions to two units had been included in a Queensland Health Department report to the state government, made before the rehabilitation plan for MKU was approved), the Bjelke-Petersen regime approved a plan which would permit 18 units a metre per second radiating from the MKU tailings site (63), (Incidently, the Queensland Health Ministry report also referred to Canadian government recommendations on limiting the level from 2 to 10 units, and a US EPA report advising a 5-unit maximum) (63).

Environmentalists were alarmed early in the day by the MKU "rehabilitation" plan - a letter from the Federal Government's Uranium Advisory Council, L.R. McIntyre to the Trade and Resources minister, Mr Anthony, in 1980, had spoken of "operational problems" at the mine, seepages from the tailings ponds, and warned of the danger of "...another Rum Jungle situation [occurring] at Mary Kathleen" (64). (see CRA)

The MKU plan has consisted quite simply of cutting corners, and saving cash: instead of the clay/soil covering advised by US Regulatory control experts and employed elsewhere, the company has covered the tailings with rock mixed with soil taken from the MKU site itself. To get sufficient clay to adequately neutralise the tailings, the company claimed it would have to strip and revegetate a large area in the region, or else import the material (64). A spokesperson for MKU, Mr Terry Ward, has been quoted as saying he did not believe rainwater seeping through the rock covering "would cause any problem" (64). Moreover, instead of neutralising the liquid already within the tailings ponds, by dosing it with lime (the normal practise), Mr Ward and his engineers decided simply to dump the liquid in trenches, sinking a bore further down the water course to tap any water which risked contaminating farmland and waterholes further downstream. The Melbourne Age on October 9th 1982, carried a photo of Mr Ward drinking water from the outlet of this bore, to prove its potable qualities. (Perhaps, like many proponents of radiation in the 1930's, Ward also believes in its medicinal dualities (65), although there is no indication that, in recent years, Mr Ward has regularly taken to supping the spa waters of Mary Kathleen, or that the company has been marketing this unique source of prophylactic around the world).

And so the Mary Kathleen saga came to an end - though not a happy conclusion so far as local land-users are concerned, nor the rest of a world potentially affected by the military usage of the uranium produced by this Australian pioneer. The last irony of the story is perhaps the most unforgivable. When MKU was officially closed in 1982, twenty journalists invited to the scene were given copies of a pamphlet entitled "Nuclear News". Referring to the effects of the Hiroshima and Nagasaki bombs - the publication vaunted the "good news" that the effects of radiation could now be gauged by studying human, as opposed to animal victims - and that "there appears to be considerably less ... genetic damage from radiation than had been thought" (12).

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