The big surprise, over the past week, was not that Cigar Lake would be further delayed.  It was that the market initially accepted the most recent prorogation with a yawn.

In the wild and wooly world of uranium exploration and mining, the safest bet is seemingly against future uranium production. For one reason or another, most future mining is likely to encounter delays, stalls or stops. Too much water, too little water, politics, greenies, economics, indigenous tribes, desalination plants, NGOs, camel trails, regulators and rebels are but a few of the land mines analysts face when hoping to forecast long-term uranium price peaks.

Ask AREVA about Australian aborigine Jeffrey Lee who is ‘not interested in money.’ Lee is the guardian over the Koongarra uranium deposit in Australia’s Kakadu National Park. AREVA hoped to mine 14,000 tonnes of uranium on the land Lee inherited. They’ll have to wait until – maybe never. Lee won’t sell out because he likes fishing on the land.

Energy Resources of Australia escaped a disastrous first half by processing high-grade stockpiled ore. Water levels in the company’s open pit at their Ranger operations remain a problem at one of the world’s largest uranium mining operations. We wonder if another cyclone could strike again soon after the pit is drained.

Although uranium is abundant on planet Earth, extracting economic yellowcake deposits can be rife with booby traps. An on-time project, which actually mines the forecasted production on schedule, is the exception which confirms the rule.

It is one thing to study spreadsheets and stock charts, and quite another to get one’s hands dirty 400 meters below.

Take a closer look at Cameco Corp’s Cigar Lake mining project. Minority partner AREVA has an excellent animation of the jetboring mining technique, which is expected to be used to mine the Cigar Lake uranium deposit.

When you watch this video, you may be reminded of a root canal. One could ponder whether or not jetboring was invented by an endodontist. Mining Cigar Lake with this method is on the order of drilling out dental pulp.

Investors could also reach the conclusion that this technique might be done on shaky ground. After all, the Cigar Lake uranium deposit is wedged between softer sandstone (above the deposit) and harder basement rock (below the deposit). Freezing the ground with large diameter pipes filled with brine takes about one year.

The entire mining process also takes place deep beneath a lake in northern Saskatchewan.

Although this is one of the richest uranium ore bodies in the world, descriptions of mining Cigar Lake are nearly always accompanied by the word, ‘challenging.’ We have been warned that last October’s mine flooding won’t be the last episode to expect. Since then, Cameco Corp has announced two delays in completing the dewatering process. In each incident, the mining experts have been surprised by one development or another.

On a positive note, Cameco, AREVA and their minority partners are not going to walk away from a multi-billion dollar uranium deposit. For a few years to come, the question won’t be if Cigar Lake proceeds, but when uranium would actually be mined there. One wag suggested Cigar Lake could someday become an open pit mine.

Speaking of an underground mine, which hopes to become an open pit in a few more years...

The postal officer delivering mail in Roxby Downs had been living in a tent until last month. He was recently upgraded to a converted shipping container in somebody’s back yard. But, he’s still happy – he gets a six-figure income to deliver the town’s mail.

While much of the United States and parts of Europe fear a deepening housing crisis, Roxby Downs has become a booming mining town. Lucrative mining salaries are attracting Australians from nearby cities to capitalize upon one of the most ambitious construction efforts in modern day mining. Median housing prices have doubled over the past five years. The town’s population is expected to double again as BHP Billiton hopes to create the world’s largest open pit uranium mine at Olympic Dam in South Australia. Although the town’s population stands at a bit more than 4,000, reports suggest that up to 10,000 workers could be required for this construction effort.

We previously covered the probable timetable for Olympic Dam’s expansion in our Uranium Outlook. Once completed, many analysts and industry insiders believe sufficient uranium could be mined at Olympic Dam to continue fueling the global nuclear renaissance without future fretting about mine floods or cyclones. (Well, at least China and a few lucky utilities are likely to become the big winners.)

But as outgoing chief executive Chip Goodyear recently told a British newspaper, “Just when things are looking good, you get hit by a truck.”

The Olympic Dam Expansion (ODX) is still searching for its Chief Geologist and Engineering Manager, among other jobs BHP Billiton hopes to fill to move the expansion forward.

About 550 BHP Billiton workers and contractors are now developing the company’s pre-feasibility plan to expand Olympic Dam. The size of this project could appear to rival building the Egyptian pyramids or the Great Wall of China. At least one expert we interviewed explained that one would be able to see the Olympic Dam crater from the moon.

But this project is also accompanied by a $5 billion price tag.

In the midst of BHP’s problem of building sufficient housing for its burgeoning workforce, the company suggested Option B to the South Australian government late last week. It is one way of cutting back on the pricey capital expenditures. And this option was floated before the protracted and meticulous pre-feasibility study had been completed.

Reactions to the proposed alternative by Australia’s politicians ranged between shock and horror.

BHP’s alternative mining and processing plan would significantly reduce the operation's labor force. South Australia’s royalty on the operations could also suffer. According to an Australian newspaper, this would reduce 300,000 tonnes of smelting capacity, which would become China’s problem.

But the company would still need up to 10,000 workers to move about 3 cubic kilometers of overburden to create the proposed Olympic Dam open pit mine. That’s a lot of rock.

BHP’s drilling, which continues to define the Olympic Dam resource, is reportedly the world’s largest such program.

An enormous amount of electrical capacity would be drawn from the South Australian grid to accommodate this expansion. Presently, Olympic Dam draws about 10 percent of the state’s base load from the grid to sustain the current operations. Once the new complex comes online, electrical demand to power Olympic Dam could run more than 30 percent of the present base load – about 400 MW.

Exporting the ore to China might shave about 60 MW from the overall electricity demand.

Natural gas is expected to provide power for this electricity, but in a previous article we pointed out that Alcoa’s Western Australian operations might suffer from a natural gas shortage for the company’s three alumina refineries. These refineries produce about 13 percent of the world’s alumina.

One primary element which could hinder Olympic Dam’s expansion is water demand. BHP contends that an additional 120 megaliters of fresh water would be needed each day to sustain the expansion project.

A coastal water desalination plant needs to be built. This would be a joint venture between BHP Billiton and the South Australian government. The state government has pledged $160 million to build the plant. BHP may have to spend another $400 million to construct a pipeline from the plant to Olympic Dam.

Environmentalists have already stepped up their campaign opposing the $300 million desalination plant. Flinders University Professor Peter Fairweather, a marine ecologist, said the hypersaline wastewater from the desalination plant would turn the upper areas of Australia’s Spencer Gulf into ‘something like the Dead Sea.’

According to BHP Billiton, the desalination plant would draw nearly 500 megaliters of salt water every day and return a brine stream back to the gulf which would contain a salt content about 50 percent higher than the surrounding water. Annually, the desalination plant would dump about seven million tonnes of salt into a shallow, 18-mile wide gulf.

Much remains to be resolved about the Olympic Dam expansion project. Although we believe the project will go forward, it is doubtful BHP Billiton will come online on time.