Dark Star

It reads like an airport thriller: brilliant if obscure young scientists, the descendant of slaves who left academia to become one of the world’s most powerful politicians, a treaty covering nuclear secrets, recycled Soviet warheads and mysterious large companies preparing to exploit a breakthrough technology. The reality is way better than fiction.
We pick up the narrative when Dr 'Condy’ Rice, the US Secretary of State, signs off on a letter to Alex, part-time cabaret singer and the curly-haired scion of Adelaide’s Downer family. After months of unexplained delays, the US State Department gives security clearances for several large American corporations to access to data related to technology owned by the little-known Sydney company Silex Systems. Silex shares jump 50% in a day as rumours circulate of certain upfront payments, royalty streams and even more potent technologies pending.

But perhaps we should pause and rewind the tape. The tale began back in the 1980s when medical services group Sonic put up $2 million to fund a research project on the laser manipulation of atoms. People made such bold moves in those days '” think of Cochlear and the clutch of other technical companies Pacific Dunlop bought. The heart pacemaker company Telectronics hit trouble when a batch of leads failed, but Cochlear, as old hands at Pacific Dunlop get tired of hearing, is now a $2 billion colossus that dwarfs its parent.

So Sonic was the incubator and after Silex researchers had toiled for about a decade at the Lucas Heights nuclear research reactor in southern Sydney, the company was floated on the Australian Stock Exchange in 1998 at 60¢. The name Silex is an acronym for the work those researchers were doing: Separation of Isotopes by Laser Excitation, and was a simpler variation of the uranium enrichment process. If it worked it had the three-fold advantage of requiring far smaller capital outlays, less power and less uranium; uranium tails with as little as 0.1% U235 could be used. Two NSW physicists, Dr Michael Goldsworthy and Dr Horst Struve, believed they could tune their lasers to the precise frequency that would, with 'one zap’, have the U235 isotope absorbing radiation and changing to a form that could be more easily separated, while the more common U238 isotope would be unaffected. Producing volumes of enriched material means adding a series of modules, but they occupy a small space and don’t use much electricity.

This was an advance on research that had started nearly 30 years earlier at the University of California’s Livermore Laboratory. Over the years it had cost the US Department of Energy about $US2 billion. As with about a dozen similar projects in 20 other countries including Britain, Brazil, Japan and Iran, it never quite got there. They had all tried to replace the older inefficient gaseous diffusion technology and the more up-to-date, but still clumsy, gas centrifuge technology, a sophisticated version of a spin dryer. Centrifugal force eventually separates the heavier form of uranium, U238, from the more useful U235. The U235 is the active stuff but as it occurs naturally at 0.7% of any shovelful, to bring it up to the 4% ratio required to create powerful heat requires many runs.

This was the reason the US Enrichment Corporation (USEC) pulled the plug on the Livermore technology and transferred its funding to Silex. A special treaty was drawn up to protect US and Australian security interests. If the technology fell into the hands of terrorists, some backyard laser devices might be able to enrich enough uranium to build a bomb.

By late 1999, Silex took off. It hit $4.60 on enthusiastic broker reports. Potter Warburg (now UBS) was a supporter. Well aware that commercialisation was years away, it opined that this was a $6–7 stock, given the US funding and the 5% royalties that would flow if the technology were adopted. The now head of UBS research threw in a modest amount for possible similar enrichment of silicon, carbon and other elements.

The Silex shares held up for a time, but rumours started circulating that the USEC was losing interest. The shares softened despite US denials, but after two more denials the USEC withdrew funding. Some observers said it was because it was a lot cheaper for USEC to recycle Soviet nuclear warheads than to finance uncertain technology. Others said that was rot; the stockpile of warheads would soon run out. No one knew. The Silex people seemed to genuinely have no idea why they were dumped just as the process was within months of final proof.

Silex shares slumped. There was some rancour about who owned what, but as USEC had pulled the plug, all rights, remaining cash, technology and ashtrays reverted to Silex.

But as with any good story, that was far from the end of it. Goldsworthy’s work was well known overseas. There were interested parties in the US, apparently very big ones. It didn’t take much acumen to work out that a technology “eight to 80 times more efficient” (to quote Silex), that might reprocess tailings and cost relatively little to set up, might be worth a motza. By combining, say, a designer of power stations, uranium fuel rod expertise and a new method of enrichment, such a consortium might drive a truck through the market.

This is where we now stand, three or four chapters in. The suspense is killing. Who are the partners? Can the technology really be “eight to 80” times more efficient? Is that for real? Eight sounds a big efficiency gain but 80 is on a different planet. And the tailings? There is 600,000 tonnes of the stuff lying around, costing a bundle and being a plain embarrassment. And half of this stuff is rated at 0.24%, possibly enough to keep Silex enrichment busy for years. And what would that do to all the uranium plays? Would the uranium price collapse if all this waste could be re–processed? All good questions, but sorry'¦you now have to wait for the next excruciating episode.