South Africa is one of the top gold producers in the world, holding about 40 per cent of global reserves. According to Statistics South Africa, a government statistics agency, the value of gold sales was about ZAR 4 billion per month (approximately £400 million) in 2010. Most mining operations have waste and by-products, some of which are disposable, reusable or even saleable, others are not. A by-product of gold mining is the heavy metal uranium. In fact, as both gold and uranium are heavy metals, they are often present together in the same mine. The nuclear industry is the number one customer for uranium, and it is also mined for separately. When gold mining is the main objective, the uranium by-product is separated using acid which drains the mines. A report in the Mail & Guardian in November 2010 estimated that 100 000 tonnes of the uranium byproduct were in mine dumps in one western region of South Africa alone. The reasons for this are twofold.

First, gold prices are at historically high levels (about \($1400\) an ounce in early 2011), meaning mining the uranium is less profitable.

Second, a combination of the post-Cold War era and a decline in nuclear power production has seen a fall in demand for uranium. The price per pound of uranium was \($66\) approximately in early 2011.

Questions
1 Assuming the uranium by-product of a gold mine could be sold, how would an accountant consider whether or not it is worthwhile financially?
2 What factors apart from cost might be considered in the decision?