Sup­ply strug­gles to meet nu­clear tide

Many na­tions have re­vised their nu­clear en­ergy poli­cies and are seek­ing ura­nium sup­plies to feed their en­ergy needs, writes Robin Bromby

The Weekend Australian - Review - - Clean Energy -

CHINA is look­ing to throw bil­lions of dol­lars into Cana­dian ura­nium ex­plo­ration, Rus­sia is pre­par­ing to help boost Namibia’s ex­plo­ration pro­gram and In­dia — de­nied ura­nium by Aus­tralia — is look­ing to Africa to help keep its nu­clear power plants go­ing.

The nu­clear arms race may be well over, but there is now a new race — one to find enough ura­nium to keep the world’s rapidly grow­ing nu­clear power in­dus­try go­ing.

In­dia’s fail­ure to join the non- pro­lif­er­a­tion agree­ment has cut it off from sup­plies from Aus­tralia and other sig­na­tory na­tions, and now it is turn­ing to coun­tries out­side the agree­ment — par­tic­u­larly Niger and Namibia — to source ura­nium so that it can meet its goal of boost­ing nu­clear gen­er­a­tion by 2020.

This race to nu­clear en­ergy, ini­tially given im­pe­tus in re­cent years by the need to build base load power us­ing clean en­ergy rather than burn­ing fos­sil fu­els, is now be­ing given fur­ther ur­gency by the grow­ing short­ages of those fos­sil fu­els.

Oil prices are soar­ing, edg­ing up to $ US112 ($ 101) a bar­rel by the sec­ond week of April; that same week, Ja­panese util­ity Chubu Elec­tric agreed to pay 125 per cent more for its ther­mal coal sup­plied by Xs­trata.

All signs point to grow­ing gaps be­tween pro­duc­tion and de­mand for both oil and coal.

Aus­tralia is one of the few coun­tries to have set its face against nu­clear power, de­spite its ap­peal as a form of clean en­ergy, while the rest of the world rushes to em­brace it.

Now, in ad­di­tion to its en­vi­ron­men­tal ap­peal, nu­clear is see­ing the gap in cap­i­tal and gen­er­at­ing costs be­tween it and ther­mal power sta­tions clos­ing.

Aus­tralia has 263 listed com­pa­nies ( at last count) which have some in­volve­ment with ura­nium ex­plo­ration. Canada has 285 listed com­pa­nies with at least one or two ura­nium projects, ac­cord­ing to Syd­ney- based Re­source Cap­i­tal Re­search, which pub­lishes quar­terly re­ports on the sec­tor.

And yet we have only three mines, with a fourth un­der con­struc­tion.

An­other hand­ful of projects in South Aus­tralia and the North­ern Ter­ri­tory could be brought into pro­duc­tion within two to four years, but more ad­vanced ones in Queens­land and West­ern Aus­tralia are frozen by state bans on ura­nium min­ing.

In 2006- 07, Aus­tralia pro­duced 9577 tonnes of U3O8. This coun­try has the world’s largest ura­nium re­source, but it is rapidly be­ing over­taken by other na­tions that do not have sim­i­lar po­lit­i­cal bar­ri­ers.

Kaza­khstan, for ex­am­ple, ex­ported 6600 tonnes last year and plans to pro­duce 9600 tonnes this year and by 2010 be­come the world’s lead­ing ura­nium pro­ducer.

The US has been lift­ing out­put. A to­tal of 1800 tonnes was mined in 2007, a 14 per cent in­crease on the 2006 fig­ure.

Longer term — when state gov­ern­ment poli­cies change and more projects reach min­ing de­vel­op­ment — Aus­tralia will be able to ride the ura­nium tide.

And prices are un­likely to re­turn to the depths they reached in the late 1990s — nor the dizzy heights reached in the early 2007 ura­nium spec­u­la­tive frenzy.

While the spot price hit $ US138 a pound last year, that was seen as a spec­u­la­tive bub­ble. By early April, ura­nium spot was sit­ting at $ US71/ lb but US fore­casts show a longer term price set­tling at around $ US90/ lb and sup­ply con­tracts are be­ing ne­go­ti­ated around that level. At $ US90/ lb, many of the pro­posed Aus­tralian projects could be eco­nom­i­cally vi­able.

But, in the mean­time, a num­ber of Aus­tralian com­pa­nies have promis­ing or ad­vanced projects out­side this coun­try — in places where ura­nium min­ing is en­cour­aged — and it is th­ese com­pa­nies that pro­vide more short- term ex­po­sure to ura­nium for in­vestors.

Pal­adin En­ergy, with its op­er­at­ing mine in Namibia ( which pro­duced 490,800 lbs in the March quar­ter) and its ad­vanced project in Malawi, has been one favoured in­vest­ment.

But there is Equinox Min­er­als, which is in the fea­si­bil­ity study stage at its ura­nium project in Zam­bia. And Con­tact Ura­nium is work­ing to­ward a pre- fea­si­bil­ity study at Co­rachapi in Peru, where it has an in­ferred re­source of 9.2 mil­lion pounds with an­other 190 holes now be­ing drilled to en­large that re­source.

Other com­pa­nies with ad­vanced projects over­seas in­clude Ex­tract Re­sources and West Aus­tralian Met­als ( Namibia) and Green­land Min­er­als which, for­tu­nately, has rare earths at its project there which should al­low it to de­velop a mine — both Green­land and Den­mark al­low ura­nium pro­duc­tion only if it is a by- prod­uct of a mine.

The do­mes­tic scene is more prob­lem­atic. There are many ju­niors with what the more scep­ti­cal ob­servers call ‘‘ moose pas­ture’’ — the Cana­dian term for ground that has lit­tle chance of yield­ing a large, high grade re­source. Oth­ers have come up with low- grade drilling as­says. Many will run out of money this year as in­vestor sen­ti­ment turns against the more spec­u­la­tive end of the mar­ket.

But oth­ers have made con­sid­er­able progress and come up with re­sults. To take a hand­ful ( at ran­dom), there is Curnamona En­ergy, which is now seek­ing ap­provals to start trial leach min­ing at its Oban de­posit in South Aus­tralia; also in that state, Al­liance Re­sources has come up with a re­source and has re­cently set it­self the task of find­ing up to 47 mil­lion pounds of ura­nium at its Four Mile East ten­e­ment.

Across the border in the North­ern Ter­ri­tory, En­ergy Met­als re­cently boosted the re­source at the Bi­gr­lyi de­posit to 23.4 mil­lion pounds. The de­mand will cer­tainly be there. Re­source Cap­i­tal Re­search’s count shows that there were 222 nu­clear re­ac­tors for power gen­er­a­tion on the planned and pro­posed list at start of 2007; by Jan­uary this year, that had risen to 315 re­ac­tors. There are 439 re­ac­tors in op­er­a­tion and 34 un­der con­struc­tion around the world.

Bri­tain, which only a few years ago looked as if it were poised to run down its nu­clear gen­er­at­ing ca­pac­ity, has now turned 180 de­grees on pol­icy and is to in­vest in new re­ac­tors.

China has re­cently an­nounced plans to fur­ther ac­cel­er­ate build­ing of nu­clear power sta­tions and it plans to start stock­pil­ing ura­nium for fu­ture use. Rus­sia plans to dou­ble ca­pac­ity by 2020.

Tai­wan is as­sess­ing whether to build more nu­clear plants while two re­ac­tors are to go ahead in the US state of Ge­or­gia.

Ro­ma­nia now gets 20 per cent of its elec­tric­ity from nu­clear power and two more re­ac­tors are be­ing planned.

The tide is run­ning nu­clear’s way. The only ques­tion is whether ura­nium sup­ply will be able to keep up.

Vi­sion: Ian Plimer says South Aus­tralia has the po­ten­tial to be­come an­other Saudi Ara­bia

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