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Uranium           

Nuclear power accounts for around 16% of the world's electricity supply and a major component of power generation in many countries - USA (20% of domestic electricity production), Japan (29%), Germany (32%), Hungary (34%), South Korea (38%), Sweden (52%), Lithuania (72%) and France (78%).

There are 441 reactors operating in 30 countries with total installed capacity of 368GWe. Another 24 reactors are under construction with new capacity expected to be added in China, India, Japan, Russia and South Korea. China has ambitious plans and India has announced plans to build 24 new reactors.

The outlook for nuclear power is changing due to concerns over global warming. The industry's has an excellent safety record,  and progress is being made on waste disposal issues.

All of the foregoing factors suggest increasing demand for uranium.

Uranium spot prices have risen from around US$10.00/ lb U₃O₈ in early 2003 to over US$40.00/lb U₃O₈ by March 2006.
The latest nuclear fuel market forecast, published by the World Nuclear Association in September 2005 ("The Global Nuclear Fuel Market, Supply and Demand 2005-2030"),  forecasts global uranium requirements to rise from the current level of about 178 million pounds U₃O₈ per annum to 186 million pounds per annum by 2010 and further to approximately 220 million pounds U₃O₈ per annum by 2020.

Uranium supplies for nuclear fuel are mainly provided by a mix of:
 

• mine production;
• reprocessing of spent nuclear fuel
• drawdown of inventories.

As secondary supplies decline, additional primary production will be required to satisfy increasing global requirements. Current production (2004) totals around 105 million pounds U₃O₈ per year which must expand to around 195 million pounds per year by about 2020.

This "primary production gap" will need to be filled from three sources:
 

• scheduled production from facilities already in operation
• undeveloped projects
• future discoveries.

Recent uranium price forecasts suggest that future prices are likely to remain in the range of US$35.00-45.00 per pound U₃O₈ over the next decade although the price weakening into the US$mid-20 per pound U₃O₈ range cannot be discounted.
 

AUSTRALIA’S ROLE IN THE URANIUM MARKET

Australia is the second largest uranium producer in the world, with 22.3% (8,982 tonnes) of world mine supply in 2004. Canada is the largest producer with 28.8% (11,597 tonnes) of world mine supply. The next largest producers are Kazakhstan (9.2%), Niger (8.2%), Russia (8.0%) and Namibia (7.6%).

However, Australia has approximately 30% of the world's uranium resources. Other countries resources include Kazakhstan (17%), Canada (12%) and South Africa (8%).

Most of Australia's total uranium resources are held within only six deposits:
 

• Olympic Dam in the Gawler Craton region of South Australia, the world's largest uranium deposit.
• Ranger, Jabiluka and Koongarra in the Alligator River region.
• Kintyre in the Rudall Province and Yeelirrie in the Yilgarn Craton of Western Australia.

Virtually all of Australia's significant uranium deposits were discovered between 1969 and 1980 during a period of high exploration expenditure for uranium by major companies with large budgets and using advanced exploration techniques and equipment.

This was followed by a long period of relative inactivity and low exploration expenditure for uranium-only mineralisation from 1982 onwards, during which only one deposit (Kintyre in Western Australia) was discovered. Australia increased its resource base since 1982 only because of the ongoing delineation of resources at the known deposits.

As a result, much of Australia, including the Gawler and Curnamona Cratons have not been explored for uranium for over 20 years.

THE POLITICAL LANDSCAPE
 

In the last ten years, there have been important positive changes to Commonwealth government policies relating to the mining and export of uranium, headed by the abolishment of the "Three Mines Policy" in 1996.

The current Australian Federal government's objective is to encourage the development and growth policy is to develop the export potential of Australia's uranium industry by allowing mining and export of uranium under stringent environmental requirements and strict procedures fro the export of uranium strict international agreements designed to prevent nuclear proliferation. This compliance is monitored by the Australian Safeguards and Non-Proliferation Office.

Proponents of new uranium mines in Australia are required by legislation to complete a comprehensive environmental impact assessment process, which calls for public comments on the proposal. The projects are assessed jointly by Commonwealth and State / Territory government agencies. For approval, the projects must meet strict requirements for environmental, heritage and nuclear safeguards.

The States and Territories control the licencing of uranium mining and have a wide range of policies on the development of uranium mining. The South Australian State Labor government currently permits uranium mining at Olympic Dam and Beverley, and supports the planned expansion of Olympic Dam. In addition, the State government is actively promoting and partially funding, exploration for uranium-bearing deposits. While it currently maintains the "no new mines" policy of the Federal Labor party, the South Australian State government is in favour of reviewing this policy at the next Federal Labor party conference in 2007. This contrasts with the State governments in Western Australia and Queensland which have policies against the development of uranium mines.