Uranium-mining investments at risk
14 March 2011 | 1322 Views
- Ambassador defends ex-Japanese cars | 20 June 2014
- 5.1 magnitude earthquake hits coast of Japan | 08 February 2014
- Ex-Jap car dealers slash prices at Beitbridge Border Post | 01 February 2014
- Iran nuclear deal 'bad' says Israel | 24 November 2013
- Historic nuclear reached on Iran | 24 November 2013
- 'Safety of ex-Japanese people carriers blown out of proportion', operators say | 09 November 2013
Billions of dollars of uranium-mining investments in Australia could be at risk if explosions and radiation leaks at reactors in quake-hit Japan prompt governments to rethink plans to produce more nuclear power.
With more than 30% of the world's economically exploitable uranium reserves, Australia has a lucrative resource base as fears of climate change tilt governments away from fossil fuels and toward greater interest in nuclear power.
But Friday's massive earthquake in Japan is presenting miners like BHP Billiton with a major dilemma: press ahead with new uranium developments, or put them on ice until governments give a public vote of confidence in nuclear power. A spokeswoman for BHP Billiton wasn't immediately available for comment.
Australia's federal government has made sales of the nuclear fuel a top foreign policy goal that can give it clout in regions such as China and the Middle East, where energy demand is booming. Earlier this month, Canberra signed a deal with the United Arab Emirates, paving the way for uranium sales to the Gulf country to power an industry it hopes to begin producing electricity in 2017.
But the industry, which has struggled with public opinion, has long dreaded a sequel to the disasters at Chernobyl or Three Mile Island√¢‚Ç¨‚Äùincidents that tarnished the image of nuclear power for decades. Political opposition to uranium mining and fears of liability for disposal of nuclear waste have long stymied uranium developments in Queensland and Western Australia, the country's two largest states.
"Should the situation in Japan worsen, that will set back nuclear power programs," said David Lennox, a resources analyst at Sydney-based brokerage Fat Prophets. "The plants that are under construction will still get built, but once they roll off the production lines we may not see new ones coming behind them. That's what we saw after Chernobyl."
Shares of Australian mining companies sold off sharply Monday, on expectations that the troubles at the Fukushima Daiichi nuclear plant would hit both short-term demand for uranium from Japanese utilities and longer-term prospects for construction of new nuclear plants.
Paladin Energy Ltd., which operates the Langer Heinrich mine in Namibia, fell 16%, while Energy Resources of Australia Ltd., a Rio Tinto-controlled company that operates the Ranger mine amidst the tropical wetlands of Australia's Kakadu national park, dropped 12%.
"It is too early to make an assessment of the impact on the market," an ERA spokeswoman said. Paladin wasn't immediately available.
However, analysts point to a crucial difference now compared to the aftermath the Chernobyl disaster--the emergence of China as the world's most voracious energy consumer.
"Certainly [the accident] has impacted uranium share prices, and that sentiment might be there for a while to come," said Greg Hall, managing director of Toro Energy Ltd., a local uranium developer. "But you can't imagine this will impact China's strong [nuclear] build program."
At present there are 443 nuclear reactors in operation world-wide and 58 under construction, according to the World Nuclear Association, an industry group. But China alone aims to add a further 160, while India has plans to build 58 and a total of 482 new plants are being proposed and planned world-wide.
Supplying this new generating capacity will require a sharp increase in nuclear fuel production. According to the World Nuclear Association, every 1,000 megawatts added to global nuclear power generation requires 200 tons of uranium oxide. On that basis, capacity that China and India alone intend to add by 2020 would require global production to rise by 25%.
"China will not change its determination and plan for developing nuclear power," said Zhang Lijun, China's Vice Minister of Environmental Protection, over the weekend, according to the state-run Xinhua news agency.
But despite its vast resources, Australia is losing ground as a producer of the fuel to emerging economies such as Kazakhstan, Namibia, and Niger. In 2009, Australia produced 7,156 metric tons of uranium oxide√¢‚Ç¨‚Äùjust 13% of the global total. That figure may drop further in the years to come: the Ranger mine produced 9% of the world's uranium in 2009, but is scheduled to close its main pit next year, while Jabiluka, a vast resource close to Ranger, may never be developed due to Aboriginal land-rights concerns.
BHP Billiton last year submitted an environmental impact statement on a US$5 billion dollar expansion of Olympic Dam, the world's largest uranium deposit, in the arid steppe of South Australia. But the plan has already been delayed for years and BHP is yet to publish a timetable for the development.
Miners are also racing to get government sign-offs on new uranium developments in Western Australia, which overturned a decades-long ban on uranium mining in 2008. Political opinion in the state remains split, with the Labor opposition advocating a renewed ban if it wins power in an election due in 2013.
Robert Vance, a nuclear energy analyst at the Organization of Economic Cooperation and Development, says that new mines in the developed world face a series of costly hurdles to production, partly as a result of a legacy of cleanup issues left at the feet of national and provincial governments after nuclear power's first wave of popularity.
"In Australia, Canada and the U.S., countries that have been significant uranium producers for a long time and have a significant resource base√¢‚Ç¨¬¶there's a lot of regulatory hoops to be jumped through to develop new mines and expand existing ones," he said.
Critical to Australia's prospects is the price of uranium, which stands at $66.50 per pound, half its 2007 record of $136 but well above the $50/lb that Merrill Lynch sees as the baseline for encouraging new mines.
"Given these higher prices and the willingness of investors to make investments in mines, Australia could become the world's largest producer," said Mr. Vance. "It certainly has the resource base."
Uranium Nuclear Japan
Most Read Stories
Concerned Citizen | 21 August 2014 | 143 Views
Staff Reporter | 21 August 2014 | 560 Views
Staff Reporter | 21 August 2014 | 1192 Views
Staff Reporter | 21 August 2014 | 376 Views
Staff Reporter | 21 August 2014 | 677 Views
Staff reporter | 21 August 2014 | 3329 Views
Staff reporter | 21 August 2014 | 2125 Views
Staff reporter | 21 August 2014 | 1462 Views
Staff reporter | 21 August 2014 | 2039 Views
Staff reporter | 21 August 2014 | 1323 Views
Moyo Roy | 21 August 2014 | 714 Views
Maggie Mzumara | 21 August 2014 | 1088 Views
Staff reporter | 21 August 2014 | 1569 Views
Staff reporter | 21 August 2014 | 2116 Views
Staff Reporter | 21 August 2014 | 1558 Views
Sapa | 21 August 2014 | 1688 Views
Sophia Chese | 21 August 2014 | 1256 Views
Movement for Democratic Change, Harvest House | 21 August 2014 | 606 Views
Sports reporter | 21 August 2014 | 3896 Views
Tonderai Rutsito Tech Talk | 21 August 2014 | 2242 Views
Staff reporter | 21 August 2014 | 3505 Views
Staff reporter | 21 August 2014 | 3437 Views
Staff reporter | 21 August 2014 | 3034 Views
Staff reporter | 21 August 2014 | 4435 Views
Staff reporter | 21 August 2014 | 2064 Views
Thulani Nkala | 21 August 2014 | 2140 Views
Andrew Mambondiyani | 21 August 2014 | 1581 Views
Staff reporter | 21 August 2014 | 3993 Views
Staff reporter | 21 August 2014 | 1911 Views
Staff reporter | 21 August 2014 | 4065 Views
Staff reporter | 21 August 2014 | 1553 Views
Staff reporter | 21 August 2014 | 2859 Views
Janine Dube, www.onevybe.com | 21 August 2014 | 3013 Views
Staff reporter | 20 August 2014 | 4155 Views
Staff reporter | 20 August 2014 | 2493 Views
Staff Reporter | 19 August 2014 | 3158 Views
Staff Reporter | 19 August 2014 | 1473 Views
Tawanda Marwizi | 19 August 2014 | 2366 Views