PERTH (miningweekly.com) – Faced with falling commodity prices across its most valued products, namely iron-ore and coal, the Australian government’s focus has turned to yellowcake as the next source of capital income.
Resources and Energy Minister Gary Gray has called on Australia’s uranium industry to work with all Parliaments to help meet the rapidly growing global demand.
“We need industry to commit to further development of new projects to ensure that our uranium production meets global demand, particularly as demand for uranium is likely to surpass current supply,” Gray said.
“Uranium exploration and mining have particular characteristics that make its exploitation complex. Parliaments and industry must work together to ensure that mining, processing, commercial and regulatory actions represent best practice and encourage the growth of the uranium industry.”
The Minister pointed out that current global demand for uranium was outstripping supply, and presented an opportunity for Australia’s uranium industry to fill the gap.
During 2013, the world’s 435 nuclear power generators were expected to need 20% more uranium than was currently being produced from the world’s mines.
“This year, these power generators will need more than 66 000 t of uranium, but current global mine production is at only 55 000 t. The shortfall is largely being met from secondary sources, such as reprocessing highly enriched weapons-grade uranium from the former Soviet Republic,” Gray noted.
Australia currently has the world’s largest uranium reserves, with 33% of the world’s reasonably recoverable uranium resources, and more than one-million tonnes more uranium than second-placed Kazakhstan.
In 2012, production from Australian mines rose more than 17% to top 8 000 t. However, Gray noted that the level was well below the period between 2003 and 2009, when it was 9 000 t to 11 000 t.
The Minister noted that some 66 nuclear power generators were currently under construction, with two-thirds of these being constructed in Asia. Several more were planned or proposed over the next 15 years and China and India had a total of 226 in that category.
“The significance of China and India cannot be overlooked,” Gray said.
By 2034, demand for power in China would have grown by more than the current demand of the US and Japan combined, while in India, as of 2007, around 410-million people were living without adequate access to electricity.
State governments have taken note of the federal government’s changing tune on the matter of uranium mining, with more states lining up to encourage investment in the uranium sector.
The New South Wales (NSW) Minister for Resources and Energy, Chris Hartcher, recently said that he would invite interested parties to apply for exploration licences.
These exploration licences would likely be granted by the end of the year.
NSW overturned its ban on uranium exploration in March last year, and has since vetted expressions of interest from an estimated 39 industry participants, including major Rio Tinto and mineral sands miner Iluka.
However, Hartcher was clear that licences to explore for uranium did not mean that the state was ready to con- template uranium mining just yet.
“All that government is doing now is allowing exploration in NSW - but the fact that there are 39 expressions of interest shows that there is a great deal of interest in exploration, and then if commercial deposits are discovered, and they can be accessed in an environmentally sensitive way, then surely those companies can then make their submissions to government,” he said.
To show it was serious about its exploration commitments, the NSW government also joined forces with the South Australian state government to encourage mineral development in the states.
Hartcher and his South Australian counterpart, Tom Koutsantonis, announced that the state governments would sign a memorandum of understanding (MoU) to maximise opportunities for mineral investment and economic development.
“Far western NSW contains mineral-rich areas with proven potential for iron, base metals and mineral sands, and strong potential for uranium deposits,” Hartcher said.
“Both states have much to gain from the MoU which will encourage cooperation between agencies in respect of infra- structure access and development, policies on best practice regulation and planning processes.”
Hartcher noted that as the global leaders in geoscientific information acquisition and delivery, the MoU would help attract resource-related investment across both states.
Koutsantonis added that the MoU would also facilitate infrastructure access and interagency collaboration in the development of resources near the state border regions.
“We don’t want a state border to become an impediment to developing an asset. This MoU aims to eliminate cross-border obstacles so that we can ensure both states reach the full potential offered by our mineral endowment, especially in the Braemar province [iron formation],” Koutsantonis said.
Uranium mining and exploration are currently permitted in South Australia, the Northern Territory, and Western Australia, while exploration is permitted in Victoria and NSW.
BACKING THE PLAY
The uranium industry has responded with enthusiasm to Gray’s call to arms, with the Australian Uranium Association (AUA) lauding the strong support from both the state and federal governments.
“The uranium industry is up for this challenge. We welcome the opportunity to work with all sides of politics to develop a more efficient regulatory regime for uranium in Australia, one that results in more efficient scrutiny whilst maintaining the very high standards of environmental protection and radiation safety for which the industry has come to be known,” the AUA said.
“We are also up for the challenge because further developing our domestic uranium industry is in the country’s national interests.”
The industry body noted that with the emergence of growing nuclear power aspirations in countries with whom Australia already had deep diplomatic and trading relationships, or with whom the state wished to establish broader and deeper diplomatic and trading relationships, uranium was now a strategic commodity
“Australia cannot afford to have a domestic uranium production policy that is out of kilter with the treaty promises we make to export uranium. To put it bluntly: there is little point in treaties for export to India or the UAE if domestic uranium policy unnecessarily constrains the project development that would enable us to fulfil the promise of the treaties in a timely fashion,” the AUA said.
Australia’s uranium exports are expected to increase to 14 000 t in 2014, earning the country some A$1.7-billion in revenue. If the industry is allowed to expand to its full potential, the country’s exports could increase to between 28 500 t/y and 37 000 t/y by 2030.