Thursday 2 March 2006
ABC NT Country Hour

Uranium prices are currently the highest they've been in over three decades, at around about US $38 a pound. However, forecasts published by the Australian Bureau of Agricultural and Resource Economics are raining on the uranium parade. While there are at least 30 resources companies exploring for uranium across the Territory right now, according to ABARE the long lead time to pay-dirt could lessen the profits substantially.

Ian Hore-Lacy, manages the Uranium Information Centre, and is a spokesman for the London-based World Nuclear Network, and he's brushing off the bad news.
"There is an increased number and capacity of nuclear jet power reactors generating electricity around the world, and this is increasingly steadily. And secondary supplies are diminishing. These are stockpiles and uranium coming out of Russian weapons programs. This means that the amount of uranium required from mines is likely to increase in the next five years quite substantially.

"Canada is leading with about one third of the world mine supply, then Australia has one quarter, and then Kazakhstan and a number of smaller suppliers. Nearly 20 per cent of the world's supply is coming out of Russian weapons stockpiles and this will probably cut out soon after 2010, and therefore there will be an increasing shortfall and this is accelerating exploration. The demand for uranium will be steady, it does not go up and down like other minerals as it's all going into expensive plants that need to run full time to justify capital cost. The only question is where the uranium will come from. Price can be more volatile and relates to hopes and market sentiment."

But will the long lead times (required to bring on stream future Australian uranium mines) prevent any new mines from cashing in on the market boom?

"Oh no, the prices are not going to drop back to what they were, when the secondary material first started coming onto the market. But they won't be what they are now either."

ABARE's predictions suggest prices could become more static as soon as 2011, which is when the NT's potential new uranium mines could begin production.

"But that prices level is still very viable for new mines and relevant for producers."

ABARE's forecast suggested world demand for uranium would not be sufficiently high to encourage further mine developments in Australia until 2015.

"A lot can happen in that time, but the basics of demand and the need for nuclear power is locked into place with capital investment going ahead. The exploration effort going on in all states is considerable and much greater than before, nobody can predict how quickly that will happen. The major obstacle will be political instability. The Labor Party still has to grapple with its 'no new mines policy' and how it would apply that. It constrains the prospects for new uranium mines."

Environmental campaigners (such as the Australian Conservation Foundation) maintain the uranium industry remains deeply un-popular with the Australian community based on their own polls.

"I don't buy that line particularly, I think Australians are not particularly aware of uranium mining and nuclear power. The whole issue of nuclear power has yet to be addressed in Australia. I don't think there is any strong negative sentiment against. If we take greenhouse gas emissions seriously and the need to limit those, then we really have nowhere else to go other than nuclear power, and that needs to be addressed with the public and talked about. Until then it's an academic argument."