Mining our business? Australia's uranium future
Kent Grey, head of Minter Ellisons's international Uranium Focus Group, discusses the prospects for the uranium industry in this country. There are signs pointing to a sea change in Australians'
Kent Grey, head of Minter Ellisons's international Uranium Focus Group, discusses the prospects for the uranium industry in this country.
There are signs pointing to a sea change in Australians' attitudes to the mining and export of uranium. Changing global energy markets, concerns about carbon emissions and energy security, and improvements in technology are bringing about the change.
South Australia and the Northern Territory have traditionally been seen as the Australian "uranium provinces", essentially because both are extremely prospective for uranium and have governments and (from the lawyers' perspective) regulatory systems that have long promoted uranium exploration and mining.
South Australia hosts the world's largest uranium deposit (at Olympic Dam) and two of Australia's three currently producing uranium mines. The next "cabs off the rank" for uranium mining in the next few years will also be mines in South Australia, with three deposits nearing production. The Northern Territory is home to the Ranger uranium mine and the adjacent Jabiluka deposit, as well as other significantly-sized uranium sources.
The rest of Australia is poised to catch up, with one state government recently changing its policies on uranium mining and export.
Almost a year ago, the Western Australian Government lifted its administrative ban on uranium mining - paving the way for exploration, and for a detailed re-evaluation of known deposits in that state and for uranium mining to begin.
The change was extremely well received in that state, with an immediate surge in activity in an already buoyant mining industry. Now, the sprint is well and truly on for the development of Western Australia's first uranium mine.
In wider developments, the Federal Minister for Energy & Resources, Martin Ferguson, recently indicated publicly that it was only a matter of time before there could be uranium mining in Queensland.
And prior to that, in a significant policy shift, the Federal Government reversed its "no new mines" policy on uranium mining, clearing the way for states to follow suit.
It is possible that, within a few years, Australia's traditionally strong mining-backed economies - South Australia, Northern Territory, Western Australia and Queensland - could each be supporting a thriving uranium upswing.
Australia is in a prime position to be a competitive producer and exporter of uranium. We have the world's largest known deposits of recoverable uranium. We are politically stable, have high safety standards, an international reputation for strong environmental management programs, and a commitment to non-proliferation.
All these things combine to give us a real competitive edge in the world market.
According to the Australian Bureau of Agricultural and Resource Economics (ABARE), the world consumption of uranium is forecast to increase in 2009 by 6 per cent. The OECD Nuclear Energy Agency projects global nuclear power capacity will grow by about 66 per cent by 2030. Forecasts suggest that the value of our uranium export earnings will increase by 31 per cent in 2009-2010 - to $1.2 billion.
Although demand for uranium has fluctuated in past decades, in 2009 there were nine nuclear power plants - located in India, the Russian Federation, Japan, Iran and Canada - scheduled to be commissioned.
The rapid growth in electricity demand in developing economies, the economic cost of carbon emissions, anxiety about the reliability of future oil and gas supplies in the Middle East, and the prices of oil and natural gas all contribute to making nuclear energy a more attractive energy solution for the future.
Australia has a complex system of regulatory approvals (at state, territory and federal levels), industry codes of conduct, and international treaties and conventions to which we are a signatory that govern the mining, processing, storage, transport and export of uranium. It is a system that is coming under increasing scrutiny and already there are calls for streamlined regulation.
From the mining industry's perspective, a regulatory system that is clear and easy to understand, and regulators that are accessible and helpful, send a clear message that the various state, territory and federal governments are open for business. That is an important message for any country to give.
Countries with advanced uranium industries, and those involved in other parts of the nuclear energy cycle - such as enrichment, reprocessing and nuclear power generation - have the most advanced regulatory regimes.
While some commentators say that regulatory reform is not needed unless, or until, Australia expands into other aspects of the nuclear energy cycle (not just mining), there is mounting opinion that it might be best to act now.
It is not yet clear whether Australia will expand into other value-added parts of the nuclear cycle. If it happens, it might not occur for years. Or it may not happen at all. But for those parts of the cycle with which we are currently involved, a number of efficiencies can be achieved by streamlined regulatory processes.
Australia needs a rigorous regulatory system, particularly given its international position on issues such as non-proliferation and arms control. Strong regulation of our uranium industry is crucial to protect the environment, for safety, and to uphold Australia's important international obligations for the use of nuclear materials.
Regulation must be framed appropriately, and it must be in terms that are clear.
Development of Australia's uranium industry can only benefit from a more streamlined, clear and effective regulatory process.