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Australian uranium exports set to leap up

Diet Simon | 03.05.2007 10:07 | Ecology

Australian uranium exports are set to leap up regardless of what government takes power in elections late this year. Australia's opposition Labor Party (ALP) has just narrowly scrapped its 25-year-old opposition to development of new uranium mines.

A motion from Kevin Rudd, the new ALP leader, supported by South Australian Premier Mike Rann, to lift the ban and allow more uranium mining passed 205 votes to 190. But Rudd told a national conference of his party that he’s leaving it up to the states and the Northern Territory, all of which have Labour governments, to decide whether to license new mines. Most state governments are still opposed.
There are now three producing mines in Australia: BHP Billiton's enormous Olympic Dam in South Australia (the biggest uranium mine in the world); the Beverley mine, also in South Australia; and the Ranger mine in the Northern Territory.
The premiers of Queensland, Western Australia and NSW said their states would remain free of uranium mines, despite the policy change. Western Australia and Queensland have some of the most promising uranium prospects in the country and it’s expected that ultimately there will be enough pressure on their governments to eventually force uranium mining in those states.
But WA premier Alan Carpenter said uranium mining would not happen under his watch. His government could face pressure, though, from mining giant Rio Tinto which wants to develop its Kintyre deposit in the state's north.
Carpenter said while he had concerns about the environmental impact of uranium mining, he also did not want to see WA become the world's dump site for atomic waste.
"We are not going to take the world's nuclear waste even though there is strong lobbying and big financial incentives (that) are talked about for our state to do that," he said.
Premier Peter Beattie of Queensland may find himself under pressure from his own party and although saying he personally doesn’t want uranium mining in his state, he’ll be mindful of countries like China and Japan, which buy Queensland's high quality coals and have a thirst for nuclear energy. Coal is still Australia's biggest export earner.

“Open for business”

So far the premier of South Australia, Mike Rann, is the odd man out, welcoming more uranium mining. Rann lobbied hard for the change and expects the expansion of uranium mining to create billions of dollars in revenue and tens of thousands of jobs in his state over the next few decades.
SA already has two uranium mines, BHP Billiton's Olympic Dam and the Beverley mine, owned by Heathgate Resources, and the new Honeymoon mine will begin production next year. The Olympic Dam copper-uranium mine holds about one third of the world's uranium reserves. A mining licence has also been granted to SXR Uranium One for an ISL mine at Honeymoon. Rann called the policy change a great victory for his state. He said South Australia was now "totally and completely open for business" in the area of uranium mining and export. But he also opposes having a nuclear waste dump in his state.
Chief Minister of the Northern Territory, Clare Martin, is known for her anti-uranium stance, but Prime Minister John Howard’s conservative national coalition government has pointedly reminded her that it’s paying most of the NT's bills and she should allow more mines to open. Australia's third, and longest serving uranium mine, Energy Resources of Australia's Ranger, is in the NT, as are many advanced projects. The federal government has the power to approve new mines in the territory, leaving that option available for any future Rudd government, though the Howard government has not taken it up.
The uranium issue does not arise in Tasmania or Victoria while New South Wales has for decades banned exploration for uranium, and any change of heart would still see NSW out of contention in the race to develop new mines. NSW Premier Morris Iemma said his state would not change the ban, in place since 1980.

“More uranium into a dangerous world”

Both Iemma and Carpenter condemned Prime Minister Howard's announcement of a plan to develop a nuclear power industry in Australia. "The Prime Minister is determined to rush headlong into giving us a nuclear industry and the NSW government will oppose him all the way," Iemma said. However, a recent opinion poll found popular opposition to nuclear power in Australia had edged down from 51 to 50 percent.
The numerically insignificant Australian Greens have lambasted both the Howard government and the Labor opposition over their respective plans for nuclear power and expanding uranium mining.
Greens Senator Christine Milne accused Howard and Rudd of "cozying up" to big business. "We are witnessing a new low in moral cowardice in Australia," Senator Milne said. "What Mr Rudd and the Prime Minister are doing is putting more uranium into a world market, driving the nuclear fuel cycle. History will judge them both for sending more uranium into a very dangerous world at a time when we don't need to be doing it."
The Australian Conservation Foundation (ACF) says Australians should be very worried by both government and opposition nuclear announcements. The ACF's Don Henry says he is concerned that both parties are heading down the nuclear path. The Democrats, another small opposition party, also oppose expansion of the nuclear industry.
The Mining Council of Australia has welcomed the new ALP policy, but added that it must be complemented by key enabling reforms from the state governments. MCA Chief Executive, Mitchell H Hooke, said: "This is a logical first step in establishing a nationally consistent, modern policy governing the production and export of uranium for peaceful purposes. We strongly endorse Australia's strict regulatory regime governing the production and export of uranium and Australia's stringent export safeguard arrangements to ensure that Australia's uranium is only used for peaceful purposes.
"Increasing world energy demand as well as concerns over climate change and energy security have stimulated global demand for mined uranium as reflected in a significant increase in its price. With 38% of the world's economic demonstrated resources and over 60 companies currently exploring for uranium, Australia is well positioned to meet this demand from both the developed and developing world,” the mining body said.
The ALP is still digesting its uranium decision, with some in the party angry at the nature of the two-hour debate and others determined to move on to attacking the government’s nuclear industry plans.
Labor's environment spokesman, Peter Garrett (known to many as lead singer of rock band Midnight Oil), says despite voting against the decision, he accepts it. He says Labor should now challenge Howard over his plan for nuclear power plants. "He's taking us down a road and a path which I think is very dangerous," he said.
Howard for his part has slammed the new Labor uranium policy as “hypocritical opportunism” – and offered to arrange a tour of a Chinese nuclear power station for both the federal and South Australian Labor leaders to “see where Australian uranium actually goes”. Howard’s government is poised to sign a new uranium export deal with China, which could be worth billions of dollars.
“You have this ridiculous situation where they have hailed themselves as apostles of the 21st century by ending their three mines policy on uranium, yet in the same breath they're saying ‘but of course, we can't convert the uranium for nuclear power in Australia although we can sell it to countries overseas and they can use it for civilian nuclear purposes.’”

If Howard’s Liberals stay in power after the next election, they plan to allow an increase in the quantity of uranium exports to an ever wider range of customers, and they visualise the development of a domestic enrichment and fuel fabrication industry, plus a raft of new nuclear power reactors.

Most of these are of the allegedly safe and terrorism-proof "generation 4" type, and have yet to leave the drawing board, let alone receive operational approval. Canberra would remove “unnecessary constraints on expansion of uranium mining, such as overlapping and cumbersome regulations relating to the mining and transport of uranium ore”.

Predictably, support for nuclear energy comes from the Australian Nuclear Association whose Clarence Hardy says the reactors currently being developed will produce less waste and are extremely safe. "There are one or two of those designs which are literally impossible to melt down," he said.
Labor argues that nuclear energy would be far more costly for Australia than clean coal or exploiting renewable energies. "Developing nuclear reactors, constructing them, is a generation-long endeavour, these are not quickly developed facilities let alone solving the issue of where are they going to go.
"We have the ability to develop all of the technologies to make that energy useable, we can better invest in clean coal, we can better invest in renewables. Let's get on with that rather than having, what in some ways is, an unproductive debate about nuclear energy," ALP deputy leader, Julia Gillard said. Australia has abundant alternative energy resources - solar, wind, geothermal and coal.

Preparing for a boom

Australia's uranium industry is preparing for boom times ahead. Uranium mining companies are pushing ahead with applications for licences that once lay dormant. In South Australia alone the government is fast-tracking 100 exploration licences in the wake of the Labor policy change.

Premier Rann said 60 companies in South Australia hold 160 exploration licences for uranium, with another 100 in the queue. "What we'll be seeing is a rush for exploration licences," he said. Jason Kuchel from the South Australian Chamber of Mines and Energy says companies that have found substantial deposits had previously been reluctant to move ahead. "Prior to the Labor conference those companies were unsure of whether or not they would be able to proceed," he said. He expects companies to apply to open new uranium mines within 12 months.

A mining industry conference in Adelaide heard that now that both sides of the political divide are aligned on uranium mining policy, judging each project on its merits, all the uncertainty in the industry is gone.

A mining executive argued that there's general acceptance that uranium mining and exploration is good, provided it translates into jobs and regional development and things for ordinary Australians.

Toro Energy, a uranium explorer based in Adelaide with projects in South Australia and the Northern Territory, says the new Labor policy will be viewed positively not only by the local uranium mining industry but also by overseas companies looking to source uranium.

There’s an enormous uranium boom in Australia where more than 140 listed explorers are operating, many in WA despite the highly publicised opposing stance by stance by Premier Carpenter. Even before the Labor conference took its decision, uranium stocks generally rose, some explorers reaching new peaks. More than 100 companies are keen to mine uranium all around the country, particularly in Western Australia and Queensland, now that they don't face blanket rejection.

Australia holds around 40% of the world's known uranium reserves, and the price of the mineral has climbed consistently since the start of 2004. Exploration expenditure in Australia has increased tenfold in three years, and the Labor switch is expected to boost investment further.

The spot price of uranium climbed from $US41.50 a pound to $US113 in the past year and now it looks as if Australia's exports of the controversial product will be increasing whichever party wins the next national election. The value of listed uranium explorers in Australia surged 23 per cent in the first three months of the year.

Though Canada is now the dominant supplier, Australia is the second biggest exporter, with the largest and lowest-cost recoverable resources. It mines 23% of global uranium production compared with Canada’s production of around 30%.
The ABN Amro bank believes the Labor vote will lead to further share-price rises hikes and a round of consolidation in the sector.
The hefty rise in uranium stocks this year is largely due to expectations of prolonged high demand.
More than enough uranium can be extracted from existing mines to satisfy all Australia's overseas customers for some time to come. New mines will simply increase the competition for existing markets.
Forty-eight new nuclear reactors are expected to be commissioned globally by 2013, including 13 in China and eight in India, creating strong demand for Australian uranium. A condition for allowing new mines under ALP policy will be that the buyer must be from a country that has signed the nuclear non-proliferation accord.
Although the federal government continues to claim that Australia strongly supports the Nuclear Non-Proliferation Treaty and will not sell uranium to non-adherents to it, it appears Australia now indirectly sells it to Taiwan through the United States, and is considering selling it to India.

Former diplomat, Professor Richard Broinowski at the University of Sydney, author of “Fact or Fission - the Truth about Australia's Nuclear Ambitions”, commented in the “Canberra Times” newspaper: “Howard seems to be doing his utmost to weaken what remains of the treaty's credibility. If Australia sells uranium to India, it will tempt other states to walk away from their treaty obligations. If Howard joins the proposed nuclear fuel-making consortium led by the US, he will reduce the effectiveness of the International Atomic Energy Agency, and cut across its own plans to develop and control a nuclear enrichment and supply group.”

There’s some suggestion that Labor has made the change to avoid being attacked by the prime minister for adhering to its three-mine compromise formulated during the passionate nuclear debate at the 1982 ALP national conference.

Diet Simon

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