By Steve Painter
Figures made available to primary industry and energy minister Simon Crean last week make it clear there can be no economic argument for opening new uranium mines in Australia. Any decision to change ALP policy will simply be caving in to blackmail by mining companies threatening to withdraw capital in retaliation for controls on mining activity.
In a detailed letter to Crean, Friends of the Earth systematically sets out evidence of a huge, worldwide glut in uranium supplies.
"The USSR, China and Eastern Europe plan to dump up to 100,000 tonnes of surplus uranium on international markets, on top of known Western surplus stocks of up to 200,000 tonnes," says FoE uranium researcher John Hallam.
In view of this international glut, "we have advised Mr Crean that allowing the development of more uranium mines makes no sense at all", Hallam said.
Contrary to statements by mining industry sources and their supporters in the ALP, the market is likely to remain glutted indefinitely. Estimates that demand will increase after 1995 are based on unrealistic expectations of expansion in the industry worldwide.
For several years, estimates of growth in the nuclear industry have been revised downwards, and the present spot price for uranium is below the cost of production at around US$9-$10 per pound. This price is in turn depressing contract prices, an example being a recent offer of US$15-30/lb to Denison Mines of Canada from its largest customer, Ontario Hydro. Denison's previous contract with the company had been for US$60/lb.
Figures from nuclear industry sources show that there are not sufficient reactors under construction to produce the predicted increase in uranium prices post-1995, and reactors ordered now will not come on line until next decade at the earliest. Even in Japan, where construction times are shortest, building a new reactor takes around seven years, excluding planning and ordering times.
The Japanese, South Korean and Taiwanese nuclear industries, which might have been expected to provide important markets for Australian uranium, are all facing growing domestic opposition. Taiwan, with six operational reactors, has no more under construction and none on order. South Korea, with nine operational units, has two more under construction and one on order, and Japan, with 40 operational plants, has another 15 under construction or on order.
On these figures, it would not be possible for Japan to build the 55 new reactors by 2010 predicted by John Kerin and the Department of Primary Industry and Energy in a submission to the ALP Uranium Policy Review Committee. Public controversies over siting of reactors and waste disposal could further slow the growth of the Japanese industry.
The FoE letter estimates that it will take until around 2011 to run down existing international surpluses of uranium, and existing production capacity will greatly exceed reactor demand until well past 2000.