Now here’s an unusual item from the Australian business pages. Instead of the usual big talking up of the future for Australia’s uranium companies, – darned if one investment writer hasn’t told it like IT IS!
Uranium on the nose, The Motley Fool By Mike King - May 16, 2013 More than 26 months after the nuclear accident at Fukushima, Japan, the nuclear industry is still feeling the effects with depressed uranium prices and cost pressures that are squeezing margins……
The price for uranium has fallen 40% since Fukushima to US$40 a pound, as Japan suspended its fleet of nuclear plants, while Germany…
….. the uranium price could stagnate at current levels for many years, much like it did after previous nuclear incidents. Japan may not restart its reactors, preferring instead to seek other energy alternatives, and reactors currently under construction could still be cancelled or postponed.
That is not good news for ASX listed uranium miners Paladin, Energy Resources of Australia (ASX: ERA), Toro Energy (ASX: TOE) or Deep Yellow Limited (ASX: DYL). http://www.fool.com.au/2013/05/16/uranium-on-the-nose/
Last year the Olympic Dam expansion was cancelled, BHP disbanded its uranium division and sold the Yeelirrie uranium lease in Western Australia for about 11 per cent of the nominal value of the resource.
Also indicative of the state of the industry was Cameco’s announcement in February of a $162.5 million write-down on the Kintyre project in Western Australia. Just months after first production at the Honeymoon mine in north-east SA in September 2011, project partner Mitsui announced its decision to withdraw as it “could not foresee sufficient economic return from the project”.
In addition to industry propaganda, governments routinely inflate the significance and potential of the uranium industry, as do industry “analysts” (some of them market traders), some business journalists and some academics. There are real-world consequences to uranium mania — many “mum and dad” retail investors have been burned, especially during the speculative price bubble in the mid-2000s.
Uranium Industry Dreams Of Paydirt http://newmatilda.com/2013/05/02/uranium-industry-dreams-paydirt By Jim Green, 2 May 13, A new report released by the Australian Conservation Foundation: Yellowcake Fever: Exposing the Uranium Industry’s Economic Myths, shows that uranium accounted for just 0.29 per cent of Australia’s export revenue in the 10 years from 2002−2011. In the last financial year, uranium revenue of $607 million was 103 times lower than the biggest earner, iron ore. Milk and cream generate twice as much export revenue as uranium — and can’t be turned into Weapons of Mass Destruction.
Uranium export revenue is still more underwhelming given that the four companies mining uranium in Australia are all either majority foreign owned or 100 per cent foreign owned; in other words, a sizeable proportion of that export revenue never leaves the Northern Hemisphere and never comes anywhere near Australia. Read more »
Australian Uranium Association’s Paydirt Conference shortened to one day, in gloomy economic prospects
PAYDIRT URANIUM CONFERENCE IN ADELAIDE THIS MONDAY Uranium industry boosters will gather this Monday April 29 at the Adelaide Hilton for the annual Paydirt Uranium Conference. This year’s conference has been downgraded to a one-day event, reflecting industry stagnation in the wake of the Fukushima disaster.
Friends of the Earth national nuclear campaigner Dr Jim Green, co-author of a new report exposing the economic myths of the uranium industry, said: “The Australian Uranium Association’s Executive Director Michael Angwin claims that Australia “has enough reserves to be to uranium what Saudi Arabia is to oil”. However Australia’s uranium export revenue in 2011 was 466 times lower than Saudi oil revenue in the same year. Others to draw asinine comparisons between Australian uranium and Saudi oil include former SA politicians Mike Rann and Kevin Foley, and Adelaide-based academics Ian Plimer and Haydon Manning.”
“For decades the uranium industry has promised great economic benefits but it never delivers. Uranium accounted for just 0.29 per cent of Australia’s export revenue in the 10 years from 2002−2011. In the last financial year, uranium revenue was four times lower than Australia’s 20th biggest export earner, eight times lower than Australia’s 10th biggest export earner and 103 times lower than the biggest earner, iron ore. Even milk and cream generate nearly twice as much export revenue as uranium − and can’t be turned into Weapons of Mass Destruction. Uranium mining and exploration accounts for just 0.015% of all jobs in Australia.”
“Last year, BHP Billiton cancelled its planned expansion of Olympic Dam, disbanded its Uranium Division, and sold the Yeelirrie uranium lease in Western Australia for about 11% of the nominal value of the resource. Just months after first production at the Honeymoon mine in north-east SA in September 2011, project partner Mitsui announced its decision to withdraw as it ‘could not foresee sufficient economic return from the project.’”
“An independent inquiry is long overdue to objectively weigh the uranium industry’s economic benefits against its effects on environmental and public health, safety and security, particularly in the shadow of the unfolding Fukushima tragedy − a tragedy directly fuelled by Australian uranium,” Dr Green concluded.
‘Yellowcake Fever: Exposing the Uranium Industry’s Economic Myths’, a report released by the Australian Conservation Foundation last Friday, is posted at:
Dave Sweeney, 26 April 13 Australia’s uranium industry is a minor contributor to employment and the economy, a major source of domestic and international risks and is overdue for an independent inquiry into its effects on the environment, health, safety and security, according to a report released today on the anniversary of the 1986 Chernobyl nuclear disaster.
The report, Yellowcake Fever: exposing the uranium industry’s economic myths, released by the Australian Conservation Foundation, shows uranium accounted for only 0.29 per cent of national export revenue and less than 0.015 per cent of Australian jobs in the decade to 2011.
In the last financial year, revenue from uranium was four times lower than Australia’s 20th biggest export earner, eight times lower than Australia’s 10th biggest export earner and 103 times lower than the biggest earner, iron ore. “While Australia’s uranium sector remains an economic minnow, it is a leviathan when it comes to the damage it does to communities and the environment and the risks it spreads,” said the Australian Conservation Foundation’s Dave Sweeney.
“It is time for an independent and credible cost-benefit analysis of this sector and for decisions to be based on evidence, not self-interested industry enthusiasm.”
The most recent independent assessment of the Australian uranium industry – a Senate Inquiry in October 2003 – found the sector characterised by underperformance and non-compliance, an absence of reliable data to measure contamination or its impact on the environment and an operational culture focussed on short term considerations.
“In the decade since that Senate Inquiry, leaks, incidents and accidents have continued to dog uranium mines, Australia has sold uranium to more nuclear weapon states and Australian uranium has fuelled the continuing Fukushima tragedy,” said Dave Sweeney.
“The Australian Uranium Association’s push to reduce independent scrutiny of uranium projects shows why this sector does not enjoy community confidence or a social license.
“We call on the federal government to establish an evidence-based inquiry into the operations and impacts of this industry, particularly in the shadow of Fukushima.” Contact: Dave Sweeney, 0408 317 812
the question of the real cost of uranium at Wiluna because if you add 10% for other charges the $37/lb becomes $40.70/lb and an extra 20% lifts the full cost to $44.40/lb.
Equity investors and the providers of debt finance to the Wiluna project will want to see something far more concrete than investment bank estimates before they provide the capital to develop Wiluna.
Dryblower on the obstacles awaiting Wiluna http://www.miningnews.net/StoryView.asp?StoryID=798350828, 8 April 2013 DIRECTORS and staff at Toro Energy had every reason to pop the corks on a few bottles of champagne last Tuesday when the Australian government provided environmental approval for its Wiluna uranium project in Western Australia, though Dryblower hopes it was just Jacob’s Creek and not Moet.
Keeping the good stuff on ice for a little longer is probably a good idea because even though one hurdle has been cleared Wiluna and Toro have a few more to clear before the serious celebrating can start. Read more »
New mine to ship uranium through NT, SAhttp://www.skynews.com.au/businessnews/article.aspx?id=860386 April 4, 2013 A new West Australian mine will likely ship uranium concentrate through two other states.
The federal government on Tuesday approved Toro Energy’s $269 million Wiluna uranium project, 30km south of the Wiluna township and about 960km northeast of Perth.
Toro managing director Vanessa Guthrie says shipping is likely to start from 2015 using existing rail lines between South Australia and the Northern Territory.
‘We would take it to Port Adelaide then rail through to Darwin as currently happens with the other co-shippers,’ she told ABC Radio.
The Wiluna mine will become Australia’s sixth producer of uranium and the first in Western Australia.
Women call shots at U-miner Nick Butterly Canberra, The West Australian April 3, 2013,
Dr Guthrie is managing director of Toro and Dr Smyth is its non-executive chairman.
Dr Guthrie acknowledged it was unusual for a miner to have both a female chief executive and a chairman…..
Dr Smyth said the fact a mining company headed by two women was succeeding showed how the resources industry was changing and stereotypes were being broken down. http://au.news.yahoo.com/thewest/a/-/wa/16515070/women-call-shots-at-u-miner/
Christina’s comment – “Oh yeah! - more like the stereotype of giving the impossible jobs to women!”
NGOs release alternative report to Uranium Implementation Committee
Queensland Nuclear Free Alliance March 18, 2013
High Risk – Low Returns: the case against uranium mining in Queensland is the NGO and civil society response to the LNPs undemocratic decision to go ahead with uranium mining in our state.
Read the report http://qnfa.files.wordpress.com/2013/03/180313highcost-lowreturn-uinqld.pdf
In October 2012 the LNP government broke its clear commitment not to allow uranium mining in Queensland. This commitment was the position of the LNP at the March 2012 state election and was reaffirmed after they took office. In the absence of open, inclusive and evidence based policy making the Newman LNP government has set up the Uranium Implementation Committee. The Committee has not sought broad community input and has not been asked to assess the arguments for and against uranium mining in Queensland. The Committee’s mandate is the far narrower task of recommending how uranium mining should be managed, not whether it should occur.
Why should Queensland forego the economic benefits of uranium mining when some other states permit uranium mines? In a nutshell, it is because the economic benefits are grossly overstated and are outweighed by the wide-ranging environmental, public health and weapons proliferation problems and risks.
Uranium accounted for 0.19 per cent of Australia’s export revenue in 2011/12 (the last available figures). By the most generous estimate, uranium accounts for 0.015% of all jobs in Australia. For Queensland, there is the additional limitation that the state has around just 2% of Australia’s uranium resources. Clearly, the industry has no capacity to deliver significant economic or employment benefits.
Instead of acknowledging the extremely limited economic potential of uranium mining in Queensland the LNP state government, the Australian Uranium Association and the Queensland Resources Council have continued a pattern of extravagant and unsubstantiated claims regarding jobs, revenue and royalties. Enthusiasm is no substitute for evidence and limited sectoral self-interest is not the same as the public interest. Read more »
Time the NT got resourceful, ABC Rural By Caddie Brain , 19 March 2013 ”……..Uranium exploration projects seem to be struggling to raise capital more than any other resource, with investment down by 70 per cent.Oil, gas and petroleum on the other hand is booming, with an unprecedented 9 per cent of the Territory now subject to petroleum licences or licence applications…..
the Northern Territory Government says it’s concerned that so few projects have made the transition from exploration to mining over the past decade. The last mine was opened in 2006, and there’s been no major greenfield sites developed in the last 20 years.
In his opening remarks, Mines and Energy Minister Willem Westra Van Holthe said while it will support further minerals and petroleum exploration, it’s likely that major projects will rely on foreign investment to get off the ground….. http://www.abc.net.au/rural/content/2013/s3719273.htm
WA Should Leave Its Uranium In The GroundNew Matilda By Dave Sweeney, 6 March 13, “…….Toro Energy — a small and unproven uranium company — is seeking to open WA’s first uranium mine near Wiluna in the East Murchison region, around 600 kilometres north of Kalgoorlie. Toro has no proven corporate mining experience, and their costly and controversial project and is facing strong community, political and civil society opposition.
Toro Energy’s major shareholder, OZ Minerals, has described Toro as “a tiny company” and a “non-core asset” and Toro is facing severe financial constraints. The proposed Wiluna uranium mine is on the Lake Way arid zone lake system which includes mulga and acacia shrub land and sand dunes and spinifex plains. It is also home to a number of unique and endemic groundwater dependent plants and animals.
Despite attracting over 2000 formal public objections, state government support has seen the mine fast tracked through the state environmental approval process.
Even so, Toro’s hopes to have the project approved ahead of the state election have now stalled. Federal environment Minister Tony Burke has extended his decision-making time and requested further information on how the mine would impact on precious regional water resources and manage its radioactive mine wastes.
Given the clear policy difference between the two major political parties on whether the uranium trade has any place in the West, this lack of full and final state and federal approval means the Toro project is even more vulnerable and uncertain…… Read more »
CLP Holdings, the Hong Kong based company that is one of the largest power companies in Asia, said it wouldn’t invest any more money in coal-fired generation in India following the disastrous results of its latest 1,200MW investment…… It will focus entirely, it says, on renewables such as wind and solar from now on in India.
Fossil fuels put on notice – the party is about to end REneweconomy, By Giles Parkinson 4 March 2013 The Australian and the global fossil fuel industry have been given stark warnings by two heavyweights of the international finance sector that their future will not just be constrained by political decisions to limit emissions, but by the lack of, or the high cost, of finance.
The first warning comes from Deutsche Bank, which says that China’s use of thermal coal is likely to peak within a few years, and by 2017 it could become a net exporter of thermal coal rather than a large importer. This, says Deutsche Bank, is likely to have a significant impact on coal prices.
The implications for the Australian coal sector, and its massive expansion plans in ports, mines and rail infrastructure in Queensland and NSW – led by the likes of Gina Rinehart and Clive Palmer – is that the long term price of thermal coal will not be sufficient to make these investments profitable. They could, in fact, become the acts of the greatest futility if they go ahead.
The second warning comes from leading credit ratings agency Standard & Poor’s, which in a report released on Monday predicts credit downgrades and negative outlooks in the oil sector because of the potential carbon constraints driven by global climate change policies. Read more »
Five sizing up uranium
Courier Mail 1/3/13
QUEENSLAND’S uranium resource has been estimated at 40,000 tonnes, with five companies expected to vie to be the first to develop it.
AREVA Resources Australia, Paladin Energy and its associate Summit Resources, Laramide Resources and Mega Uranium are in the mix, according to the Australian Uranium Association.
But the resource estimate has led to environmentalists claiming the industry is nowhere near as viable as the Government and the industry had previously claimed.
The Australian Conservation Foundation said that estimate would be worth only $3.36 billion on current spot prices, 75 per cent lower than the industry’s previous estimate of $18 billion.
‘‘In the case of Queensland, claims made about in-situ resources need to factor in the technically difficult – and therefore uncertain and potentially expensive – nature of a number of these deposits,’’ the ACF’s Dave Sweeney said.
‘‘Obviously there is a vast chasm between the two figures of $18 billion figure and $3.36 billion – the October 2012 figure is 5.4 times higher than the February 2013 figure.
‘‘Put another way, the value of Queensland’s uranium resource has fallen by $14.64 billion in the short space of four months.
‘‘If this pattern continues, the value of Queensland’s uranium resource will fall to zero in March 2013.’’
However, only about 10 per cent of the uranium market is on the spot price with the rest negotiated in long-term contracts that differ widely from the current market price.
The ACF is pushing the debate towards a comparison of the industry’s viability against its potential impact and have made a submission to the State Government’s implementation committee headed by Paul Bell which will report in March…
The situation in Europe, and of course in Japan, is even worse. Again, and despite the absence of cheap gas, the economics simply don’t stack up
[China's] plans for renewables have been steadily upgraded, China’s nuclear plans were scaled back substantially after Fukushima…. the establishment of a track record of safe construction and operation in China will take at least a decade, which means that any global renaissance won’t start delivering benefits until after 2030.
the current decline looks set to continue for a long time. Unless new mines are profitable at prices of $40/tonne or less, they will probably be uneconomic.
Uranium exports: bonanza or bust? http://johnquiggin.com/2013/02/23/uranium-exports-bonanza-or-bust/ February 23rd, 2013 John Quiggin Note: The usual sitewide ban on discussions of nuclear power is lifted, for this post only
Queensland’s ban on uranium mining was lifted last year, and a committee is due to report soon on the conditions under which mining might be restarted. As recently as a year ago, the prospects for uranium exports looked bright, despite the Fukushima disaster. In March last year, the Bureau of Resource and Energy Economics predicted “prices close to $100 a pound between now and 2015, rising to $124 in 2016 and $141.6 in 2017, in constant 2011-12 Australian dollars.”
In reality, however, the price has fallen to $US43/pound in early 2013 and looks set to decline further. Looking ahead, the future of nuclear power looks bleaker than at any time since the industry began. Read more »
Billionaire Miner Fights Rivals to Halt Digs on His Ranch. Business Week. By Elisabeth Behrmann and Joe Schneider on February 17, 2013 Andrew Forrest, Australia’s richest man who made his fortune digging up iron ore, is fighting bids to exploit the mineral wealth under his own half-a-million acre family ranch in the nation’s remote northwest outback.
Forrest, 51, founder and executive chairman of Fortescue Metals Group Ltd., the biggest seller of high-yield debt in the mining industry, sued to block attempts to search for uranium on his Minderoo ranch and last month failed in a bid to halt sand mining on the property….
“In Australia, by law, you only own the top meter, everything underneath, that is owned by the people of Australia,” Peter Strachan, a resources analyst at Perth-based StockAnalysis, said in a phone interview. “If someone puts in a request to explore on your land, you have to deal with that and make sure you’re compensated for access.”…..
Forrest is also fighting on a second legal front. Cauldron Energy Ltd., chaired by another mining entrepreneur, Tony Sage, applied for exploration licenses over some of Minderoo on April 4 for its Yanrey uranium project. Forrest & Forrest filed objections on May 8. A hearing date hasn’t been set yet………http://www.businessweek.com/news/2013-02-17/billionaire-miner-fights-rivals-to-halt-digs-on-his-ranch