(September 20, 1996) On September 6, the Uranium Institute (UI) issued a warning: current plans for uranium production are unlikely to be sufficient to meet future power reactor requirements, even though world uranium reserves are more than adequate.
(458.4551) WISE-Amsterdam - At the industrial association's annual symposium, UI published the latest edition of its market report on future uranium supply and demand. The report covers the global nuclear fuel market up to the year 2015. It reviews future nuclear generating capacity and the sources of nuclear fuel available, as well as gives projected supply- and-demand figures for three different scenarios.
The report concludes that only with the combination of the lowest requirements scenario and the highest-supply scenario will uranium production be sufficient to meet the demand, and then only from 2002 onwards. Otherwise demand may exceed the present planned supply by as much as 15,000 tons of uranium per year. The report predicts that in the year 2000, the lowest estimate of requirements would be 65,600 tons of uranium, while the highest projected supply figure would be 61,400 tons. For 2010, the lowest predicted requirements would be 66,900 tons, with supply ranging from 58,300 to 70,100.
The UI issued details of plans by Australia, Canada and the U.S. to increase uranium production in response to different factors.
According to the UI, 1995 may have marked a turnaround in the world uranium market that is continuing in 1996. After nine consecutive years of falling production between 1985 and 1994, last year's world uranium production rose 4.4% above the previous year to reach 33,275 tU. This figure, however, represents about 55% of annual reactor requirements (estimated by the UI at 61,400 tons). UI analysts now believe that there are only 80,000 tons of excess stocks left, equivalent to just over one year's requirement of the current world demand. After several years where half the demand was covered by new production, the uranium spot market prices have risen enough to stimulate and supplement 'positive' developments in the uranium mining industry. World uranium prices have almost doubled in the last two years to $16 per pound.
Australia, Canada, Niger and the United States led the world in uranium production in 1995. Although Niger's production capacity is not expected to change greatly in the near future, the other three countries are planning to expand uranium production in the coming years, though the reasons behind their planned production increases are different. In Australia the main stimulus to recent activity is the end of the former government's 'Three Mines Policy'. In Canada, recent announcements are very much part of a long-term plan to maintain supplies, while the planned increases in the U.S. appear to be almost exclusively price-driven. A brief summary of the planned production activities of these three major producers follows (including expectations, or should we say 'hopes'?):
Australia:
The election of the coalition government in March 1996 brought the "Three Mines Policy" of the Labor Party to an end. This allows Australia's uranium mines to seek approval for new projects. The abolition of the "Three Mines Policy", together with an anticipated rise in demand and a firmer spot uranium price, have led Australia's uranium production companies to plan significant increases in their uranium mining over the next couple of years.
For the first time since 1983-84, Australia's total uranium production exceeded 4,240 tU in 1995-96, including close to 2,930 tU from the Energy Resources of Australia Ltd. (ERA)'s Ranger mine and 1,400 tU from WMC's Olympic Dam mine. Both companies have already indicated that they intend to increase production to a combined capacity of about 8,000 tU from today's figure of 4,500 tU.
The ERA has already been granted final government approval to mine the Ranger 3 orebody, which it plans to bring into production in July 1997. Ranger 3 is reported to have proven and probable reserves of 48,010 tU. The ERA has also referred its Jabiluka (North Ranger) project for environmental assessment and expects to be producing by 1999. Together with Ranger 3, the 76,660-tU reserves of Jabiluka will secure production until 2,025. Western Mining Corporation Ltd. (WMC) is planning expansion at Olympic Dam and also later developing the Yeelirrie deposit. Olympic Dam capacity is currently about 1,500 tU and the plan is to double this, but even at this level the company expects to be producing from Olympic Dam in 120 years' time. Canning Resources Pty Ltd. (CRA) is investigating the possibility of bringing the Kintyre deposit into production.
Canada:
In 1995, Canada's uranium production reached 10,515 tU, its highest level since 1989 and an 8.5% increase over the 1994 figure. This was accomplished by producing 5,463 tU from Key Lake (Cameco and Uranerz), 3,147 tU from Rabbit Lake (Cameco and Uranerz), and 1,210 tU from Cluff Lake (COGEMA). Counter to the expansion trend, however, Rio Algom has now closed its Stanleigh mine at Elliot Lake.
Public hearings are scheduled to take place between September 4 and October 11, 1996, to review the McArthur River and Cigar Lake uranium projects. A 'positive' decision (for the nuclear industry) by the middle of 1997 would allow production at the sites to begin on schedule in 1999. McArthur Lake is managed cooperatively by Cameco, Uranerz and Cogema, and has estimated reserves of approximately 160,000 tU. Cigar Lake is managed jointly by Cameco and Cogema and has reserves of approximately 148,000 tU. Cameco has announced that it plans to raise capacity by 50% by the year 2005 to meet the "strong demand" from nuclear generators.
Canadian development plans are part of a long-term strategy on the part of the producers to extend the capacity in order to maintain Canada's position as the world's premier supplier of uranium. Production capacity will be rising beyond the year 2000.
USA:
According to the report by the Uranium Institute, perhaps the most significant indication of a changing attitude toward the production of uranium is occurring in the United States. While in 1994 the U.S. only produced 1,400 tU, it produced 2,360 tU in 1995. This represents a 69% increase in production in one year. This turnaround follows years in which the industry in the U.S. has been in steep decline.
The Uranium Resources Inc. (URI) is considering expansion plans that would triple its production capacity over a five-year period. The URI announced that its plan to increase the company's production in south Texas from approximately 770 tU per year to just over 1,150 tU per year was well underway and that the company was pursuing licenses and permits to begin production of 385 tU per year in New Mexico in the first half of 1998. The URI has also started production at its Kingsville Dome ISL (in situ leaching) facility. The URI is not, however, alone in expanding uranium production in the United States. The others include, but are not limited to, the following:
- Cotter Corp. plans to restart the Schwartzwalder mine in Colorado in 1997 and is in the process of getting permits to begin production in the year 2000 at its Charlie property in Powder Basin;
- U.S. Energy plans to restart production at Ticaboo, Utah, in 1997;
- Rio Algom has announced that U.S.$43 million would be spent to develop its Smith Ranch project in Wyoming so that the facility would be able to produce nearly 770 tU of uranium per year;
- IMC-Agrico is reported to be looking into restarting byproduct uranium production from its New Wales, Florida, facility early in 1997; and
- Plateau Resources is planning to bring the Shootaring uranium mill in Utah back into operation after 14 years on stand-by. Plateau Resources hopes to bring the mill, which was last operated in 1982, into production by the fourth quarter of 1996.
Source: NucNet, 26 August & 6 September 1996 / Reuter 6 September 1996
Contact: WISE Uranium, Peter Diehl