OPPOSITION TO URANIUM MINING

The history of the uranium industry is full of well documented and anecdotal examples of delays in project development because of public opposition to uranium mining. In some cases the opposition is based on specific concerns, while in other cases it is based on a broad anti-nuclear philosophy.

This issue is of concern to the uranium industry because of its potential to disrupt development and to jeopardize availability of supply. Whether a project can be developed and, if so, when can become more of a political decision than an economic one. While there are many examples of delayed development, a few are of particular importance because of the magnitude of the resources affected.

6.1. AUSTRALIA

Australia has had a history of opposition to uranium production. In 1983, the Australian Labor Party (ALP) implemented its ‘three mines policy’, which limited production to only three mines — Nabarlek, Ranger and Olympic Dam. When Nabarlek ceased operations in 1988, the policy effectively became a ‘no new mines policy’, as the ALP refused to issue export licences to new mines, thus eliminating any incentive to develop new projects. The ALP was replaced by a pro-business coalition Government in 1996, which rescinded the no new mines policy, placing development decisions back into the realm of marketplace economics. This decision at the Commonwealth level did not,

however, end opposition to uranium mining. Instead, it moved back to the local and state levels, where it had always had its roots.

At the state level, there is diversity of policy as far as uranium mining is concerned. South Australia, which hosts the Olympic Dam and Beverley mines, promotes uranium exploration, development and mining. At the other end of the spectrum, the anti-uranium mining ALP Government won re-election in Western Australia in 2005, and has vowed to continue its opposition to uranium production. This policy has had an impact on three projects — Kintyre, Yeelirrie and Manyingee — with combined resources and production capacities of 80 000 t U and 3700 t U, respectively. There are other resources that could be affected by the ALP policies, which also have a negative impact on uranium exploration in Western Australia.

At the level of local opposition perhaps no other project has received more publicity than Jabiluka in the Northern Territory. Resources and production capacity at Jabiluka total 132 000 t U and 2290 t U, respectively.

Jabiluka, which was discovered in 1971, has faced a series of development delays, brought on by a combination of market forces and opposition from Aboriginal owners, with no real end to the delays in sight. The Aboriginal owners of the project site currently hold a veto over development at Jabiluka.

Local and state opposition to mining at Kongarra also exists. Likewise, all uranium mining in Queensland is opposed by the state.

6.2. NEW MEXICO, UNITED STATES OF AMERICA

Western Australia is by no means alone in its opposition to uranium mining. The state of New Mexico, which was once the leading US uranium producing state, now has a well organized and well financed anti-uranium mining coalition, which includes environmental advocates and Native American tribes. This coalition has effectively blocked development of the Church Rock and Crownpoint ISL projects, despite expenditure of approxi-mately 20 million US dollars in permit and licensing activities by the owner of the projects. Between them, these projects have resources totalling 40 300 t U and production capacities of 1400 t U. The Navajo tribe, which controls land in the Crownpoint and Church Rock areas, has passed legislation that would effectively place a 20 year moratorium on uranium mining on lands that it controls. There is some uncertainty as to whether this moratorium will apply to lands in the Crownpoint area, but if it does it could effectively ban development of at least part of the Crownpoint resources until 2025.

6.3. OPPOSITION TO URANIUM MINING AND EXPLORATION EXPENDITURES

Opposition to uranium mining hangs like the sword of Damocles over the industry, not only in Western Australia and New Mexico, but also in other parts of the world. Figure 9 compares low cost uranium resources (identified resources recoverable at less than US $40/kg U) and 2002 exploration expendi-tures in Australia with those of Canada, which ranks third in low cost identified resources. Australia, with 38% of worldwide low cost identified resources attracted only 3% of worldwide exploration capital in 2002. Canada, on the other hand, with its potential for discovery of large, high grade, unconformity related deposits and less opposition to uranium mining attracted 24% of 2002 exploration expenditures compared with 15% of low cost identified resources.

Australia has potential for discovery of both unconformity related deposits (e.g. Jabiluka and Ranger) and deposits amenable to ISL (Beverley and Manyingee). We should not necessarily expect an exact one-to-one relationship between resources and exploration expenditures, but the question should be posed of why the world’s leader in low cost resources has attracted so little in the way of recent exploration expenditures. The likely answer is that the risk is too high that discovery of low cost resources does not guarantee

FIG. 9. Comparison of low cost resources and exploration expenditures.

timely development of those resources. The same situation holds true in some parts of the United States of America (USA). Well organized opposition to uranium mining has virtually eliminated exploration in some resource-rich states, including New Mexico. Whether or not there is a formal moratorium on uranium mining may not matter. Uncertainty can create a de facto moratorium, as no company will risk exploration capital where a discovery may not be rewarded by the opportunity to develop a mine.

6.4. OPPOSITION TO MINING: A WORLDWIDE CONCERN

We can point to current examples where opposition to uranium mining has stymied development and discouraged exploration. There may, however, be an even broader concern related to the asymmetry between uranium demand and production worldwide. Figure 10 compares uranium requirements related to reactors in 2003 with production in the same year for the four countries with the highest uranium demand. These four countries accounted for more than 60% of demand but collectively contributed only about 12% of 2003 output. For comparison purposes, Table 6 shows the percentage of worldwide uranium output contributed by the four leading uranium producing countries in 2003. A comparison of Fig. 10 and Table 6 shows that the leading producers of uranium are not the leading users.

FIG. 10. Comparison of percentage of 2003 uranium reactor requirements and production.

Does this asymmetry between uranium producing and consuming countries potentially pose a future threat to the industries of some of the major producing countries? Australia, Kazakhstan and Niger do not currently have civilian nuclear power industries, so all of their uranium production is available for export. Uranium is an important source of hard currency for Kazakhstan, so its industry is at present insulated from broad philosophical concerns related to uranium production. Similarly, with higher uranium prices, revenue from uranium exports is again important to Niger’s economy, and its uranium operations are relatively insulated from organized opposition to uranium mining. Can it be guaranteed, however, that the same holds true for Australia, where the anti-uranium ALP is waiting for a return to national power and possible reimposition of the no new mines policy? Could the time come when the Australian people are no longer willing to be exposed to the risks (perceived or real) of producing uranium to satisfy demand in countries with highly developed nuclear power programmes but with limited resources or uranium production industries?

These are broad philosophical questions, but in a study that projects uranium supply and demand up to 2050, they cannot be entirely ignored, particularly when the future prospects of large, low cost, resources and production capacities are finely balanced. There is no evidence that Australia or any other country is moving towards a formal national ban on uranium production. Nevertheless, a globally well diversified uranium production industry is critical for offsetting such risks. At the same time, the distribution of low cost uranium resources is an accident of geology. Therefore, loss of availa-bility of even a small percentage of low cost production capacity would require development of higher cost resources, with an accompanying impact on market price.

TABLE 6. LEADING URANIUM PRODUCING COUNTRIES IN 2003

Producing country Percentage of 2003 production

Canada 30

Australia 22

Niger 9

Kazakhstan 8