With demand falling, prices are falling with it and the once burgeoning coal industry is faltering. With the drop in coal prices, the closure of coal sites by BHP Billiton along with the QLD Government’s decision to hike coal royalties, speculation is mounting that the industry will remain volatile as Australia’s competitiveness within the market weakens.
A recent statement by Mitchell Hooke, chief executive of The Minerals Council of Australia highlighted the issue the resources sector is facing.
In what came as a warning to both industry and policy makers alike, Hooke says Australia’s ‘deteriorating reputation as a place to do business and the threat this poses to our ability to capture market share and future investments,’ means Australia is losing out to ‘resource rich’ economies.
He went on to say that minerals resource development is crucial but it will “take hard work from both industry and government to secure the economic opportunity that is currently at risk.”
The issue was again highlighted by He Fan, adviser to China’s central bank and finance minster, who recently announced that he did not expect the country to embark on a fresh economic stimulus with the country downgrading its growth for the year to 8 per cent.
At a conference in Canberra Han suggested this was bad news for Australia’s coal industry as ‘strong demand for commodities is not sustainable in the long run.”
While coal has traditionally been used as an energy source for centuries, many question the sustainability of the resource moving forward. Mining coal is high-cost at a high labour output. This is especially true in Australia which has the highest cash cost of any country, 30 per cent above the global average. Further to this, the environmental impact of burning coal and the emissions created has been attributed to the greenhouse gas effect and rising pollution levels.
In comparison, uranium is a cleaner energy source with less waste output and less is required to create more energy. It has been estimated that Uranium-235 can produce 3.7 million times as much energy as the same amount of coal. However, long-term environmental impacts, safe storage of nuclear material and the concern of weapon production are all reasons why critics of the mineral say it is too dangerous to mine.
With uranium supply struggling to meet overseas demands, analysts say uranium’s ‘low-cost emission profile and its ability to produce low-cost power’ will ensure nuclear power generation ‘will continue to play a key role in future global power supply’
Analysts are also tipping the resurgence of the industry, as demand from China and India is set to grow, but say Japan’s decision to close all of its nuclear power stations by 2030 does create uncertainty around how much uranium will be required for the world’s future energy needs. Uranium prices fell to their lowest price since 2010 following the announcement, which uranium sceptics point to as a reason not too get carried away with uranium enrichment in Australia.
While Australia is uranium rich, with over 40% of the world’s recoverable uranium, we currently only export 19% of this to the world market. The Uranium Association of Australia (AUA) predicts that if the uranium industry was able to reach its full potential, exports would increase from 10,000 tonnes a year to 28, 500 tonnes a year. This would equate to between a $14.2 billion to $17.4 billion net value to the Australian GDP.
However, with controversy surrounding the mining of uranium in Australia, the industry faces challenges in getting projects off the ground.
A State Matter
Currently the mining of uranium is only allowed in the Northern Territory, South Australia and more recently in Western Australia. It is estimated that $887 million is made by the export of uranium from these projects and with the demand for uranium set to grow, many say we need to step-up activity or risk losing money to other countries.
The issue of uranium mining is heating up in Queensland and with a recent push to have the uranium ban overturned, Resources Minister Andrew Cripps has called for a discussion surrounding the issue.
The AUA along with The Queensland Resource Council (QRC) are lobbying the liberal government to show ‘political courage,’ and put the issue of uranium mining back on the table. In a statement released by both organisations, aimed at the QLD government, they say:
“Developing Queensland’s uranium deposits will create new jobs, support new business and help to consolidate the state’s reputation as a leading mining investment destination.”
The statement goes on to say that overturning the previous government’s ban will take political courage and that the decision will be ‘in all Queenslander’s best interests’.
With rich uranium potential in QLD and other states, AUA’s communication director, Simon Clarke, believes it is only a matter of time before uranium mining becomes the norm across much of the Australian landscape.
“The AUA is currently pressing the Newman Government in Queensland to permit uranium to be mined there. If exploration in New South Wales discovers commercially-viable amounts of uranium, the AUA will urge that the Government there permit it to be mined. And the AUA believes the Liberal National Party Government in Victoria should consider embarking on the development of uranium exploration and mining. Uranium is well down the path to being accepted throughout Australia as a mainstream mined commodity. Persistent, patient advocacy will get it there, “he told Australian Mining.
The QRC and AUA now plan to issue a major report on uranium opportunities in Queensland.
'This report will of course also address the full range of community concerns around safety and the environment,' said Michael Roche, QRC’s chief executive.
Roche pointed to the monetary benefits already being experienced in WA since the state overturned a uranium exploration ban.
'In the three years since the policy change in WA, exploration for uranium in WA has taken off, totalling some $234m compared to just $53m in Queensland,” he said.
However, the push has been met with a hostile response by activists who claim that uranium mining is not the answer.
Australian Conservation Foundation spokesman Dave Sweeney said the QLD government should not forget its election promise of upholding the uranium ban.
Sweeney went on to say that the uranium industry is one of ‘headlines and heartaches’ and says the foundation is committed to ‘highlighting the costs and consequences (of uranium mining) both here and overseas.”
Sweeney told Australian Mining that uranium was, ‘a mineral unlike any other.’
“It is highly contested and controversial, and there is no compelling reason that would force QLD to change their mind,” he said.
He went on to say that instead of nuclear energy, the debate should turn to renewable energy as the next big industry in Australia.
“The future energy needs are far better met by renewable energy. We should look at being the smart state as well as the sunshine state with the development, application and delivery of renewable energy.”
The Western Australian Government have approved Toro Energy's Wiluna uranium project which is set to produce 1.8mlbs U3O8 equivalent (1200 tonnes UOC) per annum for a minimum of 14 years.
The final environmental approvals were granted by WA environment minister Bill Marmion, who stated that the decision took three weeks, during which he consulted mines minster Norman Moore, and the minister for indigenous affairs.
The announcement was welcomed by Toro Energy's managing director Greg Hall, who said that this approval is the first since the decision in 2008 by the government to allow uranium mining.
"This represents a true achievement by many people who have worked diligently to deliver a project that will provide benefits to the local community, as well as to Western Australia, in an environmentally sustainable manner," Hall said.
The project consists of two uranium deposits near Wiluna, and is the most advanced in the state.
NSW has also jumped in to the uranium race with the government announcing it is open to expressions of interest from miners wanting to explore Group 11 minerals, which includes uranium and thorium.
NSW Resources Minister Chris Hartcher said the exploration of uranium in NSW will ‘give the states economy a real boost.’
“We must look for every opportunity to join the resource boom under way in Western Australia, Queensland and South Australia,” Hartcher said in the statement.
The announcement follows the government’s controversial move to overturn the state’s 26-year ban on uranium exploration.
Legislation overturning the exploration ban passed through the state’s upper house unamended, despite opposition from Greens and Labor MPs, who said the government had no mandate.
If uranium mining becomes a reality in NSW the creation of jobs and economic growth for the state are certainties.
However, the move by the government does not come without controversy.
The Nature Conservation Council of NSW has issued a charter which aims to stop the mining of uranium in NSW. The “NSW Uranium Free Charter” states that “the current push to allow uranium exploration is a direct threat to workers' safety and the long-term health of our environment and communities.”
“As history shows, uranium mining makes little economic sense and leaves a lasting radioactive legacy.”
But while the uranium debate continues, companies and indeed governments worldwide are still looking for ways to produce and sell baseload electricity with minimal greenhouse gas emissions and this is where the use of coal as a sustainable source of energy in to the future is met with serious doubts and where many believe the discourse surrounding the uranium debate needs to change.
When asked how uranium stacks up when compared to other forms of energy generation, Clarke said that “nuclear energy across its lifecycle (mining, fuel fabrication, electricity generation and decommissioning) emits less carbon than solar energy and about the same as wind power.”
Clarke added that by ‘continuing good operational performance by uranium miners – in the environment, on safety measures… are having the gradual effect of improving the industry’s reputation and raising its standing in the minds of citizens.”
He goes on to say that the discourse surrounding the uranium debate needed to change and that “the nuclear industry must tell its own story better and explain to people why nuclear energy is a vital contributor to the fights against global warming.”