Australia has ‘welcome mat’ out for uranium investments

Toro Energy, the company vying to develop Western Australia’s first uranium mine, says Australia is in the perfect position to drive a new era or uranium exports to China and India.  

Addressing the annual PDAC conference in Toronto overnight, Toro’s managing director Dr Vanessa Guthrie told delegates that emerging powerhouse economies like India and China would drive a massive demand for uranium over the next decade.

Guthrie said Australia needed to leverage its position to secure a strong market presence in the uranium sector and act now on long-term offtake agreements and financing commitments.

“All current forecasts clearly point to a 20 per cent increase in operable nuclear reactors worldwide by 2025- just ten years away- with 85 per cent of that reactor growth coming from China and India,” Guthrie said.

“By that 2025 timeline, the emerging economies will account for 62 per cent of operable reactors around the globe.”

In real terms, this will see China go from 32 to 97 reactors by 2025; India from 23 to 34; and other Asian countries from 71 to 85.

Guthrie said all these new reactors will need Australian uranium, and that the country had a welcome mat out for uranium development and fresh investment in the sector.

Demand for yellowcake is set to outstrip supply from 2016, and with an expected shortfall of 60,000 tonnes of U30expected by 2018.

But the lagging price of the commodity since the Fukushima tragedy in 2011 has worked to hamstring investment, and drove nuclear sentiment to an all-time low.

After falling below $US29 per pound last May, the spot price for uranium has since recovered to reach $US38.75 this week.

It comes as Japan plans to turn on its reactors for the first time since the nuclear meltdown, and UBS predicts this means the market will continue to make ground, with the price to reach $US53 in 2016.

Guthrie said the upswing will bode well for the company’s Wiluna project, which has all the government approvals it needs to start mining.

“Wiluna will come into this growing global uranium market from a point where Australia exported 6000 tonnes of uranium concentrate in 2013-14 worth more than $620 million but we an increase that to more than one billion dollars in exports over the second half o f this decade by lifting outgoing shipments to nearer 9000 tonnes.”

“Wiluna, which has at least 36Mlbs at 930ppm average grade, has its eyes on commanding around 10-12 per cent of total export shipments.”

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