A new royal commission will examine the potential for South Australia to increase its role in the nuclear production chain, a move announced by premier Jay Weatherill on Sunday.
The inquiry will include an examination of the extent to which uranium ore is processed in the state, and whether further processing in order to value-add to the product.
Weatherill said he had previously held opinions against any further nuclear development in the state, including nuclear waste storage or power generation, however he was prepared to consider those options having changed more open-minded about the potential for economic benefits for the state.
“It seems that nuclear energy, at least in the large scale transmission form, is not something which would be economically viable in South Australia or even indeed the nation, although technological changes are occurring with much smaller nuclear generation plants,” he said.
“And of course [there is] the question of enrichment, adding value to the ore that we send over in a relatively unprocessed manner.
“All of those things are within the scope of this inquiry, some would be less likely than others.”
Weatherill said South Australia had been part of the nuclear fuel cycle for 25 years through mining at BHP-operated Olympic Dam, for which uranium ore represents 25 per cent of production (70 per cent copper).
Falling copper and uranium prices in 2012 caused BHP to scrap their plans to increase production at the Olympic Dam mine, however the company has renewed those plans last year with $650 million earmarked for the next research phase of the project.
BHP have previously revealed the Olympic Dam project has a longer life expectancy than any of it's other assets, estimated at 200 years.
Support for the move has come from a number of areas, including former Labor prime minister Bob Hawke, who for decades has lobbied for the storage of nuclear waste in South Australia.
“Global warming is a very real threat and nuclear power generation is an important part of dealing with that challenge,” he said.
“With storage, if we could make it safer for the world, it would be a win-win situation.
“(Jay) realises this is a controversial issue. I’ve always said that ignorance is the enemy of good policy and a royal commission will establish discussion free of prejudice.”
Nuclear physicist and former Telstra chairman Ziggy Switkowski said the commission’s findings could open the door for nuclear generation and construction of nuclear-powered submarines.
The Minerals Council of Australia welcomed the decision, with executive director for uranium Dan Zavattiero stating the decision to launch the inquiry “should be widely applauded”.
“It is clear nuclear power will play a critical role in sustainably producing electricity in the world in the 21st century,” he said.
“This is clear in forecasts by the International Energy Agency and in repeated calls by the IPCC for the world to triple or quadruple all low emissions energy sources including nuclear power.
“Australia’s uranium industry is well established, highly regulated and second only to black coal in terms of Australia’s primary energy production.
“It operates safely and responsibly and forms an outstanding basis on which to explore further potential in the nuclear fuel cycle.”
MCA said South Australia held 80 per cent of Australia’s uranium resources and produced 4399 tonnes of uranium for export in FY14.
South Australian Chamber of Mines and Energy chief executive Jason Kuchel said there were a number of places where spent nuclear fuel could be stored due to stable geology throughout much of South Australia.
“An important point to make is that if it was spent nuclear fuel to be stored it should be looked at as a storage facility for fuel that could be used once again as technology improves,” he said.
“Already nuclear reactors are capable for utilising uranium to a greater extent than they could when nuclear power was first established, and certainly they anticipated it as a fuel of the future, so you want it somewhere that you can access it again.”
Kuchel said the prospect of increased uranium production and export from South Australian mines would enable greater access to nuclear power in countries such as China and India which have drastically increasing power needs and chronic problems with air pollution.
“The reality is for places like China and India with massive air pollution and health problems for their population… air pollution is their number one issue, and to actually begin to deal with that issue, they need to be looking at a much larger nuclear power program than what they are currently doing,” he said.
“Currently China is planning to build between 80 and 120 nuclear power plants.
“But the reality is based on current growth rates, their reliance on nuclear power will only go from 2.5 to 3.5 per cent, and they are continuing to build coal and gas fired power stations at a much faster rate.
“So they’re continuing to add to their air pollution problems, and their nuclear program needs to be much larger to have some effect, at the very least to not make the problem worse let alone make it better, and if Australia encourages that growth in the nuclear industry overseas it will do a great deal for their air pollution as well as reducing greenhouse gas emissions.”