Uranium industry will fight back: ERA

Energy Resources Australia says while demand for uranium has hit a low point, nuclear power will be an important part of future energy needs and the long term view for the market is positive.

In its annual report yesterday ERA said the spot price for uranium plunged last year, reaching $US43.38 a pound after the 2007 peak of $US135 a pound.

The company said it was trying to use a variety of pricing mechanisms to avoid the low spot price, but weak demand had made conditions difficult.

Despite poor conditions the company said it was confident the market would improve in the long term as power generation turned away from fossil fuels.

“Nuclear power is the only low carbon emitting generation technology that delivers large volumes of base load power,” it said.

ERA said while Japan had turned off most of its nuclear reactors it was expected to slowly return to nuclear power.

“The general consensus is that while public support for nuclear power in Japan has waned in the wake of Fukushima, ultimately the country has little choice but to rely on nuclear for a significant portion of its energy needs,” it said.

Looking to the future ERA said China would continue to drive demand, and new uranium deposits were mostly located in high cost regions, which could boost prices further.

“The longer term picture for uranium prices is much brighter,” it said.

“Once Japanese reactors re-start and inventory is cleared from the market, it is expected that a supply side shortage will drive prices higher.”

ERA mines uranium from the Ranger mine in the Northern Territory and is 68.4 per cent owned by Rio Tinto.

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