Australia Uranium Sales Up As World Demand Rises

Australia Uranium Sales Up as World Demand Rises

Planet Ark

September 8, 2005

SYDNEY - Australian uranium export earnings grew dramatically in fiscal 2005 as global demand for the once-shunned metal pushed prices up sharply, government trade figures released on Wednesday showed.

Earnings from uranium, increasingly prized to drive nuclear generators as nuclear power regains favour worldwide as a viable source of energy, rose 30 percent year-on-year in the 12 months to the end of June to A$475 million ($361 million).

Australia holds about 40 percent of the world's uranium but has no nuclear industry of its own, relying solely on exports to 36 countries holding bilateral safeguard agreements for revenue from the material.

It hopes shortly to begin formal talks on allowing uranium exports to China.

Uranium demand waned in the 1980s as cheap oil and other energy sources such as solar power compounded a public perception that nuclear power was unsafe. Prices for the material sank to as low as $10 a pound, as what demand did exist was more than fed by a huge supply overhang.

But with much of the surplus now gone, record-high oil prices and growing concerns over coal emissions, uranium has been making a comeback, analysts said.

"Currently the world has 441 operable commercial nuclear power plants and a further 30 are under construction, principally in Asia," said commodities forecaster Resource Capital Research. The amount of uranium plants use is also growing, it said, predicting current prices of around $30 a pound would stick through next year.

Australia has only three operating uranium mines, which are owned by BHP Billiton Ltd./Plc, Rio Tinto Ltd./Plc and General Atomics of the United States.

But as many as 25 mining companies are exploring for the metal in Australia's remote Northern Territory alone, according to the Australian Minerals Council.

"Coking and steaming coal continue to top our resource charts ... but uranium is coming through as a potentially strong performer for Australia," Australia's Industry Minister, Ian Macfarlane, said in a statement.

Strong global demand for coal, iron ore and other industrial raw goods lifted total Australian mineral export earnings almost a third to A$67.4 billion in fiscal 2005, according to te Australian Bureau of Agricultural and Resource Economics.

It said the minerals and energy sector reaped a 29 percent lift in export earnings, with coking coal needed to make steel recording the biggest rise, up 65 percent to A$10.7 billion.

Iron ore export revenue grew 53 percent to $A8 billion, while revenues from steaming coal used in power generation was up 45 percent to A$6.3 billion.

($US1=A$1.30)