Sunday, September 7, 2008

The Increasing Importance of Uranium

It's going to be very interesting to see whether Australia now moves toward selling uranium to India. But even without that a lot is going on with respect to the politics and economics of uranium at the moment.

The week before last we had the extraordinary spectacle of Peter Garrett approving the expansion of the Beverly uranium mine in South Australia. Apparently the joke about Garrett now is "every appearance a sell-out."

Last week the Chinese company Sinosteel placed a bid to develop a large uranium mine in South Australia. This places the totally opaque foreign investment rules here under still more pressure. If the Right in New Zealand thinks it is unclear what is and is not a strategic asset they should take a look at the situation in Australia.

The Foreign Affairs minister Steven Smith threatened to reneg on a deal made by the Howard government to sell uranium to Russia in response to the situation in Georgia with a predictably stern response from the Russians.

Why all this interest in Australian uranium?

There is an urgent need to expand world uranium production which currently stands at around 64% of consumption. (Whether this is a serious problem for the nuclear power industry is debatable. The Three Mile Island and Chernobyl accidents depressed demand in the 80s to the extent that there are currently very large stockpiles.) China in particular is rapidly building nuclear power reactors and needs to assure its supply of fuel. Australia has about 23% of known reserves. Canada and Kazakhstan are the other countries with large reserves and mining industries.

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