Japan Nuclear Crisis Not to Affect Australia's Uranium Export

Perception of the nuclear industry has been seriously hurt since the Fukushima No. 1 plant in Japan was damaged by a massive earthquake and tsunami. However, political leaders and experts expected Australia's uranium export is unlikely to be affected by the nuclear crisis.

Although Australia uses no nuclear power, it is the world's third-ranking uranium producer behind Kazakhstan and Canada, exporting some 9600 tonnes of uranium oxide concentrate annually worth over 1.09 billion U.S. dollars.

According to the World Nuclear Association, Australia also holds the world's largest uranium reserves, with 23 percent of the total.

Three uranium mines are operating throughout Australia, and a huge expansion is under way for the uranium industry.

In the wake of the nuclear crisis, Russia's state-owned uranium miner, JSC Atomredmetsoloto (ARMZ), last week withdrew its one billion U.S. dollars takeover offer of Australian uranium miner, Mantra Resources Ltd. and shares of Mantra Resources Ltd. has then plunged 29 percent on Thursday.

Shares of Energy Resources of Australia, the world's fourth- largest uranium miner, also fell to a six-year low shortly after the crisis. The crisis has also caused an increasing number of other countries, including France and Germany, to reconsider their use of nuclear power.

According to Australian Uranium Association Chief Executive Michael Angwin, the problems at the Fukushima nuclear power station in northern Japan would create some uncertainty as governments and operators learnt the lessons of the Japanese emergency.

However, he said the economic and other factors pushing countries to use nuclear power remain unchanged.

"The worlds demand for nuclear power is increasing and the drivers of that are the same today as they were (on March 11)," Angwin told Xinhua last week.

"That's economic and population growth which requires electricity. Countries are trying to diversify their energy portfolio including by growing nuclear power in order to give themselves energy security and are investing in nuclear power because it's a clean energy in response to climate change.

"So nothing has changed in terms of the fundamental drivers of demand for uranium or nuclear power in the last five days and I think in the absence of any fundamental change drivers Australia's uranium industry will continue to increase its production and exports and possibly even its share of the world's supply of uranium."

Australian Prime Minister Julia Gillard said the federal government is not reconsidering the sale of uranium following the nuclear crisis in Japan.

"We do export uranium and we will continue to export uranium," she told Sky News on Sunday. "Countries around the world will make their own choices about how they source their energy."

The South Australia state government shared the same view of Gillard, with state Mineral Resources Minister Tom Koutsantonis called for enrichment of uranium in South Australia.

The minister said there are 440 operating nuclear power plants in 30 countries, producing 14 percent of the world's energy. There are also 72 new plants waiting to be commissioned as energy needs grow globally.

Koutsantonis told ABC News on Monday that the crisis will not stop long-term increasing demand for uranium in a world needing low emission fuel to generate electricity, and has called for the federal government to build new uranium mines and enrich energy strategy in the state.

Meanwhile, Treasurer Wayne Swan admitted that disaster in Japan is likely to be a short-term impact on some of the nation's exports in coming quarters.

For instance, Japanese demand for steel-making inputs could fall in the near term following the closure of several large steel- making plants and the disruption to Japanese manufacturing. However, he said Japanese demand for energy products such as uranium, liquefied natural gas (LNG) and thermal coal could increase due to energy demand driven by rebuilding efforts.

There are 55 nuclear reactors in Japan, and about 10 of them shutdown as a result of the earthquake. Apart from that, the rest of Japan's nuclear industry is operating as normal.

Angwin said that the crisis will surely spark an international debate on the use of civilian nuclear energy, but Japan and other countries that have nuclear plants will continue to purchase uranium from Australia.

Japan is an important uranium customer of Australia. Other major buyers of Australian uranium oxide include the United States and the European Union.