Uranium - The Future Is Still Nuclear

Published on Sunday March 27 2011

TWO weeks after the biggest nuclear crisis in a generation and a leading item on ABC radio news is that three workers have been taken to hospital in Japan for radiation treatment. Meanwhile, the toll from the Japanese earthquake and tsunami (killed or missing) is more than 27,000.

You might say that setting the radiation statistics at the still-dangerous Fukushima nuclear station against the wider disaster toll in Japan is meaningless … the story is far from over.

But what would be meaningful? Let's pit the reported radiation casualties in Japan against other casualty lists in alternative forms of energy. For instance, the number killed in coal mines: in China alone, the official estimate of fatalities inside the national mining industry is more than 2000 a year.

Advertisement: Story continues below

Yes, the future of nuclear energy is under immediate review but a number of indicators suggest that the review may turn in a surprising direction. The simplest indicator of what the market thinks will happen is uranium prices (that is ''spot'' prices, which represent about a fifth of all uranium traded). 

In the days after the Fukushima crisis, the spot price fell 20 per cent, but it has since rebounded 13 per cent to settle back at about $US60 a pound, suggesting business as usual in the broader uranium market.

At the same time, uranium stocks have generally mirrored the underlying change in the uranium spot market.

Extract Resources, a mid-sized ''pure'' play, which fell from $10.50 to $6.50 in the days after the Fukushima explosions, on Friday had climbed back to $8.47.

Australia is a global centre of uranium production. At the moment it has only three mines producing a combined volume of about 8000 tonnes a year, but the official forecasts from government agency ABARES is that this output will roughly double within four years.

Much of this expanded production may come from Western Australia where BHP has substantial deposits. There has been political objection to uranium production in WA but last week the state Labor Party announced it would review its anti-nuclear stance, with a report due to be released in June.

Clearly there is a sense - tentative still - that nuclear power and the uranium industry is not going to be hit as hard as many thought even a fortnight ago.

There may be more stringent regulation (hopefully); there may be a change to the nuclear engineering process (a greater use of thorium, a metal promoted by some in science as cleaner and much more powerful). But already it seems clear that uranium as a feasible alternative to coal, gas and hydro power remains miles ahead of its wind, wave and solar rivals.

Moreover, this conclusion will be bolstered if more leading voices in the environmental movement respond to the Japanese tragedy in the same way as George Monbiot of London's Guardian newspaper.

Just as Adelaide-based geologist and climate sceptic Ian Plimer is public enemy No. 1 of environmentalists, Monbiot is the self-styled conscience of global environmentalism.

Yet, after watching the Japanese reactors survive an earthquake, this is what Monbiot is now saying: ''Yes I loathe the liars who run the nuclear industry … but there are no ideal solutions. The crisis at Fukushima has converted me to nuclear power.''

The inconvenient truth here is that Japan's nuclear power stations have not so far devastated the nuclear energy sector nor the uranium mining sector that provides its raw material … and the chances they will are receding by the day.