Driving uranium in future energy mix

That lack of price sensitivity should underpin investment in uranium mining in Australia to satisfy future global energy needs, according to uranium explorer and developer, Toro Energy Limited.
Addressing a Chinese investment forum in Adelaide, Toro Energy’s managing director, Greg Hall, said price and security of supply would be the main driver of the future energy mix.
“If you double the cost of the basic fuel material used in various power generation techniques, nuclear power is the least price sensitive - and therefore delivers the best potential to absorb price increases while maintaining electricity prices, allowing solid returns on investment in long-term viable power,” Hall said.
“Doubling the price of uranium used in power generation will only lead to a four per cent increase in the price of electricity generated from that nuclear power source.
“The cost escalation rises to 40 per cent, however, if the coal price doubles, and rises above 70 per cent if the gas price is doubled.
“It is a scenario which is difficult to argue against in terms of the world’s capacity to meet sustainable long-term, affordable and ideally greener baseload energy expectations.”
Hall also warned that new uranium mine supply must continue to expand aggressively by around 32 per cent to meet nuclear energy demand projections in just the next six years.
“In 2006, all global sources of uranium produced 73,300 tonnes of U3O8, yet the demand curve suggests a need for 150,000 tonnes of U3O8 by as early as 2015 but we will struggle with an output capacity by then of only 100,.300 tonnes,” Hall said.
“Invigorated new Australian uranium production can help bridge that demand-supply gap.”
Hall told delegates Toro expected to this quarter complete its current optimisation study on the Company’s 24.4 million pound U3O8 resource at Wiluna in WA.
A scoping study is currently underway on Toro’s 7.4 million pound U3O8 resource at Napperby, northwest of Alice Springs and should also be completed this quarter.
“The recent resource upgrade at Wiluna is expected to substantially improve the economics of the project, which is being evaluated as part of the optimisation study,” Hall said.
Toro Energy has set a target date of first production at Wiluna in 2012-2013, moving to steady production in 2014.
In other uranium news, the Association of Mining and Exploration Companies (AMEC) has congratulated Federal Environment Minister Peter Garrett for approving the Four Mile uranium mine in South Australia.
AMEC chief executive Simon Bennison said the decision is very good news for Australia and will help in the global effort to reduce carbon emissions.
“The Minister’s decision signals a very welcome move toward rational policy with regard to uranium,” Bennison said.
“It is very pleasing to see the Government making decisions based on science and fact rather than emotion and rhetoric.
“The fact is that uranium mining poses a relatively small risk to the Australian community and will provide fuel for low-carbon power generation in many developing countries around the world,” said Bennison.