SUBHEAD: Nuclear power is charming the developing world as the West and Japan recoils from Fukushima.
By Rupert Neate on 27 October 2012 for the Guardian -
(http://www.guardian.co.uk/business/2012/oct/28/nuclear-power-developing-world-west-recoils-fukushima)
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Image above: The BHP Billiton's giant Olympic Dam uranium mine project in South Australiais on hold because demand has temporarily 'collapsed'. From (http://www.theaustralian.com.au/news/features/slaking-a-giants-thirst/story-e6frg6z6-1226196045851).
As the mood in Japan, Germany, Italy and even France hardens, China is restarting its huge reactor program and India is looking to atomic power to shore up its creaking grid.
A nuclear fuel pellet the size of your little finger provides more energy than 800 kilograms of coal or 650 litres of oil – and all without belching any carbon dioxide or other fumes into the atmosphere.
But the intense power of uranium, the raw material of nuclear fuel, was demonstrated to the world by the Fukushima disaster last year. Its price on global markets has collapsed, from a record $136 a pound in 2007 to just $44 last week – a slump so severe that some of the world's biggest miners have decided they're better off leaving the mineral in the ground.
The market suffered further blows in the last month or so as several developed-world governments announced or confirmed plans to move away from atomic power for good.
But even as the west retreats, the nuclear industry may be about to rise again – in the developing world. In the last few days, China announced plans to restart its massive £170bn reactor building programme, intended to create generating capacity so large that it could power the whole of Spain.
Last March, Japan went into lockdown and shut all of its nuclear plants, which had provided 30% of the nation's electricity. Fears of a nuclear apocalypse rippled across the globe, turning the lights out at reactors around the world, and many of them still lie idle 18 months later.
Japan, which is now running a series of expensive and polluting diesel generators at 100% capacity to replace its nuclear fleet, has announced plans to completely end its reliance on nuclear power by 2040, at an estimated cost of $620bn. Germany and Belgium are also giving up on nuclear power, while Italy has cancelled a long-planned move back to it, and even France – the most pro-nuclear country in the world – is scaling things down.
The future of the UK's nuclear ambitions also hangs in the balance after Vincent de Rivaz, the chief executive of EDF Energy, the French company charged with building new reactors in the UK, told parliament the company had yet to make up its mind whether it was worth building plants without support from the government. Two German companies – RWE and E.ON – have already pulled out of the Horizon joint venture to build new nuclear plants in the UK.
"It is the same as after Chernobyl. There are huge question marks hanging over whether we should have [nuclear power] – a lot of countries are umm-ing and err-ing," says Heenal Patel, a senior industrial analyst at Bloomberg Industries.
Patel says President François Hollande's decision to close France's oldest nuclear plant last month, and his commitment to lowering the country's dependence on nuclear power from 75% to 50% of total electricity demand, has caused the biggest waves in the industry: "If the world's most pro-nuclear country is blowing cold it is noticed by other countries."
Uranium miners have noticed the cool wind too. This summer, BHP Billiton, the giant Anglo-Australian mining group, shelved plans for the world's largest open-pit copper and uran, and announced it has no plans to build or acquire other uranium minesium mine in south Australia.
The £12bn Olympic Dam mega-project would have transformed the mine 350 miles north of Adelaide into a massive pit capable of producing 19,000 tonnes of uranium a year. Explaining the decision to stall the project, Marius Kloppers, BHP's chief executive, said demand for uranium had "collapsed". BHP has also sold off its Yeelirrie uranium field in Western Australia.
Canada's Cameco, the world's third-largest uranium miner, has said it is only worth pressing ahead with its Kintyre uranium project in Australia's Great Sandy Desert if the uranium price climbs back above $67 a pound.
Patel said that if the uranium price keeps falling, "manufacturers are going to look to keep it in the ground … That's the great thing about being a mining company: you can decide whether to produce or not. The uranium isn't going anywhere."
Paladin Energy, which mines uranium in Malawi and Namibia (the largest sources of uranium oxide, or "yellowcake", after Kazakhstan, Canada and Australia), has warned that if the price stays depressed, supply will dip by 25% by 2020.
Chief executive John Borshoff says his analysis "confirms a supply industry in crisis, in which production is unable to meet emerging requirements in the short to medium term".
Another, more unusual, source of uranium could also run dry soon. At present, about 16% of the world's uranium (and half of supplies used in American reactors) come from Soviet nuclear weapons.
The "megatons to megawatts" programme, which formed part of the 1993 US-Russia non-proliferation treaty, has seen highly enriched uranium from the equivalent of 18,000 Russian warheads converted to lower-grade fuel for use at power plants in the US cities at which they were once aimed. But the programme is due to come to an end next year.
Despite the current collapse in demand, analysts say the uranium price will recover in the long term. The rapacious growth of China and India will be dependent on nuclear fuel, and the oil-rich Gulf nations are planning big forays into nuclear so that they can extend the lifetime of their highly profitable oil exports.
There are 65 reactors being built around the world, and 69% of them are in the fast-growing Bric countries (Brazil, Russia, India and China). Beijing's ambitious programme will increase nuclear from 2% to 5% of the country's electricity supply by 2020, and make China the world's biggest market for new nuclear equipment.
India – which lacks fossil fuel resources and has been growing so fast that its electricity supply is falling 12% short at peak hours, causing frequent blackouts – is also planning a massive expansion programme. The country hopes nuclear will account for 50% of its electricity needs by 2050, up from just 3.7% last year.
To raise nuclear output, India has had to convince uranium producers to provide supplies, despite long-held concerns over India's nuclear weapons programme. Four years ago, the 46-nation Nuclear Suppliers Group exempted India from a 30-year ban on exports to countries that have failed to sign the nuclear non-proliferation treaty after receiving assurances that no nuclear imports would find their way to the military.
This month Manmohan Singh, India's prime minister, held talks with his Australian counterpart Julia Gillard, with the aim of reversing Australia's decision to maintain its own ban on exports to India. Lifting the ban will boost Australia's miners, which produced 7,529 tonnes of uranium worth A$782m (£500m) last year, but could cause problems at home: nuclear power is a sensitive topic in a country that has decide not to build any nuclear plants despite having the world's largest uranium reserves.
Patel reckons Japan will be forced to follow China and India and re-embrace nuclear despite the memories of Fukushima. "Like India, they don't have a huge amount of natural resources, and that's why Japan was so into nuclear … They have had to import a whole lot more oil and gas, which is expensive and not great for energy security."
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By Rupert Neate on 27 October 2012 for the Guardian -
(http://www.guardian.co.uk/business/2012/oct/28/nuclear-power-developing-world-west-recoils-fukushima)
Image above: The BHP Billiton's giant Olympic Dam uranium mine project in South Australiais on hold because demand has temporarily 'collapsed'. From (http://www.theaustralian.com.au/news/features/slaking-a-giants-thirst/story-e6frg6z6-1226196045851).
As the mood in Japan, Germany, Italy and even France hardens, China is restarting its huge reactor program and India is looking to atomic power to shore up its creaking grid.
A nuclear fuel pellet the size of your little finger provides more energy than 800 kilograms of coal or 650 litres of oil – and all without belching any carbon dioxide or other fumes into the atmosphere.
But the intense power of uranium, the raw material of nuclear fuel, was demonstrated to the world by the Fukushima disaster last year. Its price on global markets has collapsed, from a record $136 a pound in 2007 to just $44 last week – a slump so severe that some of the world's biggest miners have decided they're better off leaving the mineral in the ground.
The market suffered further blows in the last month or so as several developed-world governments announced or confirmed plans to move away from atomic power for good.
But even as the west retreats, the nuclear industry may be about to rise again – in the developing world. In the last few days, China announced plans to restart its massive £170bn reactor building programme, intended to create generating capacity so large that it could power the whole of Spain.
Last March, Japan went into lockdown and shut all of its nuclear plants, which had provided 30% of the nation's electricity. Fears of a nuclear apocalypse rippled across the globe, turning the lights out at reactors around the world, and many of them still lie idle 18 months later.
Japan, which is now running a series of expensive and polluting diesel generators at 100% capacity to replace its nuclear fleet, has announced plans to completely end its reliance on nuclear power by 2040, at an estimated cost of $620bn. Germany and Belgium are also giving up on nuclear power, while Italy has cancelled a long-planned move back to it, and even France – the most pro-nuclear country in the world – is scaling things down.
The future of the UK's nuclear ambitions also hangs in the balance after Vincent de Rivaz, the chief executive of EDF Energy, the French company charged with building new reactors in the UK, told parliament the company had yet to make up its mind whether it was worth building plants without support from the government. Two German companies – RWE and E.ON – have already pulled out of the Horizon joint venture to build new nuclear plants in the UK.
"It is the same as after Chernobyl. There are huge question marks hanging over whether we should have [nuclear power] – a lot of countries are umm-ing and err-ing," says Heenal Patel, a senior industrial analyst at Bloomberg Industries.
Patel says President François Hollande's decision to close France's oldest nuclear plant last month, and his commitment to lowering the country's dependence on nuclear power from 75% to 50% of total electricity demand, has caused the biggest waves in the industry: "If the world's most pro-nuclear country is blowing cold it is noticed by other countries."
Uranium miners have noticed the cool wind too. This summer, BHP Billiton, the giant Anglo-Australian mining group, shelved plans for the world's largest open-pit copper and uran, and announced it has no plans to build or acquire other uranium minesium mine in south Australia.
The £12bn Olympic Dam mega-project would have transformed the mine 350 miles north of Adelaide into a massive pit capable of producing 19,000 tonnes of uranium a year. Explaining the decision to stall the project, Marius Kloppers, BHP's chief executive, said demand for uranium had "collapsed". BHP has also sold off its Yeelirrie uranium field in Western Australia.
Canada's Cameco, the world's third-largest uranium miner, has said it is only worth pressing ahead with its Kintyre uranium project in Australia's Great Sandy Desert if the uranium price climbs back above $67 a pound.
Patel said that if the uranium price keeps falling, "manufacturers are going to look to keep it in the ground … That's the great thing about being a mining company: you can decide whether to produce or not. The uranium isn't going anywhere."
Paladin Energy, which mines uranium in Malawi and Namibia (the largest sources of uranium oxide, or "yellowcake", after Kazakhstan, Canada and Australia), has warned that if the price stays depressed, supply will dip by 25% by 2020.
Chief executive John Borshoff says his analysis "confirms a supply industry in crisis, in which production is unable to meet emerging requirements in the short to medium term".
Another, more unusual, source of uranium could also run dry soon. At present, about 16% of the world's uranium (and half of supplies used in American reactors) come from Soviet nuclear weapons.
The "megatons to megawatts" programme, which formed part of the 1993 US-Russia non-proliferation treaty, has seen highly enriched uranium from the equivalent of 18,000 Russian warheads converted to lower-grade fuel for use at power plants in the US cities at which they were once aimed. But the programme is due to come to an end next year.
Despite the current collapse in demand, analysts say the uranium price will recover in the long term. The rapacious growth of China and India will be dependent on nuclear fuel, and the oil-rich Gulf nations are planning big forays into nuclear so that they can extend the lifetime of their highly profitable oil exports.
There are 65 reactors being built around the world, and 69% of them are in the fast-growing Bric countries (Brazil, Russia, India and China). Beijing's ambitious programme will increase nuclear from 2% to 5% of the country's electricity supply by 2020, and make China the world's biggest market for new nuclear equipment.
India – which lacks fossil fuel resources and has been growing so fast that its electricity supply is falling 12% short at peak hours, causing frequent blackouts – is also planning a massive expansion programme. The country hopes nuclear will account for 50% of its electricity needs by 2050, up from just 3.7% last year.
To raise nuclear output, India has had to convince uranium producers to provide supplies, despite long-held concerns over India's nuclear weapons programme. Four years ago, the 46-nation Nuclear Suppliers Group exempted India from a 30-year ban on exports to countries that have failed to sign the nuclear non-proliferation treaty after receiving assurances that no nuclear imports would find their way to the military.
This month Manmohan Singh, India's prime minister, held talks with his Australian counterpart Julia Gillard, with the aim of reversing Australia's decision to maintain its own ban on exports to India. Lifting the ban will boost Australia's miners, which produced 7,529 tonnes of uranium worth A$782m (£500m) last year, but could cause problems at home: nuclear power is a sensitive topic in a country that has decide not to build any nuclear plants despite having the world's largest uranium reserves.
Patel reckons Japan will be forced to follow China and India and re-embrace nuclear despite the memories of Fukushima. "Like India, they don't have a huge amount of natural resources, and that's why Japan was so into nuclear … They have had to import a whole lot more oil and gas, which is expensive and not great for energy security."
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