Indicative of the uranium industry's worldwide malaise, mining giant Cameco recently announced the suspension of production at Rabbit Lake and reduced production at McArthur River/Key Lake in Canada. Cameco is also curtailing production at its two U.S. uranium mines. About 500 jobs will be lost at Rabbit Lake and 85 at the U.S. mines. A Cameco statement said that "with today's oversupplied market and uncertainty as to how long these market conditions will persist, we need to focus our resources on our lowest cost assets and maintain a strong balance sheet".
Christopher Ecclestone, mining strategist at Hallgarten & Company, offered
this glum
assessment of the uranium market: "The long-held theory during the
prolonged mining sector slump was that Uranium as an energy metal could
potentially break away irrespective of the rest of the metals space. How true
they were, but not in the way they intended, for just as the mining space has broken
out of its swoon the Uranium price has not only been left behind but has gone
into reverse. This is truly dismaying for the trigger for a uranium rebound was
supposed to be the Japanese nuclear restart and yet it has had zero effect and
indeed maybe has somehow (though the logic escapes us) resulted in a lower
price."
Ecclestone adds that uranium has "made fools and liars of many in recent years,
including ourselves" and that "uranium bulls know how Moses felt when
he was destined to wander forty years in the desert and never get to see the
Promised Land." He states that uranium exploration "is for the
birds" because "the market won't fund it and investors won't give credit
for whatever you find".
The Minerals Council of Australia launched a pro-uranium social media campaign
last month. The twitter hashtag #untappedpotential was soon trending but - as
an AAP
piece noted - contributors were
overwhelmingly critical. No doubt the Minerals Council anticipated the negative
publicity but what it didn't anticipate is the uranium price falling to an
11-year low. Mining.com noted in an April 20 article that the current low price hasn't been seen since May 2005. The current price,
under US26/lb, is well under half the price just before the 2011 Fukushima
disaster, and under one-fifth of the 2007 peak of a bubble.
Mining.com quotes a Haywood Securities research note which points out that the
spot uranium price "saw three years of back-to-back double-digit
percentage losses from 2011-13, but none worse than what we've seen thus far in
2016, and at no point since Fukushima, did the average weekly spot price dip
below $28 a pound." Haywood Securities notes that an over-supplied market
continues to inflate global inventories.
Mining.com notes that five years after the Fukushima disaster, only two of
Japan's nuclear reactors are back online (and yet another permanent reactor
closure was announced on May 15), and that in other developed markets nuclear
power is also in retreat. The last reactor start-up in the U.S. was 20 years
ago. The French Parliament legislated last year to reduce the country's
reliance on nuclear power by one-third. Germany is phasing out nuclear power,
as are several other countries. The European Commission recently released a report
predicting that the EU's nuclear power retreat ‒down 14% over the past decade
‒will continue.
China is a growth market but has amassed a "staggering" stockpile of yellowcake
according to Macquarie Bank. India's nuclear power program is in a "deep
freeze" according to the Hindustan Times (unfortunately the same cannot be
said about its nuclear weapons program), while India's
energy minister Piyush Goyal said
on April 20 that India is not in a "tearing hurry" to expand nuclear
power since there are unresolved questions about cost, safety and liability
waivers sought by foreign companies.
A decision on two planned reactors in the UK could be announced in the near
future and the cost - A$48 billion for the two reactors - goes a long way to
explaining nuclear power's worldwide stagnation. If the project proceeds, the
industry will be hoping it doesn't go three times over budget and lag 5-9 years
behind schedule, as reactor projects in France and Finland have.
Even if all of Japan's 42 reactors are included in the count, the number of
power reactors operating worldwide is the same now as it was a decade ago. And
there is little likelihood that nuclear power will break out of its long
stagnation in the foreseeable future, with the ageing of the global reactor
fleet a growing problem for the industry. As former World Nuclear Association
executive Steve
Kidd noted
earlier this year: "The future is likely to repeat the experience of 2015
when 10 new reactors came into operation worldwide but 8 shut down. So as
things stand, the industry is essentially running to stand still."
Australia's uranium industry is also struggling just to stand still. The industry
accounts for just 0.2 percent of national export revenue and less than 0.01
percent of all jobs in Australia. Those underwhelming figures are likely to
become even less whelming with the end of mining and the winding down of
processing at the Ranger mine in the Northern Territory.
Jim Green is the national antinuclear campaigner for Friends of the Earth Australia.