Queensland Holds Positive Uranium Outlook, Promotes Development

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Researched by Industrial Info Resources Australia (Perth, Australia)--Earlier this month, the Queensland state government lifted a 32-year ban on uranium mining, enabling opportunities that could bring jobs and prosperity not only to the state, but to the country. In lifting the ban, the Queensland government released a comprehensive action plan that will aim to recommence uranium mining throughout the state. But one part of the announcement came as a shock to many: The low price of uranium, as a result of oversupply in the market, is believed to have caused existing Australian uranium mines to lose money, particularly the newly operational Four Mile site in South Australia.

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After Kazakhstan and Canada, Australia is the third-largest uranium producer in the world. Australia generated AU$823 million (US$772 million) in uranium exports in 2012-13, with the bulk coming from the Ranger mine in the Northern Territory. Ensuring strict regulatory exporting safeguards, much of Australia's uranium is exported to North America, Europe and Asia--particularly the U.S. and China. Australia also exported uranium to Japan before the Fukushima disaster of 2011.

Since the nuclear accident, Japan ceased all imports of uranium and shut down the country's nuclear power plants. Many believed that the country would never return to nuclear power. Former Prime Minister Julia Gillard even overturned a ban that prevented the sale of uranium to India in order to give Australia's uranium producers a chance to survive in the poor market conditions.

However, following Japan's decision to restart its nuclear plants, investors recently have been betting on uranium stocks. Other countries are beginning to restart operations and even construct new plants.

China also will be a partner that Australia can rely on for uranium exports. China plans to quadruple the amount of electricity generated from nuclear power as part of its new environmental plan toward clean energy and the elimination of air pollution. The opportunities that China presents for the Australian uranium producers may come as a surprise to many. China consumed 9 million pounds of uranium in 2013, but produced only 3.3 million pounds. The gap is expected to increase, with China eventually surpassing the U.S. as the No. 1 consumer, with a requirement of more than 50 million pounds per year.

The Queensland state government's ban on uranium and associated action plan should be viewed as a positive addition for Australia's minerals industry. Although uranium prices remain low for the foreseeable future, the addition of more than 90 nuclear reactors under construction suggests that there is room for primary production to grow, particularly as global demand is expected to rise to more than 240 million pounds of uranium by 2024.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.