Uranium ore is heap leached with sulphuric acid at Areva's Somair mine in Arlit, September 25, 2013. Picture taken September25, 2013. Reuters/Joe Penney

Australia’s golden days in mining are not yet over. In fact, the country is on the cusp of another boom, backed by uranium exports, says a new study commissioned by the Minerals Council of Australia.

According to the study, there is a high-growth scenario ahead for the local uranium production sector in feeding the rising demand from nuclear powers across the world. In uranium supplies, Australia is the third-largest supplier behind Kazakhstan and Canada.

The report, “Realising Australia’s Uranium Potential,” traced three priority reforms that Australia needs to pursue for increasing its uranium production:

  • Removing exploration and mining bans in states where the bans exist
  • Excluding the federal government from the current dual state/federal environmental assessment processes
  • Increasing the number of ports through which uranium can be exported.

The report said the economic gains from a carbon-constrained world would see the Australian uranium mining industry surge ahead with a tenfold capacity hike to touch $9.5 billion by 2040, reports Mining.com. This means Australian uranium will fuel as much as 5 percent of the world's electricity generation in the years to come.

The research was conducted by economists Sinclair Davidson and Ashton de Silva, who assert that Australia can create enormous wealth, jobs and export revenue if the government creates the right policies to seize the opportunities coming from climate-induced energy constraints.

The council’s executive director for uranium, Daniel Zavattiero, concurred with the findings of the report that Australia holds enormous opportunity in creating jobs and high export revenue with a good policy mix.

“Such opportunities will only be realisable if Australia undergoes policy reforms making it a more attractive uranium investment destination, and a more competitive supplier,” he said in a statement.

Growth drivers

The report underscored that the growth of Australia’s uranium industry invariably hinges on two variables – global growth in nuclear power generation and increase in the share of Australia’s own uranium production.

“With vision, policy reform, and state and federal commitments to increase competitiveness and investment attractiveness, Australia could target a share of global production closer to its resource endowment,” the report said.

Despite possessing one third of the world’s uranium resources, Australia processes just 10 percent of global production, the report noted.

Uranium prices up

The timing of the study is significant as uranium prices are firming up, leaving the lull of post-Fukushima lows and trading at around $37.75 a pound.

Curbs on coal based power triggered by climate change policies will continue to make nuclear power a larger contributor to the world’s power generation. The report’s main model was based on scenarios developed by the International Energy Agency, reported Mining News.

Among the existing uranium projects in Australia, most notable are Toro Energy’s Wiluna project and Cameco’s Kintyre project. However, both companies are awaiting a big momentum in prices to push their developments further. The current uranium price is hovering around $38 per pound.

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