Demand for uranium is projected to surge and no country is better placed to capitalise than Australia.
Whether or not Australia decides to move to nuclear power generation is irrelevant – new reactors are regularly being announced in other parts of the world, which will continue to drive demand.
As a result, the uranium price has perked up so far in 2024, peaking at more than US$100 per pound in January.
While the spot price has fallen since then, the contract price is steadily rising.
“Ongoing Russian sanctions, Kazatomprom production target cuts and Niger instability all point to a fragile supply chain attempting to deliver the necessary pounds for continued electrification and decarbonisation,” Canaccord Genuity said in recent research.
“Power consumption from data centres, increased artificial intelligence usage and electric vehicles will create new grid challenges and we believe recent deals such as Amazon Web Serves with nuclear utility Talen could just be the beginning.”
Nuclear power currently accounts for about 10% of global power generation but is growing.
“The increasing recognition of nuclear energy’s positive contributions to decarbonisation, energy security and the provision of economically dispatchable electricity is anticipated to drive substantial demand growth,” Canaccord said.
The firm is forecasting 3.6% per annum uranium demand growth out to 2030 and 3.2% from 2030-35.
Speaking on a recent webinar, Canaccord analyst James Bullen pointed out that just two companies provided more than 60% of the world’s uranium, Cameco and Kazatomprom. “That’s next level supply concentration,” he said.
Canaccord believes higher incentive pricing will be required to incentivise new greenfield developments in jurisdictions favourable to Western interests and says restarts and brownfields expansions would not be enough to meet future demand.
Bullen noted how difficult it was to bring on greenfields uranium supply.
“There’s no ticker-tape parades when you go out with new uranium supply,” he said. “This is not lithium – it’s not a supply chain that reacts quickly.”
Uranium in Australia
Australia holds the largest resources of uranium in the world but was only the fourthlargest producer, as of 2022.
Despite being home to almost a third of the world’s resources, Australia only has three mines and accounted for 9% of global production in the 2023 financial year.
Australia exported 4809 tonnes of uranium in FY23 for export revenue of A$812 million.
According to the Australian government’s Office of the Chief Economist, uranium was expected to have earned the country more than A$1 billion for the first time in FY24 and is forecast to reach more than A$1.4 billion in FY25 and around A$1.7 billion in FY26.
However, further growth is likely to require changes in state legislation.
Mining of uranium is currently only permitted in South Australia and the Northern Territory.
In WA, Labor banned uranium mining in 2002, which was overturned by Colin Barnett’s Liberal government in 2008.
The ban was reinstated in 2017 when Labor returned to power, though the government has permitted the four projects approved under the Liberal government to proceed.
Cauldron Energy managing director Jonathan Fisher told the WA Mining Club in late July that an Anti Nuclear Alliance of WA petition against uranium mining got just 182 signatures in 2017.
“Uranium mining in WA is strongly supported by the broad majority of the community,” he said.
“We have a world-leading capability in uranium in this state but we could do so, so much more.”
But at Diggers & Dealers in Kalgoorlie last month, WA mines minister David Michael said there was no intention of changing the policy with the government choosing to focus on other critical minerals.
Uranium exploration, but not mining, is permitted in Queensland and New South Wales, while neither is allowed in Victoria.
The producers
All three of Australia’s operating uranium mines are in South Australia, which is likely to remain the case for some time.
BHP’s Olympic Dam operation in SA is the country’s largest copper mine but doubles as the largest uranium mine, producing 3603 tonnes (7.9 million pounds) in the 2024 financial year.
US-owned Heathgate Resources operates the Four Mile in-situ recovery (ISR) operation in SA and is reportedly producing around 4.5Mlb per annum.
ASX-listed Boss Energy recently celebrated the restart of the Honeymoon ISR uranium project in SA.
Honeymoon was operated by Russia’s Uranium One from 2011-2013 before its suspension and sale to Boss.
In July, Boss reported June quarter production of 57,364lb of uranium.
Ramp-up will continue this financial year with production guidance of “at least” 850,000lb set.
The NT’s only operating uranium mine, Ranger, closed in 2021 due to depletion.
Owner, Rio Tinto-backed Energy Resources of Australia, is spending more than A$1 billion to rehabilitate the operation, leaving behind the uneconomic Ranger 3 Deeps resource.
The company was also recently denied an extension to the Jabiluka mineral lease and
in August, launched legal action against the NT government.
The developers
Canadian uranium major Cameco holds two of Australia’s largest undeveloped deposits.
Yeelirrie in Western Australia has a measured and indicated resource of 128.1Mlb of uranium and has received federal environmental approval.
The smaller Kintyre project in the Pilbara hosts an indicated and inferred resource of 59.5Mlb of uranium.
According to Cameco’s website, no further work is planned at either project until market conditions improve.
John Borshoff’s Deep Yellow is focusing on bringing its projects in Namibia into production initially, but the company picked up an Australian portfolio via the 2022 takeover of Vimy Resources.
The Mulga Rock asset in WA’s Goldfields was fully permitted by Vimy and able to proceed to construction but Deep Yellow is completing a revised definitive feasibility study.
Borshoff recently described it as a “fabulous” asset and one the company was aiming to bring into production in 2028.
Alligator Energy is advancing its Samphire insitu recovery (ISR) uranium project in SA.
Samphire, just south of Whyalla, has a resource of 12.4Mt at 640 parts per million uranium oxide for 17.5Mlb of contained uranium, including 74% in the indicated category.
A pilot plant for a field recovery trial has been fabricated and delivered to the company’s yard in Whyalla and construction will begin once Alligator receives approval.
Toro Energy is also planning a pilot plant at its Wiluna uranium project in WA with start-up aimed in the current half.
The company is aiming to have the 62.7Mlb project ready for development when the state’s policy changes.
The explorers
In July, Cauldron launched a 25,000m drilling program at its Yanrey project in WA with the aim of expanding the 38.8Mt at 360ppm resource.
Fisher said it was the largest uranium drilling program in WA since the state’s uranium ban was put in place in 2017.
Paladin Energy, a producer via its Langer Heinrich mine in Namibia, holds 189.9Mlb of resources across the Mount Isa project in Queensland and the Maningyee & Carley Bore project in WA.
“At the right time, all of them will have their day,” Paladin chief operating officer Paul
Hemburrow said at Diggers & Dealers last month.
Similarly, Elevate Uranium holds 48Mlb of resources across multiple projects in Queensland and the NT but is focused on its more advanced portfolio in Namibia.
Toronto-based Laramide Resources describes its Westmoreland project in Queensland as “one of the largest uranium development assets held by a junior mining company”.
Westmoreland has a resource of 27.7Mt at 0.07-0.08% uranium for 51.9Mlb contained and was subject to a preliminary economic assessment into a 3.5Mlbpa operation in 2016.
The company has two rigs on site with the aim of expanding the resource.
While less advanced than its other projects, Deep Yellow also holds the 32.9Mlb Alligator Rivers project in the NT.
In early August, Energy Metals upgraded the resource estimate for its Bigrlyi uranium deposit in the NT for the first time since 2011.
The project, a joint venture between Energy Metals (72.4%), NT Uranium (20.8%), and Noble Investments (6.8%), now has a measured, indicated and inferred resource of 6.32Mt at 1530ppm for 9660t, or 21.3Mlb of uranium oxide.
Energy Metals kicked off a resource extension drilling program in July.
Manhattan Corporation has been more focused on gold recently though its roots are in uranium at the Ponton project in WA.
Ponton has a resource of 26Mt at 300ppm for 17.2Mlb of uranium. Manhattan is planning to seek approval for a new round of drilling.
Rare earths-focused Eclipse Metals is progressing a sale of its NT uranium projects to ASX hopeful Oz Yellow Uranium.
Pre-resource explorers Orpheus Uranium and DevEx Resources are also looking for uranium in Australia.
According to BDO, uranium explorers raised more than other any commodity group in the March 2024 quarter.