Yellowcake Fever. Exposing the Uranium Industry’s Economic Myths Report in full at: http://www.acfonline.org.au/sites/default/files/resources/ACF_uranium_economics_Yellowcake_Fever.pdf by Dr Jim Green (FoEA) & Dave Sweeney (ACF), Australian Conservation Foundation, April 2013 (33 page PDF) Executive Summary: The Australian uranium industry involves serious and unresolved domestic and international security, environmental and inter-generational concerns and remains a contested and controversial sector that lacks a secure social license. This report examines the sectors small economic and employment contribution in relation to its significant risks and legacies and seeks to build the case for an independent cost-benefit analysis and a comprehensive and transparent assessment of the impacts and implications of Australia’s uranium trade.
Uranium is a small contributor to Australian export revenue and employment. From 2002 to 2011, uranium sales averaged $627 million annually and accounted for only 0.29% of all national export revenue. In the 2011/12 financial year, uranium revenue of $607 million was 4.4 times lower than Australia’s 20th biggest export earner, 8.7 times lower than Australia’s 10th biggest export earner and 103 times lower than the biggest earner, iron ore. Small industrial sectors can play an important economic role but the unique properties and risks of uranium mining relative to any benefits means its role requires particular scrutiny.
The industry’s contribution to employment is also underwhelming. The World Nuclear Association estimates 1,760 jobs in Australia’s uranium industry. That is the highest of all estimates yet it represents just 0.015% of all jobs in Australia. The industry’s primary promotional body, the Australian Uranium Association (AUA), claims its members are “significant employers of First Australians”
however the sector only provides around one job for every three thousand Indigenous Australians.
In the mid-2000s, there was a speculative uranium price bubble. Since this bubble burst the uranium industry has been battered by a falling commodity price, rising production costs, the Global Financial Crisis (and associated credit crisis), the failure of the global nuclear power ‘renaissance’ to materialise, the failure to develop new mines and serious production shortfalls…….
There is little for Australia’s uranium companies to cheer about in other export markets for Australian uranium:
• Plans to expand nuclear power (or at least to maintain current capacity with new build) are in trouble in the UK, the USA and Canada.
• Germany and Belgium plan to abandon nuclear power.
• The restart of reactors in Japan promises to be a protracted, contentious affair and preFukushima plans to expand nuclear to 50% of
total electricity supply are now firmly in the past.
• South Korea’s nuclear industry has been hit by a series of scandals including bribery, corruption and cover-ups, and the proportion of South Koreans who consider nuclear power safe fell from 71% in 2010 to 35% in 2012.
• France plans to reduce its reliance on nuclear power.
• Taiwan, Finland, and Spain have fewer than 10 reactors each and will remain, at most, small markets.
• Sweden has 10 reactors, with no scope for growth under existing government policy.
A decade into the nuclear ‘renaissance’ and global nuclear capacity has not increased. There may be modest growth, but utilities will have to build several hundred reactors in the coming decades just to replace the current cohort of mostly middle-aged reactors. The huge capital cost of reactors is proving to be the industry’s Achilles heel. An Exelon executive recently warned that new reactors “won’t become economically viable for the foreseeable future” in the US, while General Electric’s CEO said “it’s just hard to justify nuclear, really hard”.
Most growth is anticipated in economically and/or politically illiberal countries. The Wall Street Journal noted in February 2013 that “new nuclear works best in countries where consumers and financiers are shielded from its full costs – hardly the best basis for the industry’s ever-elusive renaissance”.
Industry enthusiasm is no substitute for analysis and evidence and a transparent review of the sustained dissonance between the performance and promise of the uranium sector is long overdue.