6 March 2009 - ABARE 'bullish' on future uranium exports

The Australian Bureau of Agriculture and Resource Economics (ABARE)’s latest official assessment of the positive outlook for growth in Australian uranium exports confirms there is a permanent shift towards nuclear power is underway in the world’s energy portfolio, the Australian Uranium Association said today.

ABARE’s March Quarter Commodities report forecasts a 38 per cent increase in uranium export volumes by 2014, and an 86 per cent increase in export revenues during the same period, reflecting higher long-term contract prices.

ABARE’s assessment of the short-medium term outlook for Australia’s uranium exports confirms the trade will grow considerably in response to continuing and increasing demand for nuclear energy as a reliable, climate-friendly electricity source.

ABARE points to the plans of countries like China, Japan, India and Russia and says that during the next six years, 64 nuclear power reactors are expected to be commissioned.

“Driving this growth are concerns about energy security, environmental considerations and rapid growth in electricity demand in developing economies”.

The Executive Director of the Australian Uranium Association (AUA), Mr Michael Angwin, said the ABARE forecasts were further confirmation of the long-term growth prospects of the Australian uranium industry.“

ABARE acknowledges the long-term structural adjustment towards nuclear power in the world’s energy portfolio will continue to drive demand for uranium from Australia and other producer countries.

“Australia must continue to develop new uranium mines if we are to achieve the greatly increased production and export volumes forecast by ABARE,” he said.

“It is essential that the new opportunities for uranium production in Western Australia are able to be developed as quickly as possible, consistent with a best-practice regulatory framework.

“And other States that continue to ban uranium mining should re-visit their prohibition policies to ensure Australia can fully respond to the increasing world demand for our uranium,” Mr Angwin said.

ABARE says that in 2014, Australia will export 13,990 tonnes of uranium oxide, compared with 10,139 tonnes shipped overseas in 2008.

The value of exports during the same period will increase more than the volume, ABARE says, on the expectation that new supply contracts with overseas customers will reflect substantial increases in contract prices.

“Reflecting increased uranium production, the value of Australian export earnings is forecast to increase by 6 per cent to around $A940 million in 2008-09 and by a further 31 per cent to $A1.2 billion in 2009-10 in line with assumed increases in some contract prices,” ABARE says.

It predicts the real value of Australia’s uranium exports in 2014 will be $A1.68 billion, compared with $A904 million in the past year. This represents an 86 per cent increase.

“Australian contract prices are expected to continue to increase as existing contracts, which were negotiated during a period of low uranium prices, are negotiated upward,” ABARE says.

It forecasts the price that Australian uranium exporters will achieve in 2014 will be $A120.10 per kilogram, compared with $A89.20 in 2008.

ABARE has forecast an immediate five per cent increase in Australian uranium production to 10,538 tonnes in 2008-09.

Mr Angwin said ABARE’s robust forecasts justified a high level of confidence in the continued growth and development of the uranium industry in Australia.