12 March 2009 - Uranium Exploration Declines

A combination of economic and commercial/operational factors have led to a decline in uranium exploration expenditure in the December 2008 quarter, the Australian Uranium Association said today.

The latest exploration spending figures from the Australian Bureau of Statistics show that uranium exploration spending in the December quarter 2008-09 was $51.9 million, down from $56.7 million in the preceding September quarter and down $17.7 million compared with the previous corresponding period.

The Executive Director of the Australian Uranium Association, Mr Michael Angwin, said the latest results represented the first decline in spending on uranium exploration for at least five years.

In previous quarters, high levels of exploration activity associated with Australia’s two biggest operating uranium mines helped drive exploration expenditure to record levels.Those drilling programs have now either ceased, in the case of Olympic Dam in South Australia, or are being wound up, in the case of the Ranger mine in the Northern Territory, Mr Angwin said.

“We can expect that these reductions in activity, coupled with the anticipated contractionary effects of the global financial crisis, will see the decline in exploration spending continue for some time,” he said.

In the December quarter, spending on exploration in South Australia was $17.8 million, compared with $37.3 million in the same quarter in 2007-08.

In the Northern Territory in the three months to the end of December 2008, exploration spending increased 30 per cent to $19.4 million compared with the December quarter 2007-08.

Mr Angwin said a significant proportion of the NT exploration activity was connected with proving up the Ranger ‘3 Deeps’ resource. That program was largely complete and the March quarter results for the NT would likely show reduced activity.

While strong exploration activity is preferable, these figures were not discouraging. “Adjusting for the Olympic Dam and Ranger drilling programs, these figures still show robust levels of exploration activity. Spending in the first half of this financial year is comparable with spending levels in the first half last year.

“The long-term fundamentals of the uranium industry are extremely sound,” Mr Angwin said.“World uranium demand is growing steadily and continues to outpace supply. The best evidence available suggests a profound shift towards low-carbon nuclear energy is underway around the world, and Australia’s uranium industry is well placed to seize the opportunity this presents,” Mr Angwin said.

The Australian Bureau of Agriculture and Resource Economics (ABARE) recently forecast short and medium term increases in the volume and value of uranium exports, forecasting shipment of 14,000 tonnes in 2014 at a real value of nearly $A1.7 billion.

 

Uranium Exploration: Australia 2003/04 to 2008/09 ($millions)

QLD

WA

NT

SA

AUSTRALIA

03/04

0.2

0.2

4.8

5.3

10.5

04/05

0.4

0.3

6.9

13.1 (est)

20.7

05/06

4.6

2.2

19.1

30.3

56.1

06/07

9.0 (est)

11.2 (est)

30.1

63.8

114.1

07/08

38.1

26.8 (est)

48.7

118

231.5

08/09 (Sep and Dec quarters)

18.8

13.1 (est)

36.5

40.2

108.6

ABS 8412.0