Deloitte Report on Economic Outlook

With nearly 40 per cent  of the world’s low-cost uranium resources, Australia has a comparative advantage in its uranium endowment.

In the global energy market, concerns about energy security and climate change, combined with economic and population growth are re-shaping patterns of demand for energy sources, driving the revival of nuclear power around the world.  

Australia’s uranium export industry takes on a significance larger than its export value in the face of those changing patterns of demand. That is because those exports and the global nuclear power industry they supply are capable of providing a continuous supply of electricity with very low greenhouse gas emissions, about the same as wind power, over their respective lifecycles.

The Australian Uranium Association wanted to measure that significance and commissioned Deloitte Insight Economics to study the economic outlook for the Australian uranium industry to 2030.

The research looks at two scenarios for global climate action reflecting the alternative climate stabilisation pathways assumed by the Intergovernmental Panel on Climate Change (one moderate, one aggressive): that is, limiting average global temperature rises to three and two degrees Celsius respectively by stabilisation of greenhouse gases at 550 parts per million and 450 ppm.

The research also looked at two domestic uranium policy cases: one where uranium mining continued in South Australia and the Northern Territory; and a second where mining expanded into Western Australia and Queensland. (In late 2008, the newly-elected Barnett Government in Western Australia announced it would permit uranium mining in WA and would establish an appropriate regulatory framework to assess proposed mines.)

As well as modelling the economic impact, the Deloitte research measured the contribution to greenhouse gas abatement of the expansion of Australia’s uranium industry.

The modelling shows that the expansion of Australia’s uranium mining would have a strongly beneficial impact on the Australian economy. In net present value (NPV) terms to 2030, against a base case, the modelling shows:

  •  In the moderate Climate Action scenario, Australia’s GDP would be $14.2 billion to $17.4 billion higher and Consumption $12.3 billion to $15.3 billion higher, depending on the number of States in which mining took place.
  • In the Climate Crisis scenario, with the world’s governments more aggressively reining in emissions, Australia’s GDP would be $26.8 billion to $32.3 billion higher and Consumption $23.6 billion to $28.5 billion higher, again depending on State government policies.

The substantial economic benefits included benefits for South Australia and the Northern Territory; and also for Western Australia and Queensland, were the mining of uranium to expand into those States.

Another benefit of the industry’s development for Australia as a whole lies in the potential impact on global greenhouse gas emissions.

Under the more moderate outlook, Australia would export in total approximately 350,000 tonnes more uranium oxide from 2008 to 2030 than in the base case. This would fuel upwards of 150 one-thousand megawatt nuclear reactors and produce more than 12,000 TWh of electricity. To produce an equivalent amount of power from coal using existing technology would otherwise produce about 11,400 million additional tonnes of carbon dioxide.

If uranium mining extended to Western Australia and Queensland, Australia would export about 460,000 tonnes of uranium oxide from 2008-2030 above base case levels, fuelling more than 15,000 TWh of nuclear-generated power and avoiding about 15,000 million tonnes of coal-fired CO2.

The abatement potential of an expanded Australian uranium industry would be even more significant in the more aggressive Climate Crisis scenario.

The study confirms that Australian uranium exports and the nuclear reactors they fuel – alongside renewables and coal using clean technology – will play an increasingly significant role as part of Australia’s response to the global climate challenge.