URANIUM  INFORMATION  CENTRE  Ltd.	
	A.B.N. 30 005 503 828

53 Queen Street, Melbourne 3000, Australia
post:  	GPO Box 1649N, Melbourne 3001
phone: + 61 3 9629 7744
fax:   	+ 61 3 9629 7207
e-mail: 	uic@mpx.com.au
Web:	http://www.uic.com.au
8 August 2002

Submission to Senate Inquiry on Uranium Mining
This is an industry submission, covering the context in which Australian uranium mining enterprises work, and which provides their rationale for operating.
In relation to the particular terms of reference and the concerns implied there it is submitted that high standards of performance are appropriate for uranium mines, but no more so than for any other industrial enterprises involving people as workers and neighbours, or having a potential effect on Australia's environment.  
It is further submitted that the Committee should take into account the long experience of State (particularly South Australian) authorities, in regulating uranium mining, and consider whether there is a need for any changes to current arrangements involving Commonwealth regulatory authorities.  The current regulatory regime is onerous for the industry, particularly in comparison with industries such as agriculture, forestry, tourism and manufacturing and while it has not prevented incidents, it has achieved its purposes in preventing adverse health and environmental effects.

Introduction
Worldwide, there are some 440 commercial nuclear power reactors with a total installed capacity of 356 000 MWe.  This is over three times the total generating capacity of France or Germany from all sources.  A further 33 power reactors are under construction - equivalent to 7.4% of existing capacity, while 32 more, firmly planned, are equivalent to 9.7%.   Nuclear power provides about 16% of world electricity, and saves about 2400 million tonnes of carbon dioxide emissions each year, relative to coal.
Although fewer nuclear power plants are being built now than during the 1970s and 1980s, those operating are producing more electricity.  In 2001, production was 2544 billion kWh, an increase of 4% (97 billion kWh) over the previous year.  The increase over the last seven years (414 billion kWh) is equal to the output from 60 large new nuclear plants.  Yet between 1995 and 2001 there was a net increase of only two reactors (3.5% in capacity).  The rest of the improvement is due to better performance from existing units.
With increasing concern about emission of greenhouse gases from fossil fuels, it is likely that there will be a substantial increase in the use of nuclear power for electricity generation beyond those countries which now have active programs of building nuclear capacity.  Recent parliamentary approval for a new reactor in Finland on economic and energy security grounds is likely to be followed by government endorsement of new nuclear capacity in UK and USA.  While renewables such as wind power have some potential for carbon-free generation, no credible estimates put this above about 20% of the total generation, and even that requires significant subsidy and back-up.
In addition there is great potential for the use of high-temperature reactors for the thermochemical production of hydrogen as a transport fuel, which would at least double the potential contribution of nuclear power to world clean energy supplies.

Australian uranium today (2001 data) supplies about 22% of the world market for mined uranium, and about 12% of world reactor requirements (the balance apart from mined uranium being from stockpiles and secondary supplies including military stockpiles and missile warheads).  This makes some 350 billion kWh of electricity per year, equivalent to almost twice Australia's requirements.
Uranium comprises almost half of Australia's energy exports, in thermal terms (in 2000-01: 4122 PJ, compared with c5100 coal, c95 LPG and c457 LNG.)

Australian Uranium Production and Exports

	year:	1995	1996	1997	1998	1999	2000	2001	
Production	tonnes U3O8	4377	5866	6473	5799	7055	8937	9104	
Exports	tonnes U3O8	3727	5424	6916	5553	7578	8757	9239	
Export price	A$/kg U3O8	47.27	45.75	41.49	48.57	46.06	48.65	50.09	

Australian economic factors
Compared with Australia’s huge coal exports the scale of uranium exports is modest in financial terms, but this picture could change in coming years.  In addition, the concentration of uranium production in a small number of locations means that the industry makes a significant contribution to the economies of the remote areas in which it operates.  Australian uranium production comes predominantly from two mines, Ranger in the Northern Territory (NT) and Olympic Dam in South Australia (SA).  A new mine, Beverley in SA which is about one fifth of the scale of the existing mines, has recently commenced production and Honeymoon, of similar size, is set to follow it late in 2003.  
The minerals industry accounts for over 30% of the gross state product of the Northern Territory, with uranium accounting for around 10% of this.  Over the period it has operated, the industry in the NT has delivered $167million in royalty payments to the local Aboriginal communities, most of this coming from Ranger.  While the SA economy is substantially larger and more diversified, the local impact of the industry is still marked.  The township of Roxby Downs, which was created to house a community directly and indirectly servicing the mine site at Olympic Dam, has a population of 3,500 people.
Positive short-term outlook
The latest projections by the Australian Bureau of Agricultural and Resource Economics (ABARE) show the volume of Australian exports of uranium growing by 10% in the coming 12 months, after being relatively static in the previous 12 months.  This would see uranium exports exceed 10,000 tonnes U3O8 per annum for the first time.  Prices are predicted to continue the buoyancy of the last 12 months, when they rose by nearly 12%, increasing by almost 10% in the coming 12 months.
Structural change
This short-term trend may well foreshadow longer-term structural improvement in the uranium market.  The substantial stockpiles, which at their peak represented around four times annual consumption, are projected to be substantially depleted by around 2003.  Recycled material is not expected to have a significant depressing impact on the market, and material from weapons stockpiles takes a steady 20% of the market.  Increasing pressure on developed countries to reduce emissions of greenhouse gases is already leading to a re-examination of the potential role of nuclear electricity generation.  The economics of nuclear generation compare favourably with many of the so-called renewable energy sources, all the more so if external costs become internalised via carbon taxes and the like.
Scope to increase Australia’s market share
Canada has about half of the reserves of Australia but its annual production of uranium oxide is substantially higher.  Most of Australia’s reserves have a relatively low projected cost of recovery.  Australia is close to the most rapidly growing markets for uranium, those in East Asia, and is a preferred supplier into those markets.  Japan, already the world’s second largest consumer of uranium, confronts the hardest task amongst the countries that have ratified the Kyoto Protocol in meeting its emissions target, with relatively few opportunities to increase its already very high level of energy efficiency.  Australia has both a well-developed trading relationships with Japan and a partnership agreement that includes coverage of greenhouse issues.

Nuclear Power in relation to Sustainable Development

Resources
The following Table gives some idea of our present understanding of uranium resources.  It can be seen that Australia and Canada have more than 40% of the world's low-cost uranium.

World Uranium Resources (known and recoverable)
	tonnes U	% of world
Australia	863,000	28%
Kazakhstan	474,000	15%
Canada	433,000	14%
South Africa	300,000	10%
Namibia	240,000	8%
Brazil	197,000	6%
Russian Fed.	133,000	4%
USA	106,000	3%
Uzbekistan	106,000	3%

World total	3,111,000

Reasonably Assured Resources plus Estimated Additional Resources - category 1, to US$ 80/kg U, 1/1/01, from OECD NEA & IAEA, in Australia's uranium, McKay & Miezitis, AGSO 2001.  Brazil, Kazakhstan and Russian figures above are 75% of in situ totals.

Thus the world's present measured resources of uranium in the lower cost category (3.1 million tonnes) and used only in conventional reactors, are enough to last for almost 50 years.  This represents a higher level of assured resources than is normal for many minerals.  Further exploration and higher prices will certainly, on the basis of present geological knowledge, yield further resources as present ones are used up.  A doubling of price from present levels could be expected to create about a tenfold increase in measured resources.
This is in fact indicated in the IAEA-NEA figures if those covering estimates of all conventional resources are considered – 15.4 million tonnes, which is 240 years' supply at today's rate of consumption.  This figure still ignores the technological factors mentioned below, and unconventional resources such as phosphate deposits (22 Mt) and seawater (up to 4000 Mt).
Widespread use of the fast breeder reactor could increase the utilisation of uranium sixty-fold or more.  This type of reactor can be started up on plutonium derived from conventional reactors (and which the UK has a large supply of) and operated in closed circuit with its reprocessing plant.  Such a reactor, supplied with natural uranium for its "fertile blanket", very quickly reaches the stage where each tonne of ore yields 60 times more energy than in a conventional reactor.  
It needs to be emphasised that measured resources of uranium, the amount known to be economically recoverable from orebodies, are relative to costs and prices.  They are also dependent on the intensity of exploration effort.  Changes in costs or prices, or further exploration, may alter measured resource figures markedly.  At ten times the current price, seawater becomes a potential source of vast amounts of uranium.  Thus, any predictions of the future availability of any mineral, including uranium, which are based on current cost and price data and current geological knowledge, are likely to be extremely conservative.  
See also UIC Briefing Paper on Supply of Uranium.

Security of energy supply
From an international perspective, the key feature of nuclear power is that it has a very large resource base which can be expanded hugely by technology at the point of consumption.  Furthermore, unlike fossil fuels, years supplies can be stored safely and unobtrusively if political circumstances make that necessary or desirable.  Three years supply of nuclear fuel is already stocked in Europe, according to the EC report on its Green Paper.  Energy security was  a major factor in Finland's decision to build a fifth nuclear reactor, and it features strongly in public discourse in UK.

The Economic Generation of Electricity from Uranium
Much has been said about the economics of nuclear power, and certainly in the present circumstances of UK and elsewhere with low electricity prices, nuclear investment would be out of the question if that situation were likely to continue.
In fact there are many utilities around the world making good profits from nuclear power, but the focus of this submission is on the future and therefore the particular question of new plants, with the attendant high capital costs relative to gas-fired power generation.  Where nuclear energy is most significant in the present context however is that once the power stations are built, the cost of running them for up to 60 years is low, relative to alternatives.  This feature, with the concomitant assurance of stable electricity prices relative to gas-fired scenarios, is a major factor in energy security considerations.
A contrast makes the point:  if today a utility has a gas-fired plant and a nuclear plant each generating power at 5 cents/kWh, and the fuel price for each doubles, the gas-derived cost will rise to about 8.5 cents/kWh and the nuclear-derived cost to about 5.4 cents.
See also UIC Briefing Paper on The Economics of Nuclear Power.

New reactor designs, greater standardisation
Over the last few decades there have been significant advances in the technology involved in generating nuclear power.  Many reactors being built today are far removed from 1970s models as today's motor cars are from their 1970s counterparts, even though the basic design is broadly the same.  Those reactors being ordered today are even further ahead technologically, which means that the same basic design is further enhanced to be more safe, durable and efficient.  The other development is that there are fewer, larger and international reactor vendors, so designs are more standardised worldwide.
In the USA government initiatives have been put into place over the last 15 years to curb the costs of establishing new nuclear plants.  First, there has been a program of certifying new designs ahead of orders for them, so that the type achieves final design certification from the Nuclear Regulatory Commission (NRC).  This accreditation has now been given to three advanced reactor designs, and the NRC noted that they exceeded its "safety goals by several orders of magnitude".  A fourth design is currently undergoing assessment and a fifth is about to do so.
These NRC approvals are the first such generic certifications to be issued and will be valid for 15 years.  As a result of an exhaustive public process, safety issues within the scope of the certified designs have been fully resolved and hence will not be open to legal challenge during licensing for particular plants.  Utilities will be able to obtain a single NRC licence to both construct and operate a reactor before construction begins.  There is some prospect for these very thorough US assessments being transferable internationally.
The Westinghouse AP-1000, scaled-up from the AP-600, has now been submitted to the NRC for full design certification.  It represents the culmination of a 1300 man-year and US$ 440 million design and testing program.  Capital costs are projected at $1000 per kilowatt and modular design will reduce construction time to 36 months.  The 1100 MWe AP-1000 generating costs are expected to be below US$ 3.2 cents/kWh.  It is under active consideration for building in UK and USA and is capable of running on a full MOX core if required.
From Canada, the Advanced Candu Reactor (ACR) is an innovative concept, being developed from the CANDU-6.  While retaining the low-pressure heavy water moderator, it incorporates some features of the pressurised water reactor.  Adopting light water cooling and a more compact core reduces capital cost, and because the reactor is run at higher temperature and coolant pressure, it has higher thermal efficiency.  
The ACR-700 is 700 MWe but is physically much smaller, simpler and more efficient as well as 40% cheaper than the CANDU-6, giving projected operating costs of US$ 3 cents/kWh.  It will run on low-enriched uranium (about 1.5% U-235) with high burn-up, extending the fuel life by about three times and reducing high-level waste volumes accordingly.  Units will be assembled from prefabricated modules, eventually cutting construction time to four years.  Development is under way and the project is expected to be ready to build in 2005.  A larger version is under development.
Beyond these advances, the industry and governments are starting to define "4th generation" reactor design criteria for plant deployment beyond 2020.
All these designs are indicative of a sustained effort not only to innovate, but to standardise to a greater degree than with first- and second-generation nuclear reactors (at least outside France).  This will mean that series construction of a series of any type will bring economies as well as confidence in schedules and procedures for commissioning.
There is a very international focus on reactor operation and safety, with the World Association of Nuclear Operators (WANO) having been active for more than a decade in sharing expertise and spreading best practice.  The Western European Nuclear Regulators' Association is one worthy attempt to bring together national expertise, and has been significant in assessing Eastern Europe's nuclear plants with a view to EU accession.  
See also UIC Briefing Paper on Advanced Nuclear Power Reactors.

External Costs
A fundamental economic consideration for new generating capacity is the matter of external costs.  Until now it has been possible to consider only internal costs – fuel, operation & maintenance, capital & finance, and those waste costs which actually became part of annual expenditure.  Nuclear energy has always had to carry higher internalised costs than its competitors simply because from the outset waste disposal and decommissioning costs have generally been internalised via levies of some kind.  But looking ahead, any generating capacity needs to factor in such costs.
The external costs are defined as those actually incurred in relation to health and the environment and quantifiable but not built into the cost of the electricity to the consumer and therefore which are borne by society at large.  They include particularly the effects of air pollution on human health, crop yields and buildings, as well as occupational disease and accidents.  
Some of the best recent data on external costs are from UK where the average external cost of electricity generation is about 1.6 p/kWh - close to its present market price.  More significantly, the external cost for coal-fired electricity  is about 3.8 p/kWh, and for gas-fired electricity about 0.7 p/kWh – the latter mainly greenhouse–related.  Nuclear energy's external cost is only about 0.2 p/kWh.  All these are considering the full fuel cycle.  While the external cost of coal may change in the future as the major part of it due to air pollution is reduced, that for nuclear is unlikely to change, and that for gas will rise to about 0.7 p/kWh as Russian imports progressively replace indigenous UK supplies.  
See also UIC Briefing Paper on Energy Subsidies and External Costs.

Safety
Since the outset, and guided by experience in developing weapons during and immediately after the second world war, civil nuclear power has been very attentive to the hazards both of radioactive exposure and criticality.  In the west particularly, a large part of the investment in plant has been devoted to ensuring safety in both these respects, for operators as much as for the public.  Strict standards were set for the allowable statistical incidence of core damage accidents in reactors, and stricter ones still for any significant release of radioactivity.  
In the event, only one core-damage accident has occurred in a western reactor, and none that harmed anyone.  The contrast with standards of design and operation elsewhere are tragically obvious, but even there the lesson has been learned, and it is now possible to have great confidence in the safety of any new nuclear power reactors anywhere in the world – and, indeed, most older ones.  The record stands in the context of over 10,000 reactor-years of operation, in 32 countries.
Relative to any other major technology, the safety record of nuclear power is outstanding, and improving with each new generation of nuclear plants.  The safety record is excellent from fuel supply through reactor operation to waste disposal, and including all the transport in between.  Detailed figures are readily available.
The risks from western nuclear power plants, in terms of the likelihood and consequences of an accident or terrorist attack, are minimal compared with other commonly accepted risks.
See also UIC Briefing Paper on The Safety of Nuclear Power Reactors.

Wastes
Radioactive wastes arising from nuclear power generation are contentious.  Given that, the first point to make is that they have been handled safely and almost uneventfully for fifty years, which puts some of the wilder statements about them into perspective.
Secondly, they are no more hazardous than many other industrial wastes, which also need to be handled with care.  For nuclear wastes, the prime requirements are stabilisation and shielding, neither of which are unduly complex.  Furthermore, and in contrast to most other toxic wastes, the radioactivity declines with time.  For instance, the most hazardous of wastes, spent nuclear fuel, has its activity diminish to one thousandth by about 40 years.  After 150 years or so, brief human exposure to it would not be unduly hazardous.  After a few thousand years, the amount of radioactivity in it will be the same as in the corresponding amount of uranium ore.  Shielding, storage and disposal of such material is straightforward technically.
Politically the picture is different, and nuclear wastes at one stage became the ultimate symbol of NIMBY-ism.  However, it is noteworthy that in countries like Finland and Sweden, and to a large extent some other European countries, there has been a long-term plan agreed by parliament and which is well on the way to full implementation, on schedule.  In the USA, political resolve has now strengthened to do what was earlier intended in 1982 legislation, though the program is some years behind.  Recent clear and bipartisan decisions by the House of Representatives and the Senate mean that Congress and Administration have come into line after years of dodging the issue and the Yucca Mountain repository in Nevada designated for the nation's spent fuel is now proceeding. 
It is important to note that in most countries the management and disposal of civil nuclear wastes is funded from electricity production progressively, so that by the time sufficient waste has built up to require disposal, the cash is there.  In the USA, a levy on nuclear electricity production of 0.1 cent/kWh is more than enough to develop the deep geological repository at Yucca Mountain (it has already has built up an $18 billion fund).  A similar system is used to accumulate funds for decommissioning of nuclear plants.  This means that two key costs are internalised, where with other energy options they are not.
Nuclear power is the only energy-producing industry which takes full responsibility for all its wastes, and costs this into the product. 
See also UIC Briefing Paper on Waste Management in the Nuclear Fuel Cycle.

Environment
A key advantage of nuclear power is its relative lack of environmental impact.  Compared with any other technology for generating electricity it is remarkably benign environmentally.  Uranium mining is possibly the main environmental impact from the whole fuel cycle, and even there it is tightly controlled in most countries and along with zero release of hazardous levels of pollutants, there is provision to rehabilitate mine sites when they are worked out.
Greenhouse gases are not produced by power generation, and very few are produced elsewhere in the fuel cycle.  There are no emissions hazardous to plants, animals or humans.  As noted, the wastes are contained and managed with a view to secure disposal.
See also UIC Briefing Paper on Energy Analysis of Power Systems.

Public Opinion, Attitudes
Public opinion in most countries where people are at all familiar with nuclear power is either positive or at worst ambivalent.  It is noteworthy that in two countries, Germany and Sweden, which have looked along and hard at their involvement in nuclear power, along with the consequences of not having it, public opinion is strongly favourable.  The fact that minority coalition partners have leveraged a negative policy, albeit one which has little immediate implication, does not change this – in fact it may help bring it about.
The other point which needs making about public opinion is a phenomenon observed in several countries, notably UK and USA.  When people are asked about their attitude to nuclear power, a clear majority is positive.  When their politicians are asked the same question, they are even more positive.  But when the politicians are asked what the general public thinks, they indicate an overwhelmingly negative view, not simply opposite to survey data, but extreme, and assuming that hardly anyone out there supports the idea. 
Apart from surveyed public opinion, it now remarkable that a wider national sentiment seems to be evident in countries such as the USA and Scandinavia, expressing optimism regarding the future of nuclear energy as more fully coming into its own.  This is partly related to the greenhouse virtues of the technology, but also to the widening gap between negative rhetoric about nuclear energy and the actual experience of using it, and perceiving its reliability relative to popular technologies such as wind power.

For UIC briefing papers see: www.uic.com.au
Further information on this submission:  uic@mpx.com.au, contact Ian Hore-Lacy.