MUMBAI – It is time to put money on Uranium. Over a year ago, this statement would have been ridiculed, as Uranium prices worldwide showed no signs of any upward movement, even as other metals went on a Northern journey. Today, though, things have turned around dramatically, much of it thanks to the renewed hunger for this radioactive metal by two of the world’s fastest developing economies – India & China.
On Monday, India and France signed a multibillion dollar agreement to build two Nuclear power plants in India. These are the first two in the proposed construction of a total of 20 such nuclear plants in the power-starved country, India.
The agreement, valued at about $ 9.3 billion, was signed in the presence of Indian Prime Minister Manmohan Singh and French President Nicolas Sarkozy. The latter was on a four-day visit in India.
One of France’s main nuclear power companies, Areva SA, will build two pressurised reactors of 1,650 megawatts each at Jaitapur in the western Indian state of Maharashtra.
The signing of the agreement was the official culmination of a 3-year journey after the signing of the Indo-US civilian nuclear deal and has finally set the ball rolling.
With Beijing already on a well-planned path of setting up many more nuclear plants, for the past few months, China’s appetite for Uranium has shown a steady increase. As a consequence, prices have been pushed up in the global market.
Like India, China has already given top priority to nuclear energy in its 12th Five-Year Plan (2011-2015). With France inking the crucial pact with India now, Uranium prices shot up further this week, on expectations of an increase in demand expectations.
The spot prices have gone up to above $60 a pound, which is a 50% rise in the last four months.
With Uranium output expected to rise on the back of increased global demand and the export-import of this nuclear plant fuel metal getting a fresh lease of life, Uranium is suddenly at the centre of everybody’s attention.
In a sense, the Indo-French agreement re-focuses attention on the exploration of the available Uranium resources in India. The Indian Government has adopted a 2-pronged approach in the procurement of nuclear fuel, especially Uranium.
One is to step up exploration of Uranium within its own borders, while the other is to increase imports from the nuclear suppliers group of nations.
India is already committed to spending about $177m (Rs 8bn) till the end of the present 5-year Plan period ending March 2012 for further exploration of Uranium resources, in addition to its present capacity.
There are also clear signs that the Govt of India, so also its China counterpart, will do their utmost to lay their hands on uranium, wherever and in whatever form available.
Recently, just before his retirement, the then Chairman of the Department of Atomic Energy (DAE) and a very well-known figure in India’s energy circles, Anil Kakodkar had said publicly that the rejuvenation of India’s Nuclear Power Programme would make it necessary to continue efforts to establish newer deposits and exploitation of uranium to meet the indigenous nuclear power programme demands of the future.
What this eminent scientist meant was that the country would be getting into further exploration of the metal.
Already, there are reports coming in that as a step-up in the supply of domestically mined uranium, nuclear units fuelled by domestic Uranium, are operating at a higher power level of about 70%, in the last year or so.
It is no secret that for decades, because of the shortage in the availability of Uranium due to India’s refusal to sign the Non-Proliferation Treaty, India’s nuclear power programme had faced the problem of lower capacity.
But post the Indo-US civilian nuclear deal, the ball was set moving on the uranium imports from nuclear suppliers group nations for the fuel-starved domestic nuclear power programme.
While on the one hand, the Indian Government moves into fresh exploration for Uranium to meet its short-term needs, the state-run Nuclear Power Corporation of India Ltd (NPCIL), could well look at fuel imports to run its existing capacity at higher efficiency.
India is Asia’s 3rd largest energy consumer and its need for uranium is predicted to increase 10-fold by 2020. India will need about 8,000 tons of uranium annually, according to Jagdeep Ghai, finance director at the state-owned Nuclear Power Corporation of India.
Needing additional 1,500-2,000 tonnes of uranium each year to raise the share of nuclear energy, India’s nuclear market has been projected to grow to around $40 billion by 2020.
Currently, India produces only about 450 metric tonnes of Uranium.
India’s present day Uranium resources can best be described as “modest”. Supply of about 54,000 tonnes are assured while another additional 23,500 tonnes remains to be mined.
The mining and processing of Uranium is carried out by the Uranium Corporation of India Ltd (UCIL), a subsidiary of the Department of Atomic Energy (DAE), at various places around the nation.
In the State of Jharkhand, mining operations have been ongoing since 1967. At various points in time, 1995, 2002, more mines were opened up in this State. The six mines in Jharkhand produce about 400 tonnes of Uranium a year.
Besides Jharkhand, in 2005 and 2006, plans were announced to invest almost $700 million to open further mines in other Indian States of Meghalaya at Domiasiat-Mawthabah and in Andhra Pradesh at Lambapur-Peddagattu.
In Andhra Pradesh, there are three kinds of Uranium mineralisation in the Cuddapah Basin, including unconformity-related deposits in the north of it.
The northern Lambapur-Peddagattu project in Nalgonda district 110 km southeast of Hyderabad has environmental clearance for one open cut and three small underground mines (based on some 6000 tU resources at about 0.1%U) but faces local opposition.
Way back in August 2007, the government had approved a new $ 270 million underground mine and mill at Tummalapalle near Pulivendula in Kadapa district, at the south end of the Basin, and 300 km south of Hyderabad. Its resources have been revised upwards to 40,000 tU and first production is expected early in 2011, using alkaline leaching for the first time in India.
A further northern deposit lies near Lambapur-Peddagattu in Koppunuru, in Guntur district in the same State. Production in the Tummalapalle mine is expected to start any day.
According to Uranium Corporation of India Limited (UCIL), huge Uranium reserves have been identified at Lambapur-Peddagattu region in Nalgonda district of Andhra Pradesh.
UCIL is in the process of obtaining clearances for construction of three underground mines in the area and another processing plant at Seripallee, 52kms away from the main site.
Uranium mining in the far-flung North Eastern State of Meghalaya, may also start soon but protests by locals need to be overcome. The UCIL has designated the Domiasiat area for mining and the pre-project activities have already started.
Incidentally, Meghalaya has the third largest uranium reserves after Jharkhand and Andhra Pradesh. It accounts for 16% of India’s uranium reserves, with deposits estimated around 9,500 tons and 4,000 tons at Domiasiat and Wakhyn.
In Karnataka, the UCIL is planning a small Uranium mine at Gogi in Gulbarga area in 2012, after undertaking a feasibility study. A mill is planned for Diggi nearby. Total cost is set to about $122 million.
Resources are sufficient for 15 years mine life, but UCIL plans also to utilise the uranium deposits in the Bhima belt from Sedam in Gulbarga to Muddebihal in Bijapur.
In September 2009, state-owned Oil & Natural Gas Corporation had proposed to form a joint venture with UCIL to explore for uranium in the North East State of Assam.
Not all of India’s requirement for about 8,000 tonnes of Uranium annually will be met from its own reserves so it will have to rely on imports, too.
India has already signed civil nuclear agreements with six countries, including Canada, Kazakhstan and Namibia, to secure stakes in overseas uranium mines.
India is said to be especially looking at Namibia to fill the gap in the supply-demand of Uranium. Namibia is the 4th largest miner of the precious metal. India and Namibia had recently signed a pact to export Uranium and Diamonds to India.
What will also help India is the fact that just a few days ago, Namibia had sought to develop a comprehensive nuclear energy program in order to make use of its uranium resources.
As reported by AfricaNews, the Namibian government is seriously considering the development of nuclear power in order to complete the national energy mix and provide sufficient energy for development, the Mines and Energy minister of Namibia Isak Katali was quoted as saying.
In July this year, India’s science and technology minister had reported that the country had received 868 tonnes of Uranium from France, Russia and Kazakhstan.
This comprised: 300 tonnes of natural uranium concentrate from France’s Areva, 58 tonnes as enriched uranium dioxide pellets from Areva, 210 tonnes as natural uranium oxide pellets from TVEL and 300 tonnes as natural uranium from KazAtomProm.
Canadian companies including global uranium giant Cameco are also planning to enter the Indian market soon. Canada is one of the largest producers of Uranium.
India did not have domestic uranium supply capable of supporting its expansion plans. The Indo-Canadian agreement will give us the opportunity to serve this market, according to Cameco director Lyle Krahn.