19 June 2014: Victory for Muckaty Traditional Owners in their battle to stop nuclear waste dump by Lib/Lab. (Image via F.O.E.)

With nuclear energy take-up shrinking post Fukushima, Australia continues to ignore the UN's call for an independent cost-benefit analysis of our high risk-low return uranium trade. ACF's Dave Sweeney examines the continuing spin by the MCA.

SOMETIMES A small signal can indicate a big change.

Dedicated mining paraphernalia hunters might have noticed a recent offering on the web based Gumtree market site  a hard hat from the controversial Ranger uranium mine in Kakadu.

With an asking price of $349 the 20 year old standard issue Energy Resources of Australia (ERA) head saver is valued at more than 950 times the current ERA share price. And while this posting is more a hard hatted than a hard headed assessment, it is one further indication of the changed status of Australia’s embattled uranium sector.  

“Fukushima changed everything.” This might sound like a line from the anti-nuclear lobby but it is a direct quote from BHP, the world’s biggest miner. And they are right.

The Fukushima disaster was directly fuelled by Australian uranium and increasingly its impacts are being directly felt by the Australian uranium sector.

In the continuing shadow of Fukushima nuclear powers contribution to the global energy mix is shrinking and has been eclipsed by renewables, and with over 200 reactor shut-downs due by 2040, the industry will have to run hard just to stay put.  

The related uranium market meltdown has been severe and seen prices, profits and employment numbers go south. Before Fukushima uranium was trading at $US130 per pound, now it is below $US30 and domestic uranium operations are on hold, extended care and maintenance or well behind planning schedules.

Australia now accounts for approximately 11% of global production, compared to the 2002−2011 average of over 18%. Australia's uranium production of 5,000 tonnes in 2014 was the lowest for 16 years. We are ripping less, shipping less and the commodity price is too low to make new mines viable or old mines sustainable. Rio Tinto’s Ranger uranium mine in Kakadu, Australia’s oldest operation, is limping to its 2021 finish line and extension plans have been shelved.

And while uranium is the absolute stand out example of changed circumstances seen against the remnant glow of Australia’s faded – and largely squandered – boom, these are not easy days for Australia’s wider mining sector.

Rising costs, cooling economies and volatile commodity prices are a tough trifecta and you would think that at such a time the peak industry group would have its eyes firmly on the extractive prize.

But the Minerals Council of Australia (MCA) is increasingly a case of the tail, or even the flea, directing the dog.

Australia’s big dollar commodity exports are coal and iron ore, neither is without complexity and one is increasingly without social license but they are the big end of town. Between them they generate around $100 billion per year in export earnings.

So when the whales are in trouble why is the MCA spending a disproportionate amount of time, money and political capital spruiking a radioactive minnow?

A glance at the MCA website shows three commodities are profiled coal, iron ore and uranium. And yellowcake really is the very poor cousin.

According to IBISWorld Australia’s uranium sector employs less than a thousand people and it generates around $700 million in sales. The uranium industry accounts for 0.01% (0.0084%) of jobs in Australia and in the 20131/14 financial year accounted for 0.19% of national export revenue. It is a sector that has promised much and delivered little.

But this hasn’t stopped the Minerals Council from pumping funds into poorly advised social and hard media campaigns of late to try to breathe life into the comatose uranium sector.

Recently the MCA launched a social media initiative to talk up the controversial mineral dubbed “#untappedpotential”. It was quickly subverted by critics under the hash tag ‘#epicfail’ but having failed to excite the virtual world the MCA extracted the wallet and paid for a same name advertising feature in the Australian Financial Review.

Unfortunately for the MCA, the best laid plans of mice, men and the Minerals Council of Australia share a common theme. Timing.

A double page advertising feature appeared on the same day that BHP Billiton formally confirmed in the national media that concerns over the impact of the Fukushima disaster on uranium demand and prices was the reason it had scrapped its long planned, budgeted and approved Olympic Dam mine expansion in South Australia.

Despite the paid for promises of the MCA and its newly appointed Chair Vanessa Guthrie from the stalled West Australian uranium hopeful Toro Energy, uranium mining is not and never will be a significant source of employment or economic activity in Australia.

The reality of Australia’s uranium sector is that it has created few jobs and dollars, caused considerable environmental damage at home and is escalating radioactive risk abroad.

Instead of listening to the tired old tune from the MCA’s song sheet, investors would do well to examine uranium’s under-performing balance sheet. And MCA members might ask themselves whether the lobby groups current priorities align with and address the mining sectors key challenges.

And as BHP’s own belated comments highlight, it is time to acknowledge the game-changing nature of Fukushima.

After Fukushima, the UN Secretary General called for an independent cost-benefit analysis of Australia’s high risk-low return uranium trade. This has not happened. It now needs to before this under-performing uranium sector fuels a future Fukushima.

Dave Sweeney is the nuclear free campaigner with the Australian Conservation Foundation. You can follow him on Twitter @nukedavesweeney.

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