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Queensland lifts its uranium ban, but is the price worth the cost?

The Ranger uranium mine, inside the World Heritage-listed Kakadu National Park in the Northern Territory. AAP Image/Tara Ravens

As of today, Queensland has lifted a 32-year ban on uranium mining. That decision was taken within months of the 2012 state election, despite Premier Campbell Newman’s pre-election promise not to restart mining the radioactive mineral.

Miners are being invited to apply to restart the industry under the Queensland’s government’s uranium action plan, which will mean Canadian company Mega Uranium can reopen the Ben Lomond and other mines in north Queensland.

Queensland’s resumption of uranium mining comes only days after Australia’s newest uranium mine, Four Mile in South Australia, officially opened on 25 June.

Yet the price of uranium has fallen from a high in 2007 of US$70 a pound to $US28, due to factors including oversupply and what the Wall Street Journal has described as a “post-Fukushima funk”.

Given the prices are so low that The Australian has reported that Four Mile is already losing money, while the Beverley mine has been mothballed since January, why are Australian states looking to open more mines?

Australia’s main uranium deposits

Australia is the world’s third-biggest uranium producer, after Kazakhstan and Canada. According to the World Nuclear Association, the industry generated A$823 million in uranium exports in 2012/13, along with about A$21 million in royalties in Australia each year, with the bulk coming from the Ranger mine.

Recent uranium production in Australia. World Nuclear Association

Uranium mining at Queensland’s Ben Lomond site was halted in 1982, ahead of the “three mines policy” introduced by the incoming Hawke Labor government in 1983. The policy restricted Australian uranium mining to three sites: Ranger and Nabarlek in the Northern Territory and Olympic Dam at Roxby Downs in South Australia.

Australia’s uranium past and present mines, as well as major deposits. The newly opened Four Mile is yet to be added to this map. World Nuclear Association, April 2014., CC BY-SA

The three mines policy was officially abandoned in 1996 by the Howard government, but uranium mining has been slow to flourish since then.

Until last week, just four mines operated. Narbarlek was decommissioned in 1994/95, while South Australia’s Beverley mine (currently mothballed) opened in 2001, Honeymoon in 2011 and now Four Mile has opened.

Our nuclear history

With Australia holding around a third of the planet’s uranium resources, it’s no surprise politicians have toyed with exploiting the atom since World War II.

In 1941, Australian physicist Mark Oliphant indiscreetly told an Australian diplomat in the UK that nuclear energy derived from uranium was being developed secretly for both war and industry.

After World War II, the boom in infrastructure building made powering growth even more important. Uranium was known to be a high-grade energy source: about 120,000 tonnes of black coal (or 350,000 tonnes of brown coal) would need to be burnt to obtain the energy of just one tonne of uranium fuel.

During the 1950s, as the British tested their nuclear weapons in Australia, nuclear power seemed to promise a self-sufficient energy future, not to mention export wealth and national security.

Maralinga trees after a blast. Courtesy of Liz Tynan

In 1949, extensive uranium deposits were discovered in the Northern Territory, at Rum Jungle, and in Queensland and South Australia soon after. Uranium from these mines powered British nuclear weapons that were tested on Australian soil. The later Non-Proliferation Treaty that Australia signed in 1970 and ratified in 1972 restricted the use of Australian uranium to peaceful purposes.

In the 1970s, under the Fraser Coalition government, Australia became a major exporter of uranium. Japan, Iran, Italy and the European Economic Community emerged as buyers, and after much political debate, the terms of sale for Australian uranium were finally struck. The ALP, frequently conflicted over uranium mining and export, adopted as its policy a moratorium on export of uranium, and would later amend this to the compromise of the three mines policy, which it has since abandoned.

Is Australia set for a new nuclear era?

Until recently, Australia banned the sale of uranium to India since that country was not party to the Non-Proliferation Treaty.

Under Labor’s Julia Gillard, that ban was overturned, potentially opening a huge new market.

Uranium prices have dropped 30% in the past 12 months, to a low of $US28 a pound. Not until 2020, with the probable reopening of the Japanese nuclear power stations and expansion of the markets in China, is uranium expected to turn a profit.

The price of uranium remains depressed, but as countries decide to tackle climate change by switching to nuclear power the market for uranium could rise again.

Battles ahead over Queensland exports

The highest concentration of Queensland’s uranium mines sit in the northern tropics, an area prone to Category 5 cyclones.

A 2013 Swiss study found uranium was far more mobile than originally thought. Uranium once extracted, becomes soluble in water, increasing the chances of contamination or radioactive dust carried in high winds and heavy rainfall.

If Ben Lomond is reopened, the quickest way to export its uranium would be through the city of Townsville, home to 190,000 people, which is only 50km from the mine.

The location of the Ben Lomond mine in Queensland. Mega Uranium, CC BY

The Port of Townsville has said it has the capability to “facilitate the transportation and export of yellowcake”. The Queensland’s government’s uranium action plan recommends that:

Queensland’s efforts should be [put] on facilitating the use of existing ports and shipping lanes by industry for the export of uranium.

However, the Port of Townsville sits within the Great Barrier Reef World Heritage Area and close to sensitive environments including the Great Barrier Reef Marine Park, dugong protected areas, seagrass beds, fringing coral reefs and mangrove forests.

Last year, Great Barrier Reef Marine Park Authority chairman Russell Reichelt told the ABC that:

I think shipping of any toxic cargo would be of concern. But really we would have to see a proposal and we would have to consider that.

So this is set to be a contentious issue: while economic development of the north has bipartisan support at a federal, state and local government level, a number of locals and environmental groups have said they will challenge any plans to reopen uranium mines and exports from Queensland.

The big question for Queensland residents to consider now is whether the return of uranium mining to the state will be worth the wait for the uranium price to recover, given the risks attached to transporting the mineral through populated and environmentally-sensitive areas.

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