On Monday, uranium industry boosters gathered in Adelaide for the annual Paydirt Uranium Conference. It's a set piece — the boosters trot out ridiculous claims, sections of the media regurgitate them. Then there are the big nuggets of straight-up industry propaganda, like the Australian Uranium Association's Executive Director Michael Angwin's claim that Australia "has enough reserves to be to uranium what Saudi Arabia is to oil".
Never mind that Australia's uranium export revenue in 2011 was 466 times lower than Saudi oil revenue in the same year. Australia would need to supply global uranium demand 31 times over to match Saudi oil revenue! Others who draw ludicrous comparisons between Australian uranium and Saudi oil include former politicians Mike Rann and Kevin Foley, academics Ian Plimer and Haydon Manning, Access Economics, and Paul Howes from the Australian Workers Union.
A new report released by the Australian Conservation Foundation: Yellowcake Fever: Exposing the Uranium Industry's Economic Myths, shows that uranium accounted for just 0.29 per cent of Australia's export revenue in the 10 years from 2002−2011. In the last financial year, uranium revenue of $607 million was 103 times lower than the biggest earner, iron ore. Milk and cream generate twice as much export revenue as uranium — and can't be turned into Weapons of Mass Destruction.
Uranium export revenue is still more underwhelming given that the four companies mining uranium in Australia are all either majority foreign owned or 100 per cent foreign owned; in other words, a sizeable proportion of that export revenue never leaves the Northern Hemisphere and never comes anywhere near Australia.
By the highest estimate, uranium mining and exploration accounts for 1,760 jobs in Australia — just 0.015 per cent of all jobs. The Australian Uranium Association claims the industry is a "significant employer of First Australians" but in fact it provides just one job for every 3,000 Indigenous Australians.
Uranium mania reached its zenith in the mid-2000s due to a spectacular price bubble which saw the spot price peak at US$138 per pound in June 2007. Since the bubble burst, the uranium industry has been battered as a result of falling prices, the Global Financial Crisis, the failure of the nuclear power "renaissance" to materialise, and serious problems and production shortfalls at Australia's operating uranium mines.
Since March 2011 the fallout from the Fukushima disaster in Japan (a disaster that was directly fuelled by Australian uranium) has compounded the industry's problems. In 2006, The Bulletin magazine spoke of a "radioactive heaven" but by late 2011 The Australian described the sector as passing through Death Valley.
A major constraint is the modest size of the global market for uranium. The value of global uranium demand is around $9.6 billion annually. Even if Australia were the world's sole uranium supplier, uranium revenue would fall short of that from iron ore by a factor of 6.5.
With nine countries producing over 1000 tonnes of uranium annually and 10 countries producing smaller quantities, uranium accounts for a significant fraction of export revenue in just one country — Kazakhstan. Kazakhstan accounted for 36 per cent of global production in 2011, and thus uranium was a significant contributor to the country's modest national economy and export revenue.
Australia has around 31 per cent of the world's known recoverable uranium resources (to US$130/kg). However a majority of that uranium is in one location — BHP Billiton's Olympic Dam mine. Last year the Olympic Dam expansion was cancelled, BHP disbanded its uranium division and sold the Yeelirrie uranium lease in Western Australia for about 11 per cent of the nominal value of the resource.
Also indicative of the state of the industry was Cameco's announcement in February of a $162.5 million write-down on the Kintyre project in Western Australia. Just months after first production at the Honeymoon mine in north-east SA in September 2011, project partner Mitsui announced its decision to withdraw as it "could not foresee sufficient economic return from the project".
In addition to industry propaganda, governments routinely inflate the significance and potential of the uranium industry, as do industry "analysts" (some of them market traders), some business journalists and some academics. There are real-world consequences to uranium mania — many "mum and dad" retail investors have been burned, especially during the speculative price bubble in the mid-2000s.
An independent inquiry is long overdue to objectively weigh the uranium industry's economic benefits against its effects on environmental and public health, safety and security, particularly in the shadow of Fukushima.