Japan's Fukushima nuclear accident in March has damaged the credibility of the uranium mining industry and will slow nuclear power growth for up to two years, a Rio Tinto PLC (RIO) executive said Thursday.
Japan
's
Fukushima
nuclear accident in March has damaged the credibility of the uranium mining
industry and will slow nuclear power growth for up to two years, a Rio Tinto
PLC (RIO) executive said Thursday.
Andy Lloyd, chief development officer for Rio Tinto's uranium unit, said it
will take time for nuclear power producers to address the safety and design
issues learned from
Fukushima
. "We
continue to believe that will slow down the industry for a few years; a year or
two, we'd hope," Lloyd told a nuclear power seminar.
But he expects nuclear growth to eventually resume, "driven by
China
,
especially". The medium-term outlook for uranium, the key fuel for nuclear
reactors, remains clouded in the wake of
Japan
's
atomic energy crisis.
The crisis began in March when explosions crippled the
Fukushima
reactor complex following the country's devastating earthquake and tsunami. Rio
Tinto is a major uranium producer via its majority ownership of Energy
Resources of Australia Ltd. (ERA.AU), along with management of the Rossing mine
in
Namibia
.
Macquarie
said this week that
Japan
's
nuclear capacity utilization fell to 26.4% in August, the lowest level
recorded, as further post-Fukushima shutdowns came into effect. It compares
with 70% utilization rates at the start of the year, the bank said.
"We expect
Japan
's
uranium demand to drop 36% year-on-year in 2011, which has pushed the ex-China
market into surplus despite supply disappointments,"
Macquarie
said.
The spot price of U3O8, the most actively traded compound of uranium, was
US$54.00 a pound on September 19, according to U.S.-based UX Consulting Co. This
is down from more than US$70/lb in January.
Along with uncertainty about demand, Lloyd said the "high capital
cost" of new nuclear reactors may be an issue for the sector as it looks
to attract funding in coming years. But
China
's
current investment in large, new generation nuclear power is "bringing
capital costs down, and very rapidly", he said."That is a key trigger
for future economics," Lloyd said.
Rio Tinto is a major uranium producer via its majority ownership of Energy
Resources of Australia Ltd. (ERA.AU), along with management of the Rossing mine
in
Namibia
.
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