



The Hon Martin Ferguson AM MP

Austock Uranium Conference: Value and Opportunities in Uranium

13 May 2011

Sydney

*Check against delivery

It is my pleasure to address the inaugural Austock Uranium Conference.

I thank Andrew Shearer and his team for their Uranium Sector Review and their  analysis of this vital industry.

Let me start by reinforcing that uranium mining is a key industry for Australia.

We are already the world’s third-largest uranium producer, with nearly half of the  world’s low-cost uranium reserves, and further opportunities on the horizon.

I will come back to these in a moment but let’s first take a look at recent events and  their impact on the industry both globally and here in Australia.

Fukushima: implications for the Nuclear Industry

The massive earthquake and tsunami that hit Japan on the 11th of March caused  extensive damage to the nuclear power plant at Fukushima.

Efforts to contain radiation leaks and maintain control of the plant continue to be  broadcast around the world, prompting concern and undermining confidence in the  safety of nuclear power.

This in turn has led some nations to review their nuclear programs.

We welcome these reviews and all efforts to further improve the safety of nuclear  power.

The health and safety of workers and the environment will always be our first priority.

This is no different to the approaches we have embraced in other industries, most  recently for example in the offshore petroleum sector.

We have learned the lessons from these events just as we will learn the lessons of  Fukushima.

It will lead to a safer and more robust industry in the future.

And I do believe nuclear power has a future.

Nuclear is an important part of the energy mix for many countries. It is a cleaner  energy option and powers millions of homes and businesses around the world.

In Australia, the Government’s position is to exclude nuclear power from our  domestic energy mix given the abundance of other energy sources available to us.

But we recognise that other countries are not so fortunate.

That is why we support uranium mining in Australia and its export.

Exports are of course governed by appropriately stringent safeguards - and these  will continue.

Australia only exports uranium to countries who have concluded a bilateral  safeguards agreement with us.

They must observe the Nuclear Non-Proliferation Treaty and have an Additional  Protocol with the International Atomic Energy Agency.

Although we do not have a civil nuclear power industry here in Australia, we can still  play a role in international efforts to improve safety in those countries that do.

The Foreign Minister, Kevin Rudd, has signalled Australia’s intention to submit a  range of proposals to strengthen safety in the nuclear power industry.

These proposals will look at:

Ã¢ÂÂ¢ Exploring the possibility of countries operating nuclear power plants  concluding bilateral safety agreements with the International Atomic Energy  Agency (IAEA);

Ã¢ÂÂ¢ Through this expanding the IAEA’s safeguards role to include safety auditing;  Ã¢ÂÂ¢ Establishing an independent panel of international experts under the IAEA to  analyse and provide advice to augment international cooperation on  emergency response and consequence management; and finally

Ã¢ÂÂ¢ Encouraging industry to do more to share compliance techniques.

As the Minister rightly said “There should be no trade secrets on measures for  meeting safety standards.”

The proposals will be considered as part of the IAEA-hosted high level conference  on nuclear safety in June.

This work will be critical to restoring public confidence in the industry.

Industry snapshot

The Australian Government’s support for the expansion of the Australian uranium  industry is reflected in our decision in 2007 to abandon the three mines uranium  policy.

On top of its export potential, we see the uranium industry offering long-term  economic benefits and jobs in regional Australia.

Our key export markets include the United States, North Asia and the European  Union.

We started shipments to China three years ago.

And we are now going to commence discussions with the United Arab Emirates on a  bilateral nuclear safeguards agreement that could potentially open up a new market  for Australia’s uranium.

Last year, we exported nearly 7,000 tonnes of uranium.

While production was down on recent years, the reasons had more to do with wet  weather at Ranger and a shaft failure at Olympic Dam than with systemic failures.

If production meets predictions, tonnage will double within four years - and  quadruple within 20.

Global demand for uranium continues to grow.

I endorse a main finding of Austock’s Uranium Sector Review - the fundamentals of  supply and demand point to a period of strength in the uranium sector.

Within 20 years, global uranium consumption may rise to 123 kilo tonnes.

Australia is well-placed to meet growing demand.

South Australia boasts an impressive pipeline of investment.

The next few months should see production from Honeymoon.

Expanding Olympic Dam would boost output eight-fold.

That would mean 19,000 tonnes of uranium at its peak.

In addition to exports I see potential here in terms of jobs for some of our regional  communities.

In Cairns we are implementing a fly-in fly-out model that I believe could also be a  possibility for North West Tasmania.

Workers displaced from the forestry industry could potentially help meet labour  requirements if the Olympic Dam expansion goes ahead.

This is a trend we are witnessing nationwide across the minerals and energy sectors  - the emergence of a mobile workforce that allows workers to benefit from high  paying positions while remaining based in their local communities.

The 2011-12 Budget delivered earlier this week in Canberra provided a  comprehensive skills and training package worth over $3 billion that will help ensure  a highly skilled workforce in Australia.

It complements our other measures to increase temporary migration and offer  enterprise migration agreements for large projects.

Together these measures will help us maximise the opportunities stemming from our  natural resources - making it easier to deliver projects on time and on budget.

New opportunities include the Woomera Prohibited Area after our decision -  announced earlier this month - to implement a framework that will open up exciting  new uranium mining opportunities in the Woomera Prohibited Area.

The Australian Government has agreed to what amounts, in effect, to a timeshare  arrangement for this area.

This is a good outcome for national security and a good outcome for industry.

We estimate this area has more than $35 billion in development potential over the  next decade.

Geoscience Australia estimates three-quarters of our known uranium resources are  in the Woomera Prohibited Area, which is roughly the size of England.

More exploration may well uncover even more potential.

After all, this area is yet to be really opened up.

So the new framework gives industry certainty to invest.

At the last count, more than 300 nuclear reactors were on the drawing board  according to the World Nuclear Association.

That would come close to doubling the number already up and running.

Taking into account any potential revisions to planned nuclear programs does not  change the fact that more nuclear power stations are inevitable.

State and Territory policies

Such are the opportunities.

Clearly, it is not just government policy at a federal level that impacts on how these  opportunities are developed but also very much at a state and territory level.

Uranium mining is well established in the Northern Territory and South Australia with  their respective governments seeking to facilitate further investment.

In Western Australia, lifting the ban on uranium mining in 2008 has brought a new  surge in development.

Four projects are well underway, with production likely within two years.

As you know the current policy of the Queensland Government allows exploration  but prohibits uranium mining.

There are identified deposits in Queensland and industry has expressed its interest  in potentially developing these. I expect therefore that this is a policy issue that the  Queensland Government will continue to confront.

Uranium exploration and mining have long been banned in New South Wales and  Victoria.

This limits our knowledge of potential deposits in these states.

The issue of uranium exploration and mining is something I believe the incoming  governments in both New South Wales and Victoria will need to consider.

Where uranium mining does occur, irrespective of the jurisdiction or political party in  power, the key focus must always be on appropriate and effective regulation.

We engage with industry to reduce risks and make Australia a stable place to invest  in uranium.

The Uranium Council is an important mechanism for achieving this and includes  industry and Indigenous NGOs as well as government.

Its work drives sustainable development, with special attention to regulation,  transport, stewardship, Indigenous engagement, health, safety and the environment.

In doing so, we ensure Australia’s uranium industry will continue to expand within  world’s best-practice safety and environmental safeguards.

Conclusion

Ladies and gentlemen, in conclusion I acknowledge that this has been a challenging  time for your industry.

But in my view the industry will continue to develop, it will expand and emerge from  the current difficult period safer and more resilient.

Australia’s uranium potential is strong, and our policy is robust.

Thank you



