|ROSATOM TO TACKLE URANIUM SHORTAGE
MOSCOW. (Igor Tomberg for RIA Novosti)
A founding treaty to set up the Uranium Mining Company was signed on
November 2 at Russia’s Federal Agency for Nuclear Power (Rosatom). The
event marked the beginning of a new era in the Russian nuclear industry,
aimed at consolidating all the branch’s uranium production assets.
The agency has proposed to invest between $60 and $70 million in the
construction of dozens of nuclear power plants by 2030. These measures and
money are expected to prevent a shortage of electric power and increase
the share of nuclear energy in Russia’s energy balance to 25%. The plan
envisages the construction of two generating units annually with 1
gigawatt capacity each. But the nuclear industry’s ambitious plans both
in Russia and abroad may be thwarted by a shortage of uranium raw
materials. To tackle the problem, the agency has begun actively
implementing its own raw materials program.
The overall volume of discovered uranium reserves whose production costs
do not exceed $130 per kilogram is about 4.7 million metric tons, which is
enough for 85 years of operation of all the world’s nuclear power
The overall volume of all uranium reserves in the world is probably much
greater and is about 35 million tons, says the “Uranium 2005: Resources,
Production and Demand” report, prepared by the International Atomic
Energy Agency (IAEA) and the Organization for Economic Cooperation and
Country-by-country data differ a great deal. According to some Russian
sources, discovered uranium reserves in Russia amount to 615,000 tons (15%
of world reserves), and probable reserves to 830,000 tons. U.S. Energy
Department data show that the largest reserves are in Australia (about 27%
of world reserves, although Australia does not have a single nuclear
plant), Kazakhstan (17%), Canada (15%), South Africa (11%), Namibia (8%),
Brazil (7%), Russia (5%), and the United States and Uzbekistan (4% each).
Ukraine and Kyrgyzstan, which possess sizable uranium reserves, are not
included in the report.
Russia produces over 3,000 tons of uranium annually (2004 data), and
consumes about 9,000 tons. If the nuclear reform goes through, by 2020 the
uranium demand will grow to 16,000 tons. There is a plan to increase its
production by a thousand tons by 2010. This is clearly not enough even for
home consumption. If, however, production is not increased approximately
fivefold, Russia will finally turn from a uranium exporter (a country
supplying dozens of foreign reactors) into an importer.
The optimum method of supplying nuclear projects inside and outside the
country is for Russia to restore the nuclear industry that existed in the
U.S.S.R. With that purpose in view, the Federal Agency for Nuclear Power
has begun negotiations with Ukraine and Central Asian countries, above all
Kazakhstan. All founding documents are already prepared to set up an
international uranium enrichment center based on the Angarsk Electrolysis
and Chemical Plant. The center will be set up jointly with Kazakhstan, but
third countries interested in uranium enrichment will be able to use its
services. Shareholders of the joint venture will have open access to all
aspects of its operation, but the enterprise will not be allowed to
“touch” military technologies.
Besides, steps have been taken to consolidate the branch’s production,
financial, intellectual and raw materials resources to raise natural
uranium output and processing to meet the growing requirements of the
country’s nuclear industry. The signing of the founding documents of the
Uranium Mining Company, which will combine the uranium assets of two large
Russian state-owned companies – TVEL and Techsnabexport – is
significant in this respect. The world’s third largest uranium mining
company has been created.
TVEL will contribute three mining assets to the company: Hiagda,
Priargunskoye Production Mining Chemical Association, and Dalur.
Techsnabexport will contribute the Elkonskoye deposit in Yakutia and its
share in the Russian-Kyrgyz-Kazakh JV Zarechnoye. In addition, the company
may include Kazakhstan’s Yuzhnoye Zarechnoye and Budyonnovskoye
deposits, and set up JV Akbastau to develop them. Additionally,
Techsnabexport is continuing talks to start up a uranium operation in
Uzbekistan. The new uranium company might tap world uranium markets and
even hold an IPO.
The new mining company will do several things: follow up exploration and
exploitation of deposits located in Russia and development of the
country’s raw materials, including geological prospecting. The company
is also expected to set up joint ventures to produce uranium in and
outside the country, and import uranium.
In addition, it will channel Russian and foreign investments into uranium
production. The new company may form a partnership with western investors
to develop uranium deposits.
For example, Japan’s Mitsui, which signed an agreement with
Techsnabexport to finance the advanced development of the Elkonskoye
deposit, may become a minority shareholder of the new company. The list
also includes Canadian Cameco, and world giants BHP Billiton and Rio Tinto.
The presence of foreigners in a traditionally off-limits sector is not an
attempt to follow the fashion, but a financial necessity. By establishing
a joint mining company, the agency ensures the construction of nuclear
power plants in Russia and abroad. Discovering and developing deposits
involves massive resources, and the only way to increase processing and to
prevent uranium shortages in the future is to attract private foreign
To be competitive the Russian nuclear industry must offer its projects on
the world market and work together with its CIS neighbors. In addition to
building nuclear facilities abroad, the industry also exports enriched
uranium, nuclear fuel, and stable and radioactive isotopes, i.e. has a
full spectrum of high-technology services available on the international
Supplying raw materials calls for complex organizational, technical and
investment decisions. Restoration of Soviet-era cooperation in uranium
production and processing might benefit all participants in the process,
and make CIS countries producers and exporters of advanced nuclear
Igor Tomberg, Ph.D. (Economics), is a leading research fellow at the
Center for Energy Research, Russian Academy of Sciences’ Institute of
World Economy and International Relations.
The opinions expressed in this article are those of the author and may not
necessarily represent those of RIA Novosti.–0-