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Australia's Uranium Production and Exports

Statistics related to Australia's exports of Uranium Ore Concentrates (UOC) are listed in Table 1.

Table 1: UOC export and nuclear electricity statistics
ITEM DATA
Total Australian UOC exports 2018–19 7,571 tonnes
Value Australian UOC exports $734 million
Australian exports as percentage of world uranium requirements4 9.6%
Number of reactors (GWe) these exports could power5 39
Power generated by these exports 253 TWh
Expressed as percentage of total Australian electricity production6 97%

Australia has around one third of the world's uranium resources, and is the world's third ranking producer, accounting for approximately 10 per cent of annual global production. There are currently three operating uranium mines: Ranger in the Northern Territory, and Olympic Dam and Beverley Four Mile in South Australia. The Ranger uranium mine is scheduled to close in January 2021. The Honeymoon uranium mine in South Australia was placed in care and maintenance in 2013 but has since been purchased by Boss Resources Limited, which has plans to restart and expand the operation. There are four projects in Western Australia with state environmental approval: Cameco Australia's Yeelirrie and Kintrye projects, Toro Energy's Wiluna project and Vimy Resources' Mulga Rock project.7 The Government of Western Australia has decided it will not approve any other uranium mine projects.

Uranium prices have been recently influenced by large production decreases by Kazakhstan and Canada. Challenges facing the uranium processing industry have also resulted in significant shifts to where Australian uranium is exported.8 The uranium stockpiles developed by several Asian countries during the period of lower uranium prices, may decrease future purchasing requirements and reduce future imports into those countries. Therefore, promising forecasts of new nuclear reactor builds in the Asian region may not necessarily equate to increased demand for Australian uranium – as countries may choose to draw down on their stocks.

The United States is the largest market for Australian uranium – accounting for over half of final demand (including both direct exports, and exports that are processed in third countries). In July 2018, the US Secretary of Commerce initiated an investigation into US imports of uranium. Under US law; Section 232 of the Trade Expansion Act, the US President can impose measures to reduce imports of a good, if an investigation finds that the import of that good threatens to impair US national security. On 12 July 2019, President Trump concluded that uranium imports do not threaten the US' national security. President Trump announced the establishment of a United States Nuclear Fuel Working Group, ‘…to develop recommendations for reviving and expanding domestic nuclear fuel production…' and ‘…examine the current state of domestic nuclear fuel production to reinvigorate the entire nuclear fuel supply chain, consistent with US' national security and non-proliferation goals.'9 This working group is expected to submit a report in mid-October 2019 to the US President. Recommendations from this working group could impact the destination of Australian uranium exports.

Drums of uranium ore concentrate (UOC) being prepared for export

Figure 2: Quantity and value of Australian UOC exports from 2009/10 to 2018/19 FY

In 2009-10 Australia exported 7,555 tonnes of UOC valued at A$758 million. In 2010-11 Australia exported 6,950 tonnes of UOC valued at A$610 million. In 2011-12 Australia exported 6,918 tonnes of UOC valued at A$607 million. In 2012-13 Australia exported 8,391 tonnes of UOC valued at A$823 million. In 2013-14 Australia exported 6,701 tonnes of UOC valued at A$622 million. In 2014-15 Australia exported 5,515 tonnes of UOC valued at A$532 million. In 2015-16 Australia exported 8,417 tonnes of UOC valued at A$926 million. In 2016-17 Australia exported 7,081 tonnes of UOC valued at A$596 million. In 2017-18 Australia exported 7,343 tonnes of UOC valued at A$575 million. In 2018-19 Australia exported 7,571 tonnes of UOC valued at A$734 million.

 

Australia's nuclear safeguards policy

The Australian Government's uranium policy limits the export of Australian uranium to countries that: are a party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT);10 have a Safeguards Agreement and Additional Protocol with the IAEA in force; and are within Australia's network of bilateral nuclear cooperation agreements. These nuclear cooperation agreements are designed to ensure IAEA safeguards and appropriate nuclear security measures are applied to AONM (Australian Obligated Nuclear Material) exported overseas, as well as a number of supplementary conditions. Nuclear material subject to the provisions of an Australian nuclear cooperation agreement is known as AONM. The obligations of Australia's agreements apply to uranium as it moves through the different stages of the nuclear fuel cycle, and to nuclear material generated through the use of that uranium.

All Australia's nuclear cooperation agreements contain treaty-level assurances that AONM will be used exclusively for peaceful purposes and will be covered by safeguards arrangements under each country's safeguards agreement with the IAEA.

In the case of non-nuclear-weapon states, it is a minimum requirement that IAEA safeguards apply to all existing and future nuclear material and activities in that country. In the case of nuclear-weapon states, AONM must be covered by safeguards arrangements under that country's safeguards agreement with the IAEA, and is limited to use for civil (i.e. non-military) purposes.

The principal conditions for the use of AONM set out in Australia's nuclear cooperation agreements are:

  • AONM will be used only for peaceful purposes and will not be diverted to military or explosive purposes (here military purpose includes: nuclear weapons; any nuclear explosive device; military nuclear reactors; military propulsion; depleted uranium munitions, and tritium production for nuclear weapons)
  • IAEA safeguards will apply
  • Australia's prior consent will be sought for transfers to third parties, enrichment to 20 per cent or more in the isotope 235U and reprocessing11
  • Fall-back safeguards or contingency arrangements will apply if for any reason NPT or IAEA safeguards cease to apply in the country concerned
  • internationally agreed standards of physical security will be applied to nuclear material in the country concerned
  • detailed administrative arrangements will apply between ASNO and its counterpart organisation, setting out the procedures to apply in accounting for AONM
  • regular consultations on the operation of the agreement will be undertaken and
  • provision will be made for the removal of AONM in the event of a breach of the agreement.

Australia currently has 25 bilateral nuclear cooperation agreements in force, covering 43 countries plus Taiwan.12

Accounting for Australian uranium

Australia's bilateral partners holding AONM are required to maintain detailed records of transactions involving AONM. In addition, counterpart organisations in bilateral partner countries are required to submit regular reports, consent requests, transfer and receipt documentation to ASNO.

ASNO accounts for AONM on the basis of information and knowledge including:

  • reports from each bilateral partner
  • shipping and transfer documentation
  • calculations of process losses and nuclear consumption, and nuclear production
  • knowledge of the fuel cycle in each country
  • regular reconciliation and bilateral visits to counterparts
  • regular liaison with counterpart organisations and with industry and
  • IAEA safeguards activities and IAEA conclusions on each country.

Australia's uranium transhipment security policy

For states with which Australia does not have a bilateral nuclear cooperation agreement in force, but through which Australian uranium ore concentrates (UOC) are transhipped, there must be arrangements in place with such States to ensure the security of UOC during transhipment. If the State:

  • is a party to the Convention on the Physical Protection of Nuclear Material (CPPNM)
  • has a safeguards agreement and adopted the IAEA's Additional Protocol on strengthened safeguards
  • and acts in accordance with these agreements;

then arrangements on appropriate security can be set out in an instrument with less than treaty status.13 Any such arrangement of this kind would be subject to risk assessment of port security.

For States that do not meet the above requirements, treaty-level arrangements on appropriate security may instead be required.

Figure 3: Civil Nuclear Fuel Cycle

Uranium mining eventually produces uranium ore concentrates. Uranium ore concentrate is sent to a Conversion facility where it is further purified and into a suitable form for fuel fabrication (for reactors using natural uranium fuel) or uranium hexafluoride for low enriched fuel. The uranium hexafluoride is sent to an enrichment facility for Uranium Enrichment, from which the enriched uranium is sent to fuel fabrication and the depleted uranium, or tails, is sent to storage. Enriched or natural uranium (depending on the reactor type) is fabricated into fresh fuel in a Fuel Fabrication facility. The fresh fuel is then sent to a Power Reactor to Generate Electricity. Once the nuclear fuel has completed its useful time in the Power Reactor, the Spent Fuel is sent to Storage and Disposal as waste, or to a Reprocessing facility. Reprocessing separates out the uranium and plutonium that can be reused in new nuclear fuel from the fission products that were degrading the operation of the Power Reactor. The fission products are sent for Waste Disposal. Recovered uranium and plutonium is sent back to a Conversion to begin again the cycle of fabricating fuel for power reactors.

 

A characteristic of the nuclear fuel cycle is the international interdependence of facility operators and power utilities. It is unusual for a country to be entirely self-contained in the processing of uranium for civil use. Even in nuclear-weapon States, power utilities will often go to other countries seeking the most favourable terms for uranium processing and enrichment. It would not be unusual, for example, for a Japanese utility buying Australian uranium to have the uranium converted to uranium hexafluoride in Canada, enriched in France, fabricated into fuel in Japan and reprocessed in the United Kingdom.

The international flow of nuclear material means that nuclear materials are routinely mixed during processes such as conversion and enrichment, and as such cannot be separated by origin thereafter. Therefore, tracking of individual uranium atoms is impossible. Since nuclear material is fungible—that is, any given atom is the same as any other—a uranium exporter is able to ensure its exports do not contribute to military applications by applying safeguards obligations to the overall quantity of material it exports.

This practice of tracking quantities rather than atoms has led to the establishment of universal conventions for the industry, known as the principles of equivalence and proportionality. The equivalence principle provides that where AONM loses its separate identity because of process characteristics (e.g. mixing), an equivalent quantity of that material is designated as AONM. These equivalent quantities may be derived by calculation, measurement or from operating plant parameters. The equivalence principle does not permit substitution by a lower quality material. The proportionality principle provides that where AONM is mixed with other nuclear material and is then processed or irradiated, a corresponding proportion of the resulting material will be regarded as AONM.

4 Based on August 2017 world requirements of 65,014 tonnes UOC from the World Nuclear Association’s World Nuclear Power Reactors & Uranium Requirements (as of July 2019) –
http://world-nuclear.org/information-library/facts-and-figures/world-nuclear-power-reactors-and- uranium-requireme.aspx

5 Based on a comparison of GWe of nuclear electricity capacity and uranium required, for countries eligible to use AONM from the World Nuclear Association’s World Nuclear Power Reactors & Uranium Requirements (as of July 2019) – http://world-nuclear.org/information-library/facts-and-figures/world-nuclear-power-reactors-and-uranium-requireme.aspx

6 Based on Australia’s electricity generation in 2018 of 261.4051 TWh from the Bureau of Resources and Energy Economics, 2018 Australian Energy Statistics (published March 2019) – https://www.energy.gov.au/publications/australian-energy-statistics-table-o-electricity-generation-fuel-type-2017-18-and-2018

7 http://www.dmp.wa.gov.au/Uranium-1459.aspx

8 See Table 14

9 https://www.whitehouse.gov/presidential-actions/memorandum-effect-uranium-imports-national-security-establishment-united-states-nuclear-fuel-working-group/

10 On October 2012, the Australian Government announced that it would exempt India from its policy allowing supply of Australian uranium only to those States that are Parties to the NPT.

11 Australia has given reprocessing consent on a programmatic basis to EURATOM and Japan. Separated Australian-obligated plutonium is intended for blending with uranium into mixed oxide fuel (MOX) for further use for nuclear power generation.

12 Twenty-eight of the countries making up this total are European Union member states.

13 See page 26 of ASNO’s 2008-09 Annual Report for more details on the establishment of this policy.

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