Uranium’s future tied to political events

Global uranium production is expected to remain below consumption for several more years as inventories are depleted, writes Nuexco, a uranium brokerage firm in the United States, in a recent monthly report.

Among producer nations, Canada is picked to remain on top, depending on what policy changes the Australian government makes. Canada produces about one-third of the world’s uranium.

Since the beginning of the nuclear power era, production of uranium always exceeded annual consumption. In 1985, however, the trend changed.

“Once inventory selling and inventory drawdown have run their course, additional production will be necessary to fulfill demand,” writes Nuexco, adding it believes “political developments will have the most impact on the distribution of production.”

The company lists a number of political uncertainties, including the proposed Canada-U.S. free trade agreement, harsher economic sanctions against South Africa, possible enrichment restrictions in the U.S. on foreign uranium, and Namibia’s possible independence (and the potential effect on 10% of global production).

For the period 1988-2000, Nuexco is forecasting total world uranium production of 1.6 billion lb U303 1/2O803 1/2 compared to a production capability of 1.8 billion lb.

In Australia, the governing Labor Party has signalled its intention to review its policies regarding uranium. Currently, Australia exports uranium only if it will be used as a fuel for nuclear power plants. Nuexco foresees annual production capability there of 14 million lb by the year 2000, again depending on governmental policy changes.

In Canada, the country’s two largest uranium producers, provincial agency Saskatchewan Mining Development and the federal government’s Eldorado Nuclear, are merging, which could have an impact on the market.

Canadian uranium is mined in two provinces, Saskatchewan and Ontario; Nuexco predicts annual western output to the year 2000 will double to 41.1 million lb, while in Ontario production will be halved during the same period. The country turned out a total of 32.3 million lb uranium in 1987.

Canada and Japan rate as the runaway producers of selenium, which along with tellurium may only be recovered as a byproduct in the refining of other elements, mainly copper and lead, with which they are normally geochemically associated, the Selenium-Tellurium Development Association informs us.

The organization, which is planning to sponsor an international symposium on the two minerals in May next year at Banff, Alta., reports the average annual non- Communist production is estimated to be about 1,500 tonnes selenium and 200 tonnes tellurium. Canada and Japan each produce about 500 tonnes of selenium annually, and the U.S. about 250 tonnes, while Japan, Europe and the United States each recover between 40 and 65 tonnes per year of tellurium.

Selenium, which during the First World War was used as a substitute for critically short manganese as a decolorizer in the glass industry, today has application in a variety of fields, including in agriculture as a feed additive; as an additive in chromium plating for corrosion protection; in the photocopying process; as a pigment in colors for ceramics, paints and plastics; and as a glass decolorizer.

Tellurium, too, has several applications, although about 80% of the mineral is consumed by the metallurgical industry, as a carbide stabilizing agent in the production of white cast iron and malleable iron castings and as an additive to low carbon steel and stainless steel, as well as copper to improve machinability. It is also added to lead alloys to improve corrosion resistance.

South of the border, William Bourke, chairman of Reynolds Metals, the aluminum company, in a speech to analysts in New York earlier this year, referred to the growing aluminum beverage can business in the United States where in 1987 more than 74 billion such cans were sold. Usage of the cans there is expected to exceed 79 billion cans this year. Bourke said his company’s share of the domestic aluminum can market is about 11%.

The International Monetary Fund (IMF) reports a drop in its non-fuel commodity price index in July from the previous month. The index, based on commodities such as food, beverages, agricultural raw materials and metals, slipped by 5% in U.S. dollar terms. (For the period February-June, the index had a cumulative rise of about 15%.) “The weakening of non-fuel commodity prices in July stemmed largely from a 13.6% decline in the dollar price s of minerals and metals — the sharpest monthly fall since the mid-1950s,” writes the IMF, adding that metals which rose in price rapidly during the first half of this year were the most affected.