SA State may demand first pick of uranium

SA State may demand first pick of uranium
By: Reuters
Published: 22 Aug 07 - 17:47

South Africa may compel local miners to first offer uranium to the state to feed the country's expanding nuclear energy programme, a senior official said on Wednesday.

The government announced this month it would ramp up use of nuclear energy as it moves to meet fast-growing demand for power, using the country's large resources of uranium.

"The intervention in the uranium market (is necessary) ... there is no way we can have a situation where we battle for uranium, to get uranium ore, when our country is actually exporting," Tseliso Maqubela, chief director for nuclear energy at the department of minerals and energy, told legislators.

The enrichment programme, now biased towards reprocessing used fission material, was needed to power the country's nuclear plans, he said. These see nuclear power rising to 15 percent of total supply from the current 6 percent.

South Africa, one of the biggest producers of uranium, is building a multi-billion dollar new technology pebble bed modular reactor (PBMR), and has mooted building more conventional plants to add to its sole facility near Cape Town.

The move towards nuclear technology is driven by local concern over energy sustainability and by international worries over greenhouse gas emissions and climate change.

South Africa's ageing electricity power grid is already struggling to cope with demand, with main cities Johannesburg and Cape Town already suffering intermittent blackouts.

Maqubela said he expected opposition to the proposal to intervene in the market as the country planned to reserve uranium stocks and not allocate all mining rights.

"I believe that opposition is mainly driven by commercial interests...the profit margins are quite huge in as far as enrichment of uranium (is concerned), upwards of 50 percent," he said.

Maqubela added that mining companies such as Uranium One, Anglogold and First Uranium, were expected to significantly increase output to exploit soaring uranium prices. South Africa needed to position itself to take advantage of a global nuclear revival.

"There is a growing nuclear energy sector globally, and we need to tap into that market. We need to position South African industry to be able to play in that space," he said.

Source: http://www.miningweekly.co.za/article.php?a_id=115257