Australia's Uranium Future

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"A deficit after 2012 is likely. . ."

Last week, Citigroup analysts released a report on the Australian uranium mining sector forecasting a new wave of growth ushered in by a mounting deficit in the global uranium market.

A deficit after 2012 is likely, said analysts, because the worldwide economic crisis has delayed new mine start-ups and expansion projects; in addition, amounts of uranium from secondary sources, such as the "megawatts for megatons" program, is decreasing.

Citigroup also predicts the uranium spot price will advance to $60 per pound, or higher depending upon further supply problems, in the next two years. As prices move and remain above $50 per pound, Citi expects new mine development and expansion projects to become more feasible for miners.

With the growing global demand for yellowcake, many Australian officials feel the nation should get more serious about its uranium mining sector. Mitch Hooke, the chief executive of Minerals Council of Australia, believes Australia could play a substantial role in the global nuclear power production. "This is one area where Australia is a significant producer," said Hooke.

The Australian Bureau of Agricultural and Resource Economics (ABARE) has said that approximately 64 nuclear power plants around the world will be brought online over the next six years. China alone is expected to construct around 20 plants in the next 10 years.

As demand for nuclear power heats up, Australia's uranium exports are likely to generate significant income for the nation. But what about the use of nuclear fuel in Australia, itself? All of the uranium mined in Australia is exported for use somewhere else.

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