Uranium hitches ride on nuclear wave.

Investment in nuclear power is an investment in the environment. While this may not have been a generally accepted statement a quarter-century ago there has been a shift in thinking about the benefits of nuclear power and a noticeable change in the public's perception of the uranium industry.

"When you put it in the context of all major energy sources the entire life cycle of nuclear power, beginning with initial uranium exploration to the operation of a nuclear power plant, is second only to hydro electricity in terms of having the least environmental impact in the form of greenhouse gases," says Saskatchewan Mining Association Uranium Section Chairman Al Shpyth.

A turnaround in demand for nuclear power began in the late 1980s and the industry rose to the challenge. Nuclear power turned in a great performance in the United States during the 1990s as production increased by the equivalent of 23 reactors. In Canada and other countries, reactors are being retrofitted to meet supply needs and six new reactors are planned worldwide.

Greater investment in nuclear plants is an outgrowth of improved economics in nuclear power. The better the reactors and the better they perform, Shpyth says, the better for uranium.

Industry and government can each take a bow for the new attitude toward nuclear power, Shpyth says. The industry has been committed to safety while government-led deregulation has allowed well-run plants to get even better and become more responsive to the market. Greater regulatory stability and a focus on performance can go together to contribute to the bottom line.

"People are also realizing the benefits of nuclear power in clean air and the reduction of greenhouse gases," Shpyth says. "As for the byproducts of nuclear power, the industry has proven for over 40 years its ability to safely handle spent fuel. You have to remember nuclear power plants capture and control all of the fuel waste they produce."

Nuclear plant operators have been effective in managing waste and efforts to site material are ongoing. Shpyth notes 150 tonnes of uranium at a nuclear plant generates the same amount of electricity as 2.5 million tonnes of carbon dioxide-producing coal. While not taking a bias toward either method, he urges people to consider the scale of the challenge to each sector.

"The demand for electricity from a variety of sources will continue to grow," he predicts. "Even though the price of uranium is down, we do see consumption of our product growing."

Analysis of the industry in 2000 shows the spot price for uranium was lower due in part to inventory draw-downs on the world market. Absorbing a commodity price down by about 20 per cent from the previous year made for highs and lows in 2000.

"The reduced price is certainly a challenge for the industry," Shpyth says. "With prices where they are, Cameco Corporation decided to temporarily close the Rabbit Lake operation for one year beginning this summer. As well, the opening of Cigar Lake is now projected for 2005 with support of the market."

On the plus side the official opening of McArthur River was held in November of 2000 and the opening of the mill at McLean Lake marks the first new mill opening in North America since Key Lake began operation in 1983.

Another positive for Saskatchewan uranium has been the industry's ability to hold its share of the market even though no new sources of uranium have been found for more than a decade. Since the McArthur River discovery in 1988 the industry has spent about $450 million on exploration without another uranium strike.

"The reserves at McArthur River are larger than first expected," Shpyth says. "We're fortunate that our reserve here in Saskatchewan is quite good."

The province remains one of the top producers of uranium in the world. Its 27 per cent stake in the market places it slightly above Australia while another 20 per cent comes from African countries. Secondary uranium supplies also contribute to meet world demand.

"The Australians have an excellent one-of-a-kind deposit at Olympic Dam in the southern area of the continent. It's a mammoth deposit of minerals primarily known for copper but with a uranium project as a byproduct," Shpyth says. "Like Saskatchewan there is potential but their deposits haven't proven as rich as ours."

The uranium industry has invested more than $1 billion in Saskatchewan since 1995 and must generate $100 million cash every year to break even.

"The significant investment taken to develop the industry is evidence of our belief that the uranium industry is worthwhile and has a very bright future in Saskatchewan."