GRT Article – Dragging the chain [reaction]:

Australia is seemingly lagging behind nations such as Mongolia in revisiting the economic and social benefit of its uranium resource as a means of developing nuclear power.
It is time to re-ignite the debate about Australia’s uranium industry and its use in nuclear power generation at a time when all options should be under review.

2 August 2023

By Ashley Hill and Amarzaya Gantumur


We are just going to say it… why isn’t Australia actively and openly discussing nuclear power generation as an alternative energy source? Fresh from the recent call by the Federal Opposition Leader, Peter Dutton, saying nuclear power is “[t]he only feasible and proven technology, which can firm up renewables and help us achieve the goals of clean, cost effective and consistent power…”,[1] one can only surmise that the historical risks of nuclear power generation and nuclear waste storage are so fear-invoking that the discussion of nuclear power is still off the table.

Chernobyl and Fukushima were undoubtedly horrific nuclear disasters; however, modern technological advances seem to have significantly mitigated or eradicated the risks that nuclear power posed. Nuclear physicists and/or technical experts in the field may well have an explanation as to whether there really is any realistic environmental risk of using small modular reactors on the sites of old coal-fired power plants, however, the first step should be to discuss their utility. At a time when Australia is actively exploring alternative means of power generation – e.g. solar panels now cover vast tracts of land and wind towers will soon stretch from the far south of the country all the way to Queensland – it makes sense that all options of modern power generation should be under review including nuclear power generation. After all, Australia is blessed with significant uranium resources and the ability to mine and process the ore suitable to use in nuclear power reactors and other nation-states are seriously re-entering the industry.

Australia should look to countries like Mongolia in terms of properly exploring nuclear as a viable option for modern power generation. Like Australia, Mongolia is a resource rich country and mineral resources make up the largest share of its exports. Mongolia is also blessed with uranium deposits. Mongolia is presently working with the French (nuclear power leaders) to develop its ability to export uranium for power generation. For example, the mining licence for the Mongolian Zuuvch Ovoo deposit is held by Badrakh Energy, a joint venture between Orano SA (French nuclear energy) (66%) and Mon-Atom (Mongolian SOE) (34%)[2]. Badrakh Energy has been using the in situ leaching (ISL) (also known as In Situ Recovery) process at the Zuuvch Ovoo deposit located in Dornogobi Province, Mongolia. ISL involves dissolving the uranium minerals into the leach solution which is then pumped to the surface for recovery.

The Mongolian government has set up a working group to negotiate an investment agreement with Orano for the Zuuvch Ovoo project. In an interview given to the Energy Intelligence publication in April 2023[3], the head of Orano’s mining business unit, Mr Nicolas Maes, said this will be the first operating uranium mine in Mongolia.

Today, virtually all uranium produced by the Central Asian countries, Kazakhstan and Uzbekistan included, and the majority of product in the United States, is produced by ISL. Proponents of the methodology cite little surface disturbance and generation of no tailings or waste rock as environmental benefits. The potential escape of solutions from the borefield and subsequent contamination of groundwater is a potential pitfall.

Mongolia is positioning itself as a uranium producer with the use of modern technology. It begs the question as to why Australia is so resistant to using our uranium reserves along with modern technology to generate nuclear power. For example, Australia has used ISL in the extraction of uranium at three different mines. The first one was used at the Beverley mine in South Australia which commenced operation in 2000 and then in Honeymoon ISL mine in South Australia in 2011. The third mine is the Four Miles lease where ISL mining commenced in 2014.[4] Can this modern means of mineral extraction become the first link in the vertical integration of nuclear power generation? According to the CSIRO[5], the answer is no.

As recently as May 2023, referring to the annual GenCost 2022-23 report that provides an updated cost estimate for large-scale electricity generation in Australia[6], the CSIRO have stated that nuclear power does not currently provide an economically competitive solution in Australia. Further, the lead author of GenCost and CSIRO energy economist, Paul Graham, says the main area of uncertainty with nuclear is around capital costs and there is a lack of robust real-world data around small modular reactors (SMRs) due to low global use.

The CSIRO opine that even using SMRs, the cost per megawatt hour of nuclear power still far outweighs the maximum cost of wind and solar energy per megawatt hour. CSIRO state that nuclear costs per megawatt hour are calculated by converting the hard infrastructure costs into annual loan repayments, adding other annual costs such as fuel and maintenance and then dividing that sum by the annual energy output.

However, any assertion that solar or wind power is cheaper than nuclear power from SMRs is not yet a certainty. Siemens Energy, one of the largest wind turbine manufacturers in the world recently lost nearly 40% of their share value after warning of quality problems in its wind turbine unit.  These problems, which the company warned would take years to fix, are believed not to be specific to Siemens, but rather sector wide. The problems impact wind capacity equivalent to 132 nuclear plants.[7] These problems will result in significantly lower reliability and longevity, and much higher maintenance costs than modelled, and will therefore raise the unit cost of power generation using this means.   

Any lack of data and information around SMRs should be alleviated when the International Atomic Energy Agency project (on the appraisal of the costs of nuclear SMR) is completed in December 2024. The Australian Nuclear Science and Technology Organisation (ANSTO) is a party to this project.[8]

Even so, any debate about the economic and social benefits of nuclear power in Australia remains stymied by the fact that nuclear power is currently not permitted by law, namely Commonwealth legislation, the Australian Radiation Protection and Nuclear Safety Act 1998 and the Environment Protection and Biodiversity Conservation Act 1999. Statute law prohibits the approval, licensing, construction, or operation of a nuclear plant. The legal hurdle along answers to questions around safe waste storage and location of reactors seemingly makes a nuclear power option “all too hard.”  However, it need not be the case.

If the primary argument against nuclear power in Australia is time and cost, then we should be having an informed debate on this point comparing nuclear power options with the cost of “renewable” energy sources. In 2017, the World Bank released a little-noticed report[9] that offered the first comprehensive look at this question. It models the increase in material extraction that would be required to build enough solar and wind utilities to produce an annual output of about 7 terawatts of electricity by 2050. That is enough to power roughly half of the global economy. By doubling the World Bank figures, it has been estimated what it will take to get all the way to zero emissions—and the results are staggering: 34 million metric tonnes of copper, 40 million tonnes of lead, 50 million tonnes of zinc, 162 million tonnes of aluminium and circa 4.8 billion tons of iron.[10]  Some six years later (and post-Covid), those estimated figures and the attendant costs are conceivably much greater.  For example, the need for new upgrading of electricity distribution for renewable sources keep rising and are now estimated to be in the tens of billions of dollars in Australia alone.[11]

The ‘clean energy’ challenge Australia faces warrants revisiting the question as to whether modern nuclear power stations can play a role as we move away from conventional coal or gas powered energy generation. Using modern technology and private enterprise to pick up the slack where government has failed, could offer Australia a proven technology to generate more than enough electricity for ourselves and potentially enough processed radioactive material to sell to neighbours.

If Australia can learn anything from Mongolia, it is that engaging with industry leading players from around the world may be a way for us to utilise the resources we have and set the benchmark for cleaner uranium mining and eventually cost-effective power generation.

From our perspective, especially around the necessary changes to the law in Australia, we think re-enlivening the debate about the uranium industry and use of nuclear energy for power is well overdue.

We will be watching with interest.

Ashley Hill and Amarzaya Gantumur are seasoned lawyers with extensive global experience. Notably, Amarzaya holds professional credentials in both Hong Kong and Australia, making Amarzaya eligible to practice law in these jurisdictions. Amarzaya serves on the arbitrator panel of the Mongolian International Arbitration Center (MIAC) and is fluent in Mongolian.

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Ashley has in excess of 23 years’ experience as a litigator and disputes lawyer. In his time at GRT Lawyers and working for top-tier Australian and global law firms (in the Middle-East and Singapore), Ashley has acted for clients across multiple continents on complex commercial litigation and international arbitration.

EXPERIENCE

Ashley’s current practice includes investment protection and dispute matters across a number of industry sectors including energy and resources, financial services, technology, agribusiness, tourism, in addition to contentious regulatory, insurance disputes and product liability matters.

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Ashley holds Bachelor Degrees in Law and Arts (University of New England) and he is:

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Scott is a founder and Director of GRT Lawyers and GRT Foundation and corporate lawyer. He leads a team of specialist legal professionals, providing advice to organisations of all sizes, from middle market, large corporates and government owned corporations.

Scott’s career spans more than 20 years as a corporate lawyer and has encompassed an in-house general counsel role, director of Statutory Authorities and corporate legal adviser to managing directors, chief financial officers and boards of directors of ASX listed companies.

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After building GRT Lawyers into a high-quality law firm, and together with his wife Eliza, establishing the GRT Foundation into a sustainable Australian charity, Glenn built GRT App (a subsidiary of GRT Lawyers) and sold that to an ASX listed company. Glenn was the first chairperson of any Australian ASX listed company to successfully chair a real-time virtual meeting of shareholders. He is still today, the only person who has chaired a real-time virtual shareholders meeting for an ASX listed company.

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