The tragic earthquake and tsunami in north-east Japan will have mixed impacts on mining in the Asia Pacific region. The uranium industry faces an uncertain future and a tough road following the Fukushima emergency while the coal and oil sectors will benefit with increased reliance on these more traditional energy sources.

The uncertainty created by the natural disaster has meant a bumpy ride for resources shares with an initial slump, followed by a number of good days, mixed with some more nervousness. A number of other mineral resources may also benefit during the reconstruction period.1

Despite the shocking nature of the tragedy, it has been the nuclear crisis at Fukushima that has created most of the bumps for share markets.

It is little surprise that the crisis dominated discussions at the Paydirt 2011 Uranium Conference in Adelaide, South Australia. Toro Energy's managing director Greg Hall told delegates that the current crisis needs to be kept in perspective, particularly in the long-term.

He said there is and will be some market impact from the events in Japan. “It is however, too early to determine the duration or tenor of those impacts in real terms.”

“The deaths and displacement from the quake and tsunami are horrendous. The nuclear reactor incidents are adding to the fear and confusion, but should be looked at in perspective with this incredible event.

“While some governments are initializing safety reviews, this does not alter the case for nuclear power as an energy source for the future. The upside is that once the incident is under control and stabilised, there will be learnings from it that can be applied to both existing reactor operations globally and in enhancements to current reactor management systems and plant design.”

Australian Uranium Association's chief executive officer Michael Angwin told delegates that the economic and other factors driving countries to use nuclear energy in preference to other forms of continuous electricity generation remain unchanged by the nuclear emergency. And although there will be a period of uncertainty as governments and reactor operators seek to learn the lessons of the Fukushima emergency, Australia’s uranium exports are not likely to be affected.

Michael Angwin said the Fukushima crisis will have created some public nervousness and might temporarily reduce confidence in nuclear energy. In that regard, he welcomed the initiative of some governments which had already announced audits of the safety of their nuclear power stations. He expected the results would demonstrate nuclear operators maintained very high safety standards and were well prepared for emergencies.

“The industry has an extraordinarily good safety record and will learn from any lessons that emerge and make improvements where necessary.” There were also likely to be broader inquiries looking at the design, construction, operating conditions and location of reactors, especially with regard to areas prone to seismic activity. It was not possible to predict what might emerge.

“Countries turn to nuclear energy because they wish to improve their energy security and expand their electricity generating capacity in a way that does not increase their carbon emissions. That remains the case today.”

While there is uncertainty in the uranium industry, coal looks set to be a beneficiary, particularly in the short term, and coal-rich nations like Indonesia, Australia and Mongolia are well positioned to capitalize on the increased demand that will follow.

While exports to Japan from Indonesia and Australia have been impacted now owing to damaged or closed power plants and infrastructure issues, China has been happy to accept extra shipments and Japan will need to increase its imports as the huge reconstruction effort begins.

There has also been damage to other plants and industries that rely on imported resources, including steel and nickel while the fact that business in parts of Japan is at a standstill will also mean a pause in demand for rare earths and an easing of rare earth price pressures, although overall global demand is likely to continue to outstrip supply for the next few years.

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