Modern Mining November 2022

NUCLEAR ENERGY

Power play: Bannerman weighs its options

Geopolitical tensions have put a spoke in the energy wheel, forcing countries to re-evalu ate their energy plans as European nations, who turned away from nuclear energy to gas following the Fukushima nuclear accident in 2011, battle an unprecedented energy crisis, as they bear the brunt of the Russia-Ukraine conflict. By Nelendhre Moodley.

T he conflict raises concerns about supply dis ruptions for energy and commodities, including uranium, which is used in power plants to generate electricity. This comes as countries around the world are considering using nuclear power plants to reduce their reliance on fossil fuels. Added to this, the effects of climate change are wreaking havoc across the globe, with world lead ers caught between a rock and a hard place as they ponder a mix of clean energy projects to ensure a sustainable future. Uranium mine developer, Bannerman Energy, which has its Etango-8 uranium project in Namibia lined up and ready, is watching and waiting to see how this clean energy enigma plays out. Will the energy crisis tempt consumers to return to nuclear with gusto or will there be a gradual incli nation towards the energy source? Bannerman CEO Brandon Munro believes that the energy mix will include all viable clean energy technologies with a greater emphasis on nuclear. “After hydropower, nuclear energy is the largest source of clean energy in the world, delivering 10% of the world’s electricity. In fact, it is responsible for more than half of the total amount of clean energy produced in the USA.” According to Munro, the case for nuclear energy remains strong, underpinned by the aggressive drive by China and Japan to develop nuclear power plants to meet their future energy needs. “China is currently accelerating its nuclear reactor build programme, and is progressing con struction of between six and eight nuclear power

plants each year with the intention of increasing this to ten power plants per year for the next 15 years. By the end of this decade, China will be the larg est single market for nuclear power, surpassing the USA. Japan is also making a play to accelerate the restart of the nuclear reactors that had been placed on care and maintenance following the Fukushima incident,” Munro explains. As new and existing markets increase their nuclear power ambitions, the long-term outlook for nuclear energy and, subsequently, demand for ura nium to power the nuclear plants, looks positive. Backing this notion is the International Atomic Energy Agency’s (IAEA’s) latest outlook for global nuclear capacity for electricity generation which sees the world nuclear generating capacity more than doubling to 873 gigawatts net electrical (GW(e)) by 2050, compared with current levels of around 390 GW(e). IAEA DG Rafael Mariano Grossi says that owing to the impacts of climate change and the current energy crisis, governments are reconsidering their portfolios in favour of nuclear power. A number of member states are revising their national energy policies, and strategising to extend the operation of existing reactors with plans in place for the construction of advanced reactors, including the development and deployment of small modular reactors (SMRs). Market fundamentals for uranium Uranium experienced a boom from 2005 until the Fukushima nuclear reactor incident in 2011, after which it entered a bear market and only began emerging from extremely low prices in the past 12 – 18 months. “In 2007, U 3 O 8 . traded at a high of $136/lb, soften ing to $74/lb and then sliding to a low of $18/lb at the depth of that bear market,” explains Munro, adding that one of the challenges for uranium producers, after the Fukushima tragedy, was their inability to reduce their production fast enough to contend with declining demand. “The declining market has finally turned. Excess inventory has been absorbed by financial investors and utilities are now buying to meet their consump tion needs. However, the supply side is still slow to respond after years of under-investment and numer ous political and environmental roadblocks in some countries,” says Munro. Today, we sit with a signifi cant sector deficit which is projected to continue till

Bannerman CEO, Brandon Munro.

CEO, Brandon Munro, on site at Etango-8.

20  MODERN MINING  November 2022