Yellowcake Fever: The economic myths of the uranium export industry

Jim Green

In the mid-2000s, uranium was the ‘new black’ as The Bulletin put it and investors could take their pick in this “radioactive heaven”. The number of listed uranium juniors doubled and doubled again … and again and again. A company sent radioactive drill samples for assay and quickly became the most traded stock on the ASX (leading to a suspension of share trading).

Residents of the small Pacific Island Niue were surprised to learn from an Australian company that they might be sitting on 10% of the world’s uranium, and surprised again when the project was abandoned two months later − easy come, easy go. The uranium spot price increased ten-fold and more, peaking at US$138/lb in June 2007.

Michael Angwin, the Australian Uranium Association’s Executive Director, said in 2008 that Australia “has enough reserves to be to uranium what Saudi Arabia is to oil”. Only a pedant would note that Saudi oil generates 466 times as much revenue as Australian uranium (and that most of ‘our’ uranium revenue never comes anywhere near Australia because of the high level of foreign ownership). Politicians from the major parties have been only too happy to regurgitate uranium industry propaganda − for example former SA politicians Mike Rann and Kevin Foley have made the comparison with Saudi oil.

The Australian Securities and Investments Commission could hold uranium miners and wannabes to account for peddling misinformation − but it doesn’t. Business journalists could hold the uranium industry to account − but they usually don’t. Claims that nuclear power growth in China, India and Russia will drive huge increases in uranium exports are routinely and uncritically regurgitated yet they don’t withstand the simplest calculations. For example it is routinely claimed that uranium sales to Russia will generate $1 billion annually − but Australia would need to supply entire Russian demand twice over to generate that amount of export revenue.

Milk and cream generate almost twice as much revenue as uranium − so where are the newspaper puff-pieces with pithy headlines about corporate moovers and shakers; where the ponderous weekend think-pieces about how the nation that once rode on a sheep’s back is now attached to a cow’s udder? Why isn’t milk the ‘new black’?

Nincompoops in academia and journalism

We could turn to academia for some common sense. There we find Prof. George Dracoulis − a member of the 2006 Switkowski Panel − wondering aloud whether uranium will “make or break Australia as an exporter”. Hardly − Australia could supply entire world demand and uranium would account for just 3% of national export revenue and it would still fall short of iron ore export revenue by a factor of 6.5. There we find Prof. Barry Brook insisting that there was no credible risk of a serious accident at Fukushima even as nuclear meltdown was in full swing − his follow-up act is a prediction of a four-fold expansion of uranium exports. And there we find Ian Plimer and Haydon Manning drawing comparisons between Australian uranium and Saudi oil.

Even with the uranium price tanking in the wake of the Fukushima disaster, the Global Financial Crisis, and the failure of the nuclear ‘renaissance’ to materialise, journalists are still reading from the same script. Significant, protracted price falls are met with predictions that the market will soon turn. A November 2012 article in The Australian, titled ‘Yellowcake starts to glow again’, speculated that the uranium price may be close to bottoming.

A March 2012 report by the federal government’s Bureau of Resources and Energy Economics predicted a near three-fold increase in uranium exports by 2016/17 and The Australian responded with an article titled ‘Global uranium demand expected to skyrocket’.

So how has the media responded to the further decline in the uranium sector over the past year? The short answer is that the media hasn’t responded at all. In March 2013, Bureau of Resources and Energy Economics reduced its mid-term forecast for uranium revenue by nearly half, and the media was silent.

The Australian Conservation Foundation released a detailed, factual report on April 26 exposing the uranium industry’s economic misinformation, and the media was silent. The ACF report finds that uranium accounted for just 0.29 per cent of Australia’s export revenue in the 10 years from 2002−2011. In the 2011/12 financial year, uranium revenue of $607 million was four times lower than Australia’s 20th biggest export earner, eight times lower than Australia’s 10th biggest export earner and 103 times lower than the biggest earner, iron ore.

By the highest estimate, uranium mining and exploration accounts for 1,760 jobs in Australia − just 0.015 per cent of all jobs. The Australian Uranium Association claims the industry is a “significant employer of First Australians” but in fact it provides just one job for every 3,000 Indigenous Australians.

The bottom line is that when the industry has some ‘good’ news to spruik, it will surely be amplified by dullard politicians, academics, industry ‘analysts’ and Paul Howes, and it will surely be regurgitated by sections of the media. But if you’ve got a story about industry stagnation and decline, forget it. If it’s not good news, it’s not news.


Simple facts are easily dismissed by talking up the ‘potential’ of the industry. But as Richard Leaver from Flinders University notes: “‘Potential’ is one of the most powerful chemicals available to the political alchemist. Any individual, firm, or sector deemed to have potential is relieved of a massive and perpetual burden − the need to account for past and present achievements (or, more probably, the lack of them). … The history of Australian involvement in the civil uranium industry offers an excellent example of this alchemy at work.”

There are real-world consequences to yellowcake fever − many ‘mum and dad’ investors have been burnt. That problem was most acute during the speculative price bubble in the mid-2000s when small investors were spending big on penny dreadfuls while at least three major utilities were selling shares in Rio Tinto-controlled Energy Resources of Australia. As Tim Treadgold wrote in the West Australian in 2005, “smart money” was selling “while less clued-up people continue to buy uranium penny dreadfuls rather than do something sensible, like bet the house (the wife and the kids) on the horse carrying the jockey wearing pink polka dots in the fourth at Ascot next Saturday.”

There is another problem associated with yellowcake fever. A sober assessment of the economics benefits and the problems and risks associated with the uranium industry is required, but there’s precious little chance of that when the economic benefits are grossly overstated (and amplified and regurgitated) and contrary facts are ignored.

Perhaps the worm will turn after a few more years of industry stagnation. Already there’s plenty for a contrarian journalist to hang a story on. BHP Billiton, for example, has not only cancelled the planned expansion of Olympic Dam but has also disbanded its Uranium Division and sold the Yeelirrie uranium lease in Western Australia for just 11% of the nominal value of the resource.

Also indicative of the state of the industry was Cameco’s announcement in February of a $162.5 million write-down on the Kintyre project in Western Australia. Just months after first production at the Honeymoon mine in north-east SA in September 2011, project partner Mitsui announced its decision to withdraw as it “could not foresee sufficient economic return from the project.”

Jim Green is the national nuclear campaigner with Friends of the Earth and co-author of the ACF report, ‘Yellowcake Fever: Exposing the Uranium Industry’s Economic Myths’, posted at