Renowned resources and commodities investor Rick Rule believes Australia’s rich endowment of uranium has created wealth and revenues for many countries – except for Australia itself.
In an exclusive interview with Mining.com.au Executive Producer Shae Russell, the President and CEO of Rule Investment Media – who refers to himself as a private speculator – offers his perspectives into Australia’s raging nuclear power debate.
The legendary investor first offers a caveat that he’s “broadly pro-nuclear and broadly anti-government” before detailing his views on the inconsistent policies for uranium exploration and development and those of federal Labor’s anti-nuclear stance.
“Australia has a wonderful uranium endowment, both in terms of natural resources, but also in terms of human resources. It’s interesting that perhaps as a consequence of the ‘three mines policy’, Australian people, humans, professionals, have brought wealth and revenues to countries around the world, with the possible exception, of course, of Australia,” Rule tells this news service.
“It might be that Australian voters would like to deal with that inconsistency.”
Three-mine policy
In 1984, under Prime Minister Bob Hawke, the newly elected federal Labor Government introduced the infamous ‘three-mine policy’. This policy confined Australia’s uranium mining activities to the three sites already operational – Ranger, Nabarlek, and Olympic Dam with a moratorium on new mines opening.
This policy has meant uranium is the only mineral subject to varying policies in different states and territories.
Yet following decades of what many say is policy incertitude, Peter Dutton and the Coalition unveiled seven sites in five states where it proposes to build nuclear power stations should it come to power at the next federal election (to be held on or before 27 September 2025).
The plants would be government-owned with Dutton promising they would be operational by 2035-2037 – a timeline hotly contested and considered doubtful by some market commentators.
However, nuclear power is currently prohibited in Australia under federal law having been banned by the Coalition back in 1998 under John Howard.
Arithmetic ‘not adding up‘
As Rick Rule explains to Mining.com.au, Australia is one of the most important players in the global uranium market. The country has the world’s largest economic demonstrated resources of uranium (see map below) and in 2021 was the fourth largest producer of the silvery grey metal, according to Geoscience Australia.
The Olympic Dam mine in South Australia remains one of the world’s largest uranium deposits.
However, as no commercial nuclear power plants exist in Australia it has very limited domestic uranium requirements. As such, the country plays a pivotal role in fuelling the world’s nuclear power plants, “bringing wealth and revenues to countries around the world” except for itself.
This somewhat ambivalent approach is compounded by ‘inconsistencies’ of the Labor Party “with its expressed preference for a cleaner environment”, in which Rule ponders how the party “might be interested in a source of electrical generation that didn’t generate carbon”.
While policy and legislation remain ambiguous in Australia, Rule’s approach to investing has always been clear.
“I realised that the flavour du jour for carbon-free energy is alternatives, but the Labor Party might refresh themselves, refresh their memory with one statistic. We have, by we, I mean humankind, invested in excess of $5 trillion US dollars in the last 40 years in alternative energies to replace fossil fuels,” he explains.
“We’ve reduced the market share of fossil fuels from a high of 82% 40 years ago all the way down … to 81% today. That arithmetic is very, very inconvenient for opponents of nuclear power that have the sense that there should be less particulate pollution or less carbon pollution.”
GlobalData reports uranium production was estimated to be 54,000 tonnes in 2023. Production is expected to grow marginally at a CAGR of more than 4% from 2024 to 2030.
Rule and regulations
Rule’s hope is that uranium development in Australia takes place both in terms of building uranium mines, bringing with it employment and wealth, as well as creating a stable alternative for increasing the reliability and decreasing the price of power generation in Australia with environmental sensitivity.
However, the Coalition will have to navigate a tangled web of conflicting policies and often touted illogical minefield of legislation for nuclear energy to become a reality.
Presently, uranium exploration and mining are only permitted in South Australia, the Northern Territory, and Tasmania. Exploration is allowed in Queensland and New South Wales but mining uranium is not.
In 2008, Western Australia opened the door to allow mining for the silvery grey metal – but the State Government has implemented a ‘no uranium’ condition on future mining leases. Projects granted state ministerial approval by the former government will be allowed to progress. Yet there is a condition issued in which no future mining leases will be issued. Permitting is allowed but for only four previously approved projects to proceed in Western Australia.
Adding to these inconsistences, the Western Australian State Government prefers there is no uranium mining in the state, which also prohibits U3O8 exports through its ports with future production instead shipped via Darwin or Adelaide.
“You look at the success that Australian companies have enjoyed overseas looking for uranium, and you wonder what they might be able to do if they were allowed to look at home”
Ian Satchwell, an adjunct professor at the Sustainable Minerals Institute at the University of Queensland, and a senior fellow at the Australian Strategic Policy Institute shares the same sentiments as renowned investor Rick Rule.
In February 2024 Satchwell called for a national conversation on consistent policies under which could expand uranium production and help meet the global demand for materials that will help transition to a low carbon economy.
“This conversation must be underpinned by science and must acknowledge the negative global impacts of a ‘not in my back yard’ driven attitude,” he said at the time.
In May last year, mining magnate Tim Goyder told Mining.com.au he was a “uranium bull” and forecasted the sector would see further upside in the coming years. During July, this news service reported how juniors were fuelling a uranium run despite macroeconomic uncertainty.
Yet legendary investor Rick Rule retains clarity on what’s routinely considered a confusing, inconsistent, and somewhat inconvenient landscape for uranium and nuclear power.
“You look at the success that Australian companies have enjoyed overseas looking for uranium, and you wonder what they might be able to do if they were allowed to look at home.”
Rick Rule’s Investment Symposium is being held from 7-11 July 2024. Register here to be a part of it.
Write to Adam Orlando at Mining.com.au
Images: iStock & Geoscience Australia
