Argentina’s Nuclear Ambition to Enhance Long Term Uranium Demand

Argentina’s electric power generation currently employs uranium-based nuclear power generation for 6.8 percent of its capacity; however, the government expects that to rise to 21.1 percent by 2025. The goal is for nuclear power to be part of an expansion in generating capacity to meet rising demand.  Since 2003, Argentina has increased its total power generation capacity by about 30 percent to 24,000 megawatts.

Last Tuesday, Argentina began to discuss the potential of building its fourth nuclear power plant with China National Nuclear Corp. (CNNC).  Planning Minister Julio de Vido met with the head of CNNC, Mao Xiaming, to discuss the tender of construction contracts. They agreed that a Chinese delegation will travel to Argentina in August, while in September representatives from Argentina’s National Atomic Energy Commission (CNEA) will visit China.

In February 2010, the Argentine government signed an agreement with the Russian State Atomic Energy Corporation (Rosatom) to share technical information related to the construction of nuclear power plants and look at possibly using Russian technology in the country. In April 2010, a nuclear cooperation agreement was signed with Russia.

The government plans to select the builder of a 1,500-megawatt plant later this year, and the government has already identified three possible construction companies in addition to Rosatom: Atomic Energy of Canada Limited (AECL), France’s Areva SA (EPA: CEI), and Westinghouse.

Argentina’s Energy Department  expects the plant could come online in 2016-2017, while local press have reported it will cost more than $3 billion to build.  The country currently has two operating nuclear power plants with a third to be completed by the end of this year. The expectation for the third project is that it will generate about 700 megawatts to provide about 3 percent of Argentina’s total power output.  It was originally supposed to come online in 1987, but was stalled for 14 years because of political and economic obstacles. Industry analysts say that Argentina’s government run nuclear power industry is notorious for cost and time overruns.  The Argentine government recently suggested it may build a fifth nuclear power plant after completing the construction of its third and fourth nuclear plants.

Although Argentina’s atomic power program was largely suspended during the 1990s, nuclear research remained active. Argentina has some inactive uranium mines and the capacity to enrich uranium, process fuel rods, and produce the heavy water used in reactors.   Price caps and other policies have limited profit and led most companies to invest less in exploration and production, industry executives say.

Argentina’s Uranium Resources

Argentina’s uranium resources only total about 15,000 tonnes according to the most recent OECD redbook, although some analysts suggest the expansion of “exploration targets” might increase this potential to as much as 55,000 tonnes. Uranium exploration and a modest amount of mining were carried out during the mid-1950s, but due to lack of profitability the last mine closed in 1997. Cumulative national production until then from open pit and heap leaching at seven mines was 2,509 tonnes.

However, there are plans to reopen the Sierra Pintada mine (San Rafael) in Mendoza in the central west, which closed in1997. Combined reserves for this and at Cerro Solo in the south total less than 8000 tonnes.  In 2007, the CNEA reached an agreement with the Salta provincial government in the north of the country to reopen the Don Otto uranium mine, which intermittently operated from 1963 to 1981.

Australian-based Cauldron Energy Ltd holds leases over 16 km of outcropping uranium-copper mineralization at Rio Colorado, Catamarca province. This region was previously explored by CNEA during the 1950s and 1960s.

Uranium Spot Prices Stable

Both industry consultant UXC and TradeTech report no movement in the spot price for uranium from the previous week at $41.50 per pound. There was some new demand emerging this week with two US utilities seeking delivery for over 300 tonnes. Offers are due next week for one US utility seeking 260 tonnes for delivery in 2010.

With help from Assistant Editor Vivien Diniz