MOSCOW (Rumining.info) -- According to Russia’s Energetic Strategy through 2020 (herein referred to as Energetic Strategy) approved by the Russian government, Russia aims to increase atomic energy production from 16% to 23% with an increase in electricity generation at APP from 130 to 230-300 billion KW/h a year.
In June 2006, Vladimir V.Putin, President of the Russian Federation, suggested an even higher value at 25%.
Officially the Russia’s mineral resources base of uranium is estimated at a sufficiently impressive value of over 600,000 tonnes of reserves and 830,000 tonnes of predicted resources.
However, the specified figure of reserves includes those with production costs of up to $80 a kilogram and even more, but it is probable that only objects with the cost below that level will be attractive for the investor in the foreseeable future. Evaluating possibilities of extraction more “expensive” reserves should be excluded from consideration.
As for predicted resources, the quoted estimate is a highly conventional value as far as resources of P3 category are prevalent in their structure. Analogous resources as per a number of foreign classifications are figuratively referred to as “speculative.”
It is thought that subject to the relevant investment the output of uranium production of about 16,000 tonnes a year will be possible on the basis of established reserves by 2020.
Such level of annual production was in general maintained for the USSR in the end of 1980s (pic. 1) with parallel operation of seven large integrated works.
To date only one of that number of enterprises remain functional in Russia: the Priargunskoye Mining and Chemical Association at the moment. Another two enterprises – CJSC Dlur and OJSC Khiagda – are under construction. All these manufactures are assumed to ensure the annual output of uranium production to the extent of 8000-9000 tonnes by 2020. It is proposed to obtain as much again due to the establishment of new enterprises in deposits included in the reserve subsurface mineral fund and on new objects but not open yet as well. (pic. 2)
OJSC Priargunskoye Mining and Chemical Association, which has been operating since the end of 1960s, carries out uranium mining by excavation method. In the 1970s this enterprise was one of the largest in the world. Nevertheless its output has lowered by the 1990s in view of the depletion of reserves fit for strip mining.
The raw material base of the enterprise represents a group of adjacent deposits of the so-called Streltsovsky uranium ore district. They are referred to vein type deposits and are enclosed within the large paleovolcanic structure, the Streltsovskaya caldera. The total number of different by scale deposits is 15.
As is clear from the diagram, the reserves of the majority of large deposits in the district more or less exposed to processing. Only one among the large deposits, the Argunskoye deposit that embodies about 15% of total initial reserves of the entire district, remains in reserve as yet. Its bringing into service will take place prior to 2010. The resources of Tulukuevskoye and Luchistoye deposits have been depleted almost completely. Resources of Streltsovskoye, Antaeus, Oktyabrskoye and Yubileynoye deposits have been used to the extent of 25%-45 % of initial reserves. Except for the Argunskoye deposit, the Malo-Tulukuevskoye, Dalnee, Zherlovoye and Pyatiletnee deposits are practically intact by processing. However, all these objects are comparatively small, characterized by leaner ores and located (the Zherlovoye deposit excluded) separately, out of the boundaries of mine fields of operating pits.
Total amount of residual reserves bedded in the Streltsovsky district as of 2005 was approximately150,000 tonnes. However, growth potential of the mineral production is defined by not only and even not so much the quantity of residual reserves as their quality. In the period from the early 1990s until recently the enterprise had functioned in survival conditions since the government ceased purchasing uranium and prices in the world market remained stably low. It managed to withstand owing to the transition to a selective developing of high grade ores. Starting from the early 90s to 2003, the average content in consumable reserves here raised steadily (pic. 3), and by 2000 its excess over the content in the subsoil reached the level of 2.5 times.
Thus, the existing raw material base was substantially undermined. The average content in the residual reserves came down now to 0.16% against 0.25% to the moment when developing started – that is by 36%. The reserves of proper high grade ore were found considerably exhausted. It cannot be ruled out that a certain part of residual reserves is practically unrecoverable for engineering or economic reasons.
In 2004 the output of the enterprise was 3100 tonnes of uranium. The prospects for an increase in production are first connected with the opening of the Argunskoye deposit. Thick (tens of metres) beds of this deposit, subject to a quite high quality of the ores at it, will probably allow a mine with output of about 1000 tonnes of uranium a year, making it possible to increase the general level of production of the enterprise up to 4000-5000 tonnes. However, by 2015 the reserves of ores of the best quality and relation at operating now deposits and mainly at the unique deposit of Antaeus, will become exhausted by 50%-70%, and this may condition decline in output.
CJSC Dalur performs the production of uranium by borehole underground leaching. The raw material base of the enterprise is the Dalmatovskoye deposit the reserves of which come to about 11,000 tonnes in all. Designed capacity of the enterprise has been evaluated at 500 tonnes a year. In 2005 the output came to about 100 tonnes.
There are another two known deposits in the district – Khokhlovskoye and Dobrovolnoye, which are still under evaluation; nevertheless their scale is identical to that of the Dalmatovsky deposit. In the long view another two analogous production units are assumed to be set up on their basis and the aggregate capacity of the enterprise will run up to 1000 tonnes a year. However, subsoil plots of which it is composed will be brought into operation sequentially, and by the moment where the last plot becomes effective, the first one will occur at the stage of its abandonment.
Thus, the enterprise will be able to maintain the maximum output of 1000 tonnes per annum only for a limited period of time and its average annual production won’t surpass 500-700 tonnes by 2020. And it’s unlikely be possible to reach the maximum level prior to 2015.
It is worth mentioning that conditions of the establishment of enterprises in this district are auspicious in general: a featureless forest-steppe landscape, the presence of motor roads and free man power. Ecology in the district is also favourable: layers including deposits are surely isolated from the surface by a thick depth of water-resistant argillaceous sediments. Underground waters of ore bearing horizons have no economic value.
Meanwhile the concentration of completion fluids at the Dalmatovskoye deposit is for the time being below the designed one and production cost and a probable density of metal recovery have not yet been evaluated. If this rates turn out to be worse than the designed one, the level of output of the enterprise may be even lower.
OJSC “Khiagda” carries out uranium production by underground leaching and is still considered as pilot facility. Approximately 20 tonnes of uranium were produced here in 2005.
The enterprise’s raw material base represents a group of deposits of the Vitimsky uranium raw district. Total reserves of this district are quite large (over 40,000 tonnes) and have not completely been estimated as yet. However these reserves are dispersed at numerous deposits - buried paleovalleys of an ancient river network. Every such paleovalley contains as a rule one ribbon-like ore deposit of first hundred metres wide and first kilometres long. Ore bearing paleovalleys are spaced at a distance of 3-5 up to 10 kilometres and even more. But reserves of a single paleovalley do not usually surpass 1000-3000 tonnes of uranium.
At present, a licensed site of subsoil use is the Khiagdinskoye deposit to which four contiguous paleovalleys have been attributed, but exploitation work is conducting at only one of them. The deposit reserves are estimated at 10,000 tonnes. Positive features of the deposits of the Vitimsky district are relatively small depth of ore occurrence (150-200 metres) and higher productivity than at the Dalmatovskoye deposit.
However natural environment of the district is far more difficult. The district is characterized by continuous taiga coverage, partial bogginess, and severe climate with long periods of heavy frosts and permafrost. The distance to the nearest railway station (Chita) is over 300 kilometres. The deposits are situated on the opposite bank of the Vitim river, which it is possible to get across by ferry-boat.
OJSC Khiagda is assumed to ensure the output of 1000-2000 tonnes of uranium a year. But the nature of the raw material base is such as the same level of output may only be obtained by parallel operating of not less than 4-6 production units at several objects (paleovalleys). Set up and maintenance of stable functioning of such disconnected units in inclement environment of the district will be extremely difficult. Besides, in much the same way as in CJSC Dalur, the introduction of production facilities will inevitably be carried out in a gradual manner, and their abandonment because of the limited reserves of separate paleovalleys will occur relatively rapidly. That’s why the average number of concurrently operating units will hardly be more than 3-4, making it possible to achieve here a total output of 1000-1500 tonnes at the most.
As appears from the foregoing the evaluation of production opportunities of enterprises that exist nowadays with regard to uranium production at 8000 tonnes seems too much optimistic. A feasible overall volume of production on them will not probably be more than 7000 tonnes, and will come to 5000 tonnes on average for a period of 2005-2020. At the same time it is probable that total production decline will start after 2020 due to the reserve depletion in the Streltsovsky and Uralsky districts.
Among the sites of unallocated reserve fund the largest one is the Elkonsky uranium ore district located in the Republic of Sakha(Yakutia). The main deposit of this district, Yuzhnoye, has reserves of over 240,000 tonnes, but raw material potential of the Elkonsky district is evaluated at about 600,000 tonnes, i.e. exceeds the reserves of the Streltsovsky district almost in 4 times.
However the ores here are comparatively lean: average content of uranium in them is only 0.14%, that is 13% lower than in residual reserves of the Streltsovsky district. Negative aspects of deposits of the Elkonsky district are also the need to mine them by subsurface method exceptionally, and relatively small depth of the ore bodies (2-5 m). The output of 6000 tonnes of uranium a year is assumed to be possible by 2020.
The analysis of materials on the world’s operational underground uranium deposits shows that their productivity is characterized by a logarithmic dependence of the content of uranium in ores (pic. 4).
The production output of all the mines operated on ores containing less than 0.2% does not exceed 500-700 tonnes a year. To ensure a production volume of 6000 tonnes of uranium in the Elkonsky district it will be necessary to provide for 8-12 large ore mines to be operated in parallel, the task that is scarcely feasible from a technical point of view. Even the construction of a complex with production output of 3000 tonnes a year will be a very difficult engineering mission. It’s obvious that this value must be constraint for the evaluation of mining opportunities in this district.
Among other reserve deposits the Orlovskoye, Imskoye, Gornoye, Vitlausskoye and some other ones are considered as potential sources of uranium. It is assumed that a few more enterprises with total annual productivity of 1000-1500 tonnes may be established on their basis by 2020.
It is known that deposits that fit entirely or partially for a strip mining may be of the highest interest for the quick launching of mining industry productions. Among the abovementioned the Vitlausskoye deposit only and possibly the Orlovskoye to some extent pertain to them.
The Vitlausskoye deposit is represented by sub-horizontal banks of loose sand ores having thin overburden. However, the reserves of this site are not great, and this won’t allow it being used as a basis for a large-scale and long-term enterprise. The Orlovskoye deposit may be exhausted by open-pit only in part, and the ore quality here is low (content of about 0.09%). It is hardly possible to set up a large enterprise here as well.
The largest reserves (of about 50,000 tonnes) within this group are characteristic for the Imskoye deposit. However, these reserves are dispersed on a great number of small ore bodies, affected by post-ore tectonics, and the content of uranium in them is too small (0.05%-0.07 %). In its time the experience of underground ore leaching with mud drainage to subsoil waste was successfully applied at the deposit. Even using such technique its reserves were referred to off-balance ones as far back as in the 1970s. In spite of the advance of prices for uranium this qualification will hardly change in the nearest future.
The Gornoye deposit is also suitable for exhausting through underground leaching with an open cut mining method. Ores are substantially richer here but they are bedded in the form of narrow veins and nests that will also limit the production capacity. The deposit’s reserves aren’t relatively large (10,000 tonnes), evaluated preliminary, and it will be necessary to combine their exploration with exploitation involving thus an increase in investment risk.
Other reserve deposits are even worse by specification. It is highly questionable that they will be callable at all prior to 2020. Therefore, the estimate of the mining capacity in this part of the subsoil reserve fund of 1000-1500 tonnes seems also to be overstated.
Nevertheless during the period until the year 2020 subject to a sufficiently intensive development of the mining capacity of enterprises in operation in Russia approximately 100,000 tonnes of uranium may be produced on its own material base, and the annual output in 2020 may come to 9000-10,000 tonnes but in no way to 16,000 tonnes (table 1).
Table 1. Dynamics of uranium mining at enterprises both operating and scheduled to be built for the period till the year 2020
By analyzing a Russia’s real demand for this energy carrier it is possible to make a conclusion on that the national raw material base in principle is likely to ensure the production of uranium to such extent as necessary for the projected development of the energy industry (table 2).
Table 2. Rated demand of Russian APP taking in consideration of development pace put in the Energetic strategy
Russia’s needs for uranium does not meet its demand for atomic energy since Russia is one of the largest exporters of nuclear fuel, keeping hold of about 40% (!) of the world’s market. Meanwhile, high-technology products, namely fuel assemblies and LEU, are mainly exported, which is extremely advantageous.
In view of export, Russia’s demand for uranium came to about 17,000 tonnes as early as in 2005 while its own primary industry produced 3200 tonnes. The deficit was covered by import (uranium as give-and-take raw material, supplies of tails and procurement of natural uranium) as well as from secondary sources including storage reserves.
If we assume that export appetites will come down proportionally to an increase in the needs of the own energy industry, i.e. the total demand will be practically stabilized up-to-date, then the cumulated demand for uranium will come to about 260,000 tonnes by 2020 and will be 2.5 times larger than the capacity of the primary industry on its own base.
The accumulated deficit calculated, subject to its own production, secondary production volume and import volume increase, generally, owing to the supply of uranium by joint mining enterprises the establishment of which is planned on the territory of Kazakhstan and Uzbekistan, will run up to 60,000-70,000 tonnes.
It seems impossible to eliminate this gap via further stimulation of the output (including on the basis of foreign sources), since it is necessary as early as in 2010 to engage additional facilities producing 6000 tonnes, and therefore this is more than twice as much as those provided for in the above computations. Even if we don’t take technical difficulties and matters of funding into consideration, and proceed solely from availability of reserves, then we’ll be simply short of time to put such additional facilities in operation. Their creation should be started five years ago, but no active effort is undertaken in this direction so far.
By the same reason the possibilities of uranium production in the country for the period to the year 2020 will hardly be improved by new geological discoveries. Given the time for evaluation, exploration and development of deposits that lie in wait for us, the appearance on the market of the products of newly established enterprises may be expected only after 2020.
It is obvious that the uranium shortage to 2020 will have to be eliminated either by import development, that is, in essence, export limitation only to the service on isotope enrichment and fuel preparation, or by the further reduction in export supply.
But it is necessary to delve into another important aspect of the problem of development of uranium production in Russia. The domestic market of this product is peculiar: the single consumer on it is the TVEL corporation, while all manufacturers belong to the very structure. The prices at which the corporation purchases uranium from its producing enterprises stand too far from the world market ones. Thus, CJSC “Priargunskoye Mining and Chemical Association was receiving $32 for one kilogram of its uranium during 2005, while the world price ran up to $92 per kilo. Therefore, on the evaluation of the promising development of national reserve deposits, and of the completeness of subsoil use at the operating sites it is necessary to have in view that the ongoing increase in world’s market price won’t make here such positive impact as it may produce in the world, provided that the conditions of the Russia’s uranium market won’t be fundamentally modified.
In general, a substantial development of uranium producing facilities in Russia seems to be impossible without participation in the natural uranium market of major companies that operate on the markets of other fuel-energy and metallurgical raw materials. However, today there are some effective regulations that put obstacles in this way.
The scope of production of natural uranium in the country is regulated by the effective Federal laws, namely “On nuclear energy uses” and “On subsoil.” In such parts as related to the natural nuclear raw material these laws turned out to be inconsistent with each other.
For instance, the RF law “On subsoil” assigns the right of ownership for produced raw material to the subsoil user, with no exception made with regard to the ores of nuclear raw material and primary processing products. Whereas the law “On nuclear energy uses” provides for any nuclear material to be in the federal property only with no exception made as well for such ores and the products of their processing. Consequently, one of these two laws doesn’t forbid the functioning in Russia of uranium producing enterprises of non-governmental form of property and the other in fact prohibit their activity.
All this looks even more absurd if we take into account the fact that all the uranium-mining enterprises operating now in the country and even the enterprises of nuclear fuel preparation have already become joint-stock companies long ago, although with participation of official capital.
This conflict of laws must be settled as soon as possible.
The development of a normal market of natural uranium in Russia could be also influenced by a resolution of the government on its procurement from producers for the purpose of replenishment of the State fund, which has been consumed for meeting export demand during the previous years.
Nowadays uranium, in general, begins to take on the properties of means of hoarding, serving as currency exchange material in some way. Uranium storage renewal may become one more, and more effective, deposit of the stabilization fund. Retaining the role of one of the largest depositaries of this important energy carrier, Russia will be able to have substantial control on its pricing as goods.
The foregoing considerations as to the uranium needs and production in Russia may at the first sight appear to be evidence of the lack of acuteness with regard to the further development of uranium raw material base of the country. But it is not the case. By implementing mining stimulation projects by 2020 Russia will reduce the known uranium reserves in subsoil by approximately 100,000 tonnes. The lion’s share of this quantity will be mined from the subsoil of the Streltsovsky district, the residual reserves of which will be reduced by 60%-70%.
At the same time their quality will become even worse and the uranium production cost will rise. Reserve provision of the effective production on the basis of the Streltsovsky district will shorten to 7-8 years. Consequently, during the period of 2020-2030 Russia with its developed APP capacity may loose the most important source of uranium raw material, having nothing to replace it with, if a new uranium ore district is not found having reserves that make it possible to serve as such substitute.
The detection of a new large potential source of uranium raw material should be considered as the most important strategic mission assigned to the geological service of Russia. Earlier the resolution of this task was classified as difficult. A 15-year period for this is a quite short term. The level of budget investments in exploration work with regard to uranium remains so far evidently insufficient.
At the same time the general policy of the state authorities in the field of development of the raw material base of uranium remains unclear. Thus, Sergey V.Kirienko, head of the Federal Atomic Energy Agency, stated an agreement reached with Russia’s MNR on “ten times increase in cost for additional prospecting and exploration of natural uranium reserves….”
Nevertheless, under current terms this increase will require the opening of new missions with the relevant holding of tenders, execution of design and estimate documentation, work authorizations that will take in fact 1.5-2 years. Until now, no official instruction on this subject has been received by executing agencies from the Rosnedra.
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