India doubles its Uranium reserves

Uranium ore

India's Atomic Energy Commission disclosed a new uranium discovery in Tummalapalle in Kadapa district, state of Andhra Pradesh, with reserves of 150.000 tonnes effectively doubles India's Uranium reserves.

India's nuclear energy programme is under-supplied and the new source is most welcome to keep it viable and limit its dependence from foreign suppliers. On the nuclear weapons front, India's pursuit of a nuclear triad is also increasing demand: soon the first of its Arihant class of nuclear-powered, nuclear-armed submarines will be operational, more will follow.

Clearly good news for India, but may yet prove to be a factor in global instability. India first nuclear weapon was designated PNE, for 'peaceful nuclear explosive', such irony may fail to make its neighbours smile.

Pakistan, although lacking indigenous uranium, may feel compelled to compete. With the country on an uncontrolled downward spiral, some in Islamabad may take less than reasonable decisions, and more seriously we are all wondering when will a Pakistani nuclear warhead reach the wrong hands. China too, may see this as a threat, specially in terms of projected power and rivalry in the oceans, though we shouldn't expect any actions from the People's Republic that defy either prudence or intelligence.

INS Arihant - Indian nuclear submarine under construction (based on the Soviet Akula class)

The Japanese find vast deposits of Rare Earths in the Pacific

With China enjoying a near monopoly over Rare Earths' production, news of alternative sources are very welcome.

The deposits we located following a survey by a team from the University of Tokyo. The Rare Earths are in the bottom of the Pacific, in international waters east and west of Hawaii, and east of French Polynesia, at depths of 3,500 to 6,000 metres.

However finding new reserves means nothing if their recovery costs are not competitive, as vast other sources exist on shore that are not being exploited (because both costs and environmental issues). Technology for recovery of such deposits is in its early stages, so cost are bound to be non-competitive with the prices offer by the People's Republic.

Anyway in a crisis situation, where like last year, China imposed a short lived embargo on Japan, alternative sources may be the only sources, so there is on more backstop solution.

Furthermore the scale of the discovery may be a game changer in terms of physical scarcity considerations: the University of Tokyo estimates these deposits to contain 80 to 100 billion tonnes of Rare Earths, while current viable reserves are about 110 billion tonnes (USGS). Nevertheless one major issue is still unclear: exactly which elements were found.

As time progresses we'll see how important this discovery will be, but as usual in Economics, the "crisis" will probably solve itself. Prices are rising, and less competitive mines will be competitive again entering the positive rents area. Molycorp is already restarting operations at the Mountain Pass mine in California, certainly others will follow. No physical scarcity is in sight!

table of rare earth elements

See this older post for more on rare earths.

Mining: 30% of exploration companies expected to close

Independent research organization the Fraser Institute has released its Survey of Mining Companies 2008/2009, based on the opinions of 658 mining executives and managers worldwide.

Economic slowdown led the vast majority of mining executives to expect a severe contraction in exploration activity, and at least 30 percent of exploration companies going out of business.

Udachnaya pipe open-pit diamond mine, Yakutia, Russia