UPDATE 1-Australia says Fukushima disaster won't curb uranium demand
* Australia expects to boost spending on uranium exploration
* Sees strong demand for yellowcake despite Japan's nuclear disaster
* Says world still needs growing nuclear power sources (Adds details)
By James Regan
SYDNEY, June 9 (Reuters) - Australia said the Fukushima nuclear disaster in Japan would not curb the world's appetite for uranium and predicted its exports will continue to rise as its develops more mines.
Spending on exploration in Australia to find more uranium is expected to rise by more than third this year, Australia's minister for mines, Martin Ferguson, said in a speech to geologists on Thursday.
Ferguson also said Australia was in discussions with the United Arab Emirates on a bilateral nuclear safeguards agreement that could potentially open up a new market for Australia's uranium.
"What Fukushima will not do is change the fundamental drivers, increasing population and increasing demand for energy, behind the desire by some nations for more nuclear power," Ferguson said.
Australia, with no nuclear power plants of its own, is one of the world's top exporters of uranium, along with Kazakhstan and Canada.
Ferguson said he was "confident the recent expansion we have seen in uranium mining, driven by increased global demand, will continue."
Plans for nuclear reactors have been put on hold worldwide in the wake of Japan's nuclear crisis, blurring the short term outlook for uranium, but the need for low-carbon energy supplies should keep demand for the metal burning for a long time.
"Let's not forget that there are over 400 reactors worldwide and while some of these have been shut down in recent months, the vast majority continue to operate," he said.
Uranium prices have fallen below $60 a pound since the March 11 earthquake and tsunami, losing a fifth from January's price of nearly $75, itself nearly half an all-time of $136 in 2007 UX-U3O8-SPT.
Government ministers and officials from nearly 30 nuclear energy producing countries this week called for safety tests on all reactors, after the disaster at Japan's Fukushima plant sparked concerns. [ID:nLDE7561K6]
The Fukushima disaster has driven nuclear energy up the political agenda especially in Europe, where public concern over the dangers of reactors is surging.
Countries within the European Union have already agreed to proceed with stress tests on the region's 143 reactors and the bloc has called for them to be carried out worldwide.
Germany's government decided last month to phase out all of the country's nuclear reactors by 2022 due to public opposition.
"Nuclear has always faced a tougher challenge than other energy sources, particularly when it comes to public perception and maintaining society's confidence to operate," Ferguson said
Despite its endowment in uranium, Australia holds barely a fifth of the global market, a legacy of the 1990s when political opposition and plunging prices combined to freeze exploration.
Even though the political climate for uranium mining has thawed, with the ruling Labor Party now no longer opposed to new uranium mines in states with existing mines, the industry remains a sensitive topic and still faces opposition from the influential Greens party at home.
BHP Billiton , Cameco , Rio Tinto and others are taking steps to dig new mines and expand old ones in hopes of capturing a forecast 20 percent leap in uranium consumption by 2015.
Meanwhile, places like Kazakhstan and parts of Africa are also racing to dig new lodes -- Kazakhstan's output alone is forecast to grow 10 percent next year, the same as Australia, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.
BHP's Yeelirrie deposit in northwest Australia is the country's second-biggest unmined uranium deposit after Rio Tinto's mothballed Jabiluka lode in the Northern Territory.
BHP wants to mine 90,000 tonnes of uranium from Yeelirrie over 30 years but has yet to break any ground.
BHP also owns the Olympic Dam mine in neighbouring South Australia, where it is planning a massive expansion to 19,000 tonnes a year from 4,000 tonnes now, but cannot say when that will proceed or how much it will cost.
Cameco has set a tentative start date sometime in 2015 for its Kintyre uranium mine, according to an invitation for public comment lodged with the Department of the Environment.
Nearby, Energy and Minerals Australia owns the Mulga Rock deposit, holding enough uranium to light up Tokyo for 30 years. (Editing by Ed Davies)
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