SYDNEY Revelations of more toxic leaks from Japan's Fukushima Daiichi nuclear power plant will raise second-thoughts about Japan's nuclear future, but won't halt the long-term global expansion of the industry, the head of a uranium mining company said.
"It reinvigorates the heightened state of nervousness, it surely will make the Japanese government and nuclear regulatory authorities more cautious and conservative in the decisions about the restart," said Vanessa Guthrie, managing director of Australia's Toro Energy Ltd (TOE.AX), which expects to start mining uranium in Australia in 2016.
Japan is set to raise the severity rating of the leak to level 3, or "serious incident", on an international scale for radiological releases, underlining a deepening sense of crisis at the site.
The price of uranium, used mainly as fuel for nuclear reactors, plunged after the March 2011 meltdown at the Fukushima plant 240 km (150 miles) from Tokyo and has struggled to recover ever since.
August uranium futures stood at $35.15 per pound on Wednesday compared with $68 per pound before the earthquake and tsunami that triggered the disaster.
However, Guthrie said contract prices between uranium miners and buyers standing at around $58-$59 a pound more accurately reflect the supply and demand balance than the spot price.
Operating costs in the industry range between $22-$25 per pound up to the high $40s, Guthrie said.
Canadian miner Uranium One Inc UUU.TO, which Russian nuclear corporation Rosatom plans to consolidate and take private this year, expects uranium prices to almost double in a couple of years amid dwindling supplies.
Toro is scheduled to start shipping uranium from its Wiluna mine under development by mid-2016. This week it acquired a second uranium project in Australia from Canada's Mega Uranium Ltd (MGA.TO).
Guthrie said longer-term projections continue to point to an undersupply of uranium as more nuclear power plants are commissioned, despite the events unfolding in Japan.
"I don't believe that this will delay or defer ongoing developments of the nuclear industry," Guthrie said. "For example, it will certainly not cause the Chinese to stop building new plants."
China has 28 nuclear reactors under construction and 17 in operation, according to the World Nuclear Association.
Additional reactors are planned, the association says, resulting in a four-fold increase in nuclear capacity by 2020.
In a statement faxed to Reuters, China's Foreign Ministry said it "hopes that the Japanese side can earnestly take effective steps to put an end to the negative impact of the after-effects of the Fukushima nuclear accident."
In contrast, since the disaster in 2011, Germany, Switzerland and Belgium decided to move away from nuclear power altogether in favor of renewable energy.
The last of Japan's 54 nuclear reactors was shut down in May 2012. Two reactors were restarted in June 2012, and Japan's governing Liberal Democratic Party wants all reactors reactivated if confirmed safe.
Still, some 50 countries continue to run and build reactors.
Guthrie expects supplies of uranium to tighten once 24 million pounds of secondary uranium is removed under the U.S.- Russian Megatons to Megawatts Program, which ends this year.
The program is a bilateral nonproliferation agreement to convert high-enriched uranium taken from dismantled Russian nuclear weapons into low-enriched-uranium for nuclear fuel.
(Reporting by James Regan; Editing by Richard Pullin)