Dubai-based Thani Emirates Resource Holdings is seeking to win three uranium mining concessions in the Middle East as part of an effort to exploit the growing demand for nuclear power globally and in the region.
The mining company, part of the privately owned Thani Group, has already won one concession in Africa and is pursuing another three outside of the Middle East, according to Abdulla Saeed al-Thani, Thani’s chairman.
“We expect all this to be signed within the next six months,” says Al-Thani.
Production of uranium yellowcake, or U3O8, should commence in five years, he added.
Uranium mining will be profitable in light of the burgeoning nuclear power generation industry, the company believes.
“Looking at the demand for energy, we thought that in comparison to alternative energies and fossil fuels, there is going to be demand for nuclear, which we have seen in the region,” says Rishard Camball, chief executive officer at Thani Emirates Resource Holdings.
China will be a key driver of demand, its massive energy needs translating into a strong pipeline for nuclear power plants.
Camball does not believe that the recent meltdown at the Fukushima plant in Japan will undermine the nuclear industry in the long term.
“It will soften the sector, but I dont think it will undermine the long-term strategy,” he says.
Experts predict a uranium supply shortfall, as surging demand is not covered by production.
“There are clear opportunities for junior mining houses and other investors interested in this sector,” says Chris Brown, partner at law firm Norton Rose, who has advised on uranium projects in Jordan.
Nuclear energy is becoming increasingly relevant to the region. The UAE has become the first GCC country to commit to nuclear power, with the first of four nuclear reactors coming online in 2017 in Abu Dhabi. Saudi Arabia, Kuwait and Jordan are studying the feasibility of developing a nuclear fleet, Iran is aiming to expand its nuclear power base.
So far, Jordan is the only country in the region with significant discoveries of uranium. Studies by the country’s Natural Resources Authority have placed the potential uranium reserves at 62,000 tonnes in 2007.
The development of uranium mining in the country suffered a setback when British-Australian Rio Tinto stopped exploration in the Wadi Sahra Abyad area last month after deciding that uranium deposits in the region are not viable commercially.
Last year, French energy giant Areva signed a contract with the Jordanian Nuclear Energy Commission to explore yellowcake deposits in Jordan. A Chinese firm is also exploring potential uranium reserves in the eastern edge of the Kingdom.
“They are looking to one or two other parties that are prospecting uranium in Jordan,” says a source involved in the negotiations between the Nuclear Energy Commission and Areva.