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Posted on 20 July 2011
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The $14m haze over India’s mega uranium discovery

Despite the major find at Cudappah India’s goal to produce 20,000 MW nuclear power by 2020 remains a distant dream

Arpit Parashar
New Delhi

The announcement of a major discovery of uranium deposits in the Cudappah region of Andhra Pradesh just before the visit of US Secretary of State Hillary Clinton is important. It is meant to tell the US that India might not budge on the clauses on which the strategic nuclear deal is stuck.

The timing of the announcement is important because, say sources in the know, it may not be entirely accurate. India is nowhere near its target of producing 20,000 mw of electricity by 2020. And the US has a sense of this. Mining the metal at the Tummalapalli village belt in Cudappah would translate into electricity at a very high price as the quality of the newly-found ore is one of the poorest in the world. It promises a good yield only in terms of quantity.

AK Rai, Director of the southern region of the Atomic Minerals Division of the Department of Atomic Energy (DAE) was not available for comments despite repeated attempts.

According to DAE data, the ore extracted from Jaduguda in Jharkhand is of 0.065 grade, while the one discovered at Cudappah is of 0.045 grade. This means an extractor would need to mine 1,000 kg of ore to get 65 gram of usable uranium at Jaduguda, while at Cudappah he would get only 45 gram.

Sources in DAE said the exploration in Cudappah was put on hold after an initial find close to 17,000 tonne in 1995-1996. It was restarted in 2007 around the time when the negotiations between the US and India were on. This was part of a larger goal to make a strong case for India and show it does not have to wholly depend on the US for its goal of achieving the 2020 target.

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The department has been under tremendous pressure since 2007 to establish uranium ore deposits in India. The success rate has been good since there have been substantial discoveries in Karnataka, Meghalaya and Andhra Pradesh. But the problem is the poor quality, according to sources. Even quantity-wise they cannot help meet the 2020 target.

In India, an average of 10 tonne of uranium is required to produce one megawatt of electricity, after including the wastage during mining and extraction processes. Going by this assessment, DAE secretary Srikumar Banerjee’s announcement that India’s total estimated reserves stand at 1.75 lakh tonne means that the country is in a situation to produce only 17,500 mw of electricity even if it uses up all of these reserves.

The power produced by using the whole yield from Cudappah after the tardy process of mining would be just 4,900 mw, taking the total production to 9,700 mw over the next ten years, way short of the target.

And with the protests against the various nuclear plants in the country heating up, it is not even clear whether India would have enough reactors to consume the uranium extracted from Tummalapalli. For example, the two plants of 700 mw each at Rawatbhata in Rajasthan would only produce 1,400 mw by 2016. Construction of other plants, meanwhile, is at a nascent stage – some are still in the planning stages.

On top of that, the cost of mining uranium in India is extremely high compared to world standards. According to sources it is difficult to establish an accurate cost as the process is state-controlled. Whereas in western countries it is done by private companies.

The profitable cost standards are between $80 and $130 per pound across the world, according to the International Atomic Energy Agency's Red Book. Sources say India spends more than $130 per pound to mine uranium, which makes it a loss-making venture for the exchequer.

“For example, just the cost of mining and extraction of uranium from the 49,000 tonne that DAE claims to have discovered will be a minimum of $14.1 million,” a source said.

There is scope for mining 16,000 tonne of comparatively good quality ore in Meghalaya. However, protests against the proposed Uranium Corporation of India Limited (UCIL) plants have put that into jeopardy. Protests have also erupted in Gulbarga, Karnataka, where exploration is on.

Arpit Parashar is a Senior Correspondent with Tehelka.com.
arpit.parashar@tehelka.com

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Posted on 20 July 2011
 

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