Conversion Facility Costs for Value Adding Australia's Uranium Resource

This paper estimates the levelised (long-run average) cost of uranium conversion using discounted cash flow modelling for a range of conversion facility scenarios in Australia. The analysis involves escalating historic conversion capital, operations and materials costs and scaling them to the size of plants likely required for Australia in future, in order to determine the average conversion services costs range under international cost conditions. Further modelling is also undertaken in order to consider the impact on the cost of uranium conversion when incorporating decommissioning and specific domestic costs, including a higher weighted average cost of capital, labour, and electricity costs. While this paper estimates the costs of conversion in Australia under current conditions, it does not predict the costs of conversion at a future point in time when either domestic demand or the international market is sufficient to require such facilities in Australia. The domestic conversion costs including local labour, electricity and decommissioning costs ranges from $8.85/kgU to $14.86/kgU for a 10,000tU/yr facility (and $10.45/kgU to $17.65/kgU for a 5,000 tU/yr facility). While the levelised cost range for conversion services in Australia is estimated to be at the higher end of the international estimates range, a vertically integrated domestic nuclear fuel cycle, including mining, conversion and enrichment, may improve the economics of domestic value-adding of uranium. (author).