Rio Tinto eyes uranium business for growth

A workshop of Sanway Steel Building Co in Tengzhou, Shandong province. China is still forecast to need a large amounts of iron ore to make steel. In 2015, more than 40 percent of Rio Tinto Group's revenue came from China. [Photo/China Daily]

Global mining giant Rio Tinto Group is looking into opportunities for growth in uranium business, predicting an uptick in the industry driven by China's rising demand for the nuclear fuel.

"Uranium has been a tough business since the Fukushima nuclear disaster in Japan, but the uranium market will recover with new nuclear power plants coming on in China and other countries in the world," said Sam Walsh, chief executive of the company.

Rio Tinto has uranium-related operations in Australia and Namibia and potential projects in Canada after it completed the acquisition of Hathor Exploration Ltd, a uranium exploration company with assets in the Athabasca Basin region of Saskatchewan, in 2012.

"Currently, Canada's Hathor project is in drilling process, and it is very early in terms of development, but I think nuclear power is an important part of environmental solution for the world and it has a positive prospect in the future," said Walsh.

Uranium prices declined from more than $130 per pound to about $40 last year in the wake of the Fukushima crisis and temporary shutting of nuclear power plants across the globe.

Experts said though prices may remain depressed this year, it will see a big rebound to about $70 to $80 in the coming years as China, a major contributor to the growth in uranium demand, is embarking on a massive program to build about 110 nuclear reactors by 2030.

In 2015, more than 40 percent of the British-Australian mining giant's revenue came from China, the world's second-largest economy, and Walsh expects the share to continue to rise in the next three years.

That is because he is confident that the company’s business will grow along with China’s development.