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Brazil seeking to attract private uranium mining, nuclear energy investment

18th October 2019

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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The Brazilian government intends to restart the mining of uranium within the country’s borders. Federal Mines and Energy Minister Bento Albuquerque told the newspaper O Estado de São Paulo that this was not merely the desire of government, but a policy decision that would be adopted. The expectation is that uranium mining would first be restarted at the Engenho mine, at Caetité in Bahia state, by the end of this year.

Under the Brazilian Constitution, the exploration and mining of uranium, is a State monopoly, currently vested in the State-owned Indústrias Nucleares do Brasil (INB – Brazilian Nuclear Industries). But the federal government is looking at ways in which private-sector investment – both local and international – could be attracted into the uranium sector, without requiring any changes to the Constitution. (Amending the Brazilian Constitution requires both houses of congress to each pass a constitutional amendment proposal twice – that is, there has to be four votes in all – and each vote must secure a majority of at least 60% of the deputies and senators.)

The desire to obtain private investment in the country’s future uranium projects is the result of significant federal government budgetary restrictions, meaning that the State does not have the funds to implement its new uranium policy on its own. Only a third of Brazil has so far been explored for uranium, but, even so, the country is currently, O Estado reported, ranked seventh in terms of uranium reserves, after Australia, Kazakhstan, Canada, Russia, South Africa and Niger. (Other sources rank Brazil eighth – the Brazilian newspaper seems to have forgotten Namibia.)

“There exist a number of alternatives, without the necessity to amend the Constitution, that allow this mining activity to be done by INB and another, private-sector, company,” Albuquerque told the newspaper. “With regard to the uranium, the INB will be the majority shareholder. During mining, there is not only uranium – you may have another mineral [present] and normally do.”

For example, the orebody at the Santa Quitéria project, in Ceará state, is composed 90% of phosphates and 10% of uranium. As a result, INB has formed a partnership with private-sector enterprise Grupo Galvani (60%- owned by Norwegian fertiliser group Yara International) to exploit the orebody, and operations are expected to start in 2024. INB would own the uranium, and Galvani the phosphates.

According to Brazil’s Investment Partnerships Programme Special Secretary Martha Seillier, companies from a number of countries have already expressed interest in exploring for uranium in the country. They include China, France, Japan, South Korea, Russia and the US.

Making it clear that he was giving his personal opinion, and not stating government policy, Albuquerque said that he favoured ending the State monopoly on the exploration for and mining of uranium. This would require a constitutional amendment.

A key reason behind this new emphasis on uranium mining is the current Brazilian government’s policy to expand the country’s nuclear energy programme. Currently, Brazil has two operating nuclear reactors, Angra 1 and Angra 2. Angra 3 was 67% complete when, in 2015, the country’s State-owned nuclear energy company, Eletronuclear, was (like many other major Brazilian businesses) swept up in the police federal’s (PF’s) huge ‘Lava Jato’ (‘Car Wash’ – literally, ‘Jet Wash’) anticorruption operation. This caused all work on Angra 3 to stop. (The PF investigation into Eletronuclear was the sixteenth phase of Lava Jato, and code-named Operation Radioactivity. Lava Jato started in March 2014; as of September this year, it was in its 66th phase.)

Government is now seeking to complete Angra 3, which should cost 16-billion reais ($3.89-billion). Again, tight budgetary constraints are causing government to consider the option of private investment. Once more, under the Constitution, all nuclear power plants in Brazil must be State-owned. But, again, that does not rule out a minority shareholding by a private-sector investor. And a minority shareholding could be as much as 49%, according to Seillier. So, she explained, the idea was to publish a public notice calling for a private-sector partner for Angra 3 during the first half of next year and restart the construction works during the second half of 2021. All three reactors are located at Angra dos Reis, Rio de Janeiro state.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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