India’s Oil Giant ONGC Diversifies Into Uranium Mining
By TC Malhotra in New Delhi
India’s oil exploration giant, Oil and Natural Gas Corporation (ONGC), plans to make a foray into uranium mining in an alliance with the state-owned Uranium Corporation of India Ltd (UCIL) which aims to tap into opportunities that arise from the shortage of nuclear fuel in India. The ONGC board has approved a proposed memorandum of understanding with Uranium Corporation of India Ltd (UCIL) that outlines the potential for jointly exploring for the mineral in India and abroad. The collaboration will leverage ONGC’s expertise in the exploration of hydrocarbons.
UCIL, which plays a very significant role in India’s nuclear power generation, is the only entity allowed to undertake uranium mining in India and has the power to allot mining leases to others companies. It operates a number of underground uranium mines in the Singhbhum shear zone of Jharkhand state. All the ore is processed at a single mill in Jaduguda. The resulting yellow cake is sent to the Nuclear Fuel Complex at Hyderabad to be fabricated into the fuel bundles that power the country’s Pressurized Heavy Water Reactors.
Due to the lack of nuclear fuel in India, the existing nuclear plants are running at half of their capacity. To date, India has 17 nuclear power plants, with a capacity of 4,120MW. Three more plants with a capacity of 2,660 MW are due for commissioning by March 2010. All these plants are run by the government-controlled Nuclear Power Corporation of India Ltd. (NPCIL).
Analysts believe ONGC has taken a sensible step in entering the uranium mining space, because nuclear power generation has emerged as one of India’s best options for the generation of electricity in recent years. Energy-hungry India is trying to expand its nuclear power program because it already imports more than 70 per cent of domestic crude requirements, and its coal reserves are decreasing at a rapid rate. At the prevailing oil and coal prices, the current set-up can’t last.
According to the country’s scientists, of all the non-coal based energy options, nuclear energy is the best bet but the India’s ongoing nuclear programme badly needs to import uranium or reactors, and that’s only possible if the country signs the international cooperation agreement.
The current level of uranium reserves in India cannot contribute significantly to the country’s uranium requirements. And under present circumstances since India isn’t party to the Nuclear Non-Proliferation Treaty (NPT) it can’t import uranium due to the restrictions imposed by the Nuclear Suppliers Group (NSG). Consequently it’s forced to rely on the expediency of domestic uranium production.
India’s Atomic Energy Commission Chairman, Dr Anil Kakodkar, recently said at a seminar that if India is unable to import nuclear reactors or nuclear fuel it will instead have to import coal, and in huge volumes. That is, unless solar capacity grows at even large levels. Subjecting a large country to the vagaries of such large coal imports on a regular basis could have shocking economic effects, and would put it into direct competition with other major consumers.
According to Dr Kakodkar, the projected energy gap in 2050 - at which point India’s forecast requirement would be 1.6 billion tonnes of coal - could be bridged if light water reactors (LWRs) with an installed capacity of 40GWe are imported between 2012 and 2020. The spent fuel from these LWRs would be used to launch a series of fast breeder reactors (FBRs). That development might just wipe out any potential deficit.
“In case this import is delayed by a decade, the energy deficit by 2050 would be 178 GWe, and the coal import need would go up to 0.7 billion tonnes — or twice the annual coal needed today”, said Dr Kakodkar.
The ONGC move came close on the heels of a Indo-US nuclear deal. Three years ago, in July, 2005, India signed a civilian nuclear accord with the United States, but the deal has still some hurdles get over before it’s finalised.
Currently, the deal is undergoing the scrutiny of the International Atomic Energy Agency (IAEA). After securing IAEA approval, India must also get clearance from the Nuclear Suppliers Group (NSG), a group of 45 states that export nuclear fuel and technology. Then the deal has to be cleared by the US Congress. But both India and the US are eager to close the deal during the tenure of US President George W. Bush, which will end on 20th January 20 2009.
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