As comparison, it took the state ten years to reach the same rate of growth prior to the pandemic. It has also moved from being the slowest growing economy to the fastest. While there have been a lot of factors contributing to this, including great wheat producing weather, increasing tourism and strong population growth, another driver is now emerging and this is demand for uranium.

Australia banned nuclear energy in 1998 due to safety concerns and hence does not use uranium as an energy source. However, globally, interest has been renewed, primarily because nuclear power does not produce carbon and using it will help with reaching Zero Carbon. But also because following the end of the pandemic, energy costs have accelerated and there are ongoing problems with dependency on Russian gas. This has led to uranium prices accelerating quickly.

Australia has the most uranium deposits in the world, accounting for 25 per cent of the global total but is the fourth largest producer in the world. There are three mines in Australia, all of them in South Australia. Last week, uranium’s spot price exceeded $140 a kilo, its highest since 2011. It is possible it could reach $200. The two largest global producers are sold out until 2027; some utilities are thought to be short for 2024.

Demand is coming from increasing use of nuclear energy for power generation, particularly in Europe which is trying to move away from a reliance on Russian gas. Russia also provides a lot of the world’s uranium and many countries are looking for other suppliers. Another push is from a global focus on low carbon power. Even Japan, which was impacted by a catastrophic fall out following Fukushima, is now pushing ahead for plans given its heavy reliance on imported energy.

Meanwhile, it isn’t just mining driving South Australia. Wheat is expected to be less of a contributor to growth given upcoming weather conditions however population growth continues. International migration is now at particularly high levels. And even more positively, the flow of people outwards from the state is reversing. It appears that a lot more people like being in South Australia than was the case last decade.

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