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Reasonably assured unconventional resources by mining method

(tonnes U)

Reasonably assured unconventional resources by processing method

(tonnes U)

Prognosticated unconventional resources

(tonnes U)

Cost ranges

Speculative unconventional resources

(tonnes U)

NATIONAL REPORTS: CHINA (PEOPLE’S REPUBLIC OF)

China (People’s Republic of)

Uranium exploration and mine development

Historical review

Before the 1990s, uranium exploration in China mostly focused on granite or volcanicrelated hydrothermal deposits in Jiangxi, Hunan and Guangdong and Guangxi in South China. Decades of exploration by the Bureau of Geology (BOG), a subsidiary of China National Nuclear Corporation (CNNC), resulted in the identification of the majority of the ore fields (deposits) for example, Xiangshan, Xiazhuang, Zhuguang and Lujing. In those deposits the uranium ore bodies mainly occur in intermediate to acidic magmatic rocks (granite and volcanic rocks). Besides a few large ones, most of the deposits are relatively small, usually middle to low grade. Additionally, the deposits are mostly located in remote mountain areas so mining costs are higher. At the beginning of 1990s, when China initiated its nuclear energy programme, the demand for uranium for China’s NPPs increased very little. In the mid-1990s, uranium exploration in China slowed down because of the decrease of national investment in uranium exploration.

From the middle to the end of the 1990s, as NPP construction accelerated in coastal areas, the demand for uranium steadily increased in response. In this period, the national financial expenditures for uranium exploration went up gradually, year by year. However, both the number of projects and the areas of exploration were limited. In order to meet the demand of uranium resources for the mid-term and long-term development plan of national nuclear energy, China changed the targets and distribution of uranium exploration from conventional mining deposits of hard rocks in southern China to in situ leachable deposits in Meso-Cenozoic basins in northern China at the beginning of the 21st century, focusing on sandstone-type uranium deposits suitable for ISL mining. Regional geological surveys and drilling evaluations were mainly carried out in Yili, Turpan-Hami and Junggar Basins in Xinjiang and in Erlian, Ordos and Songliao Basins in Inner Mongolia. After more than ten years’ exploration, the investigation and evaluation for uranium resources in Yili, Ordos, Erlian, Songliao, Jungar, Tarim, Bayingebi, Badanjilin, Qadam, Yanqi, Haylar and other basins have been successful, with the discovery of several medium-large uranium deposits; From 2000 to 2006, the annual drilling footage gradually increased from 40 000 m to 250 000 m. Since 2006, investment in uranium exploration had further increased, and drilling footage peaked to 900 000 m in 2012. In recent years, the supply and demand relationship changed because of the lowering of the global uranium price. Uranium exploration expenditures remained high in China before 2015, but notably fell between 2015 and 2016.

Since 2008, besides CNNC, which has been the major organisation involved in uranium exploration in China, Uranium Resources Co. Ltd, a subsidiary of China General Nuclear Power Corporation (CGNPC), has also been active in domestic uranium exploration, and consequently carried out uranium exploration projects in the north margin of Tarim Basin, Xinjiang and in Guangdong Province. Additionally, Liaohe Oilfield of China National Petroleum Corporation (CNPC) has been developing uranium exploration in Tongliao District, Inner Mongolia.

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Recent and ongoing uranium exploration and mine development activities

Domestic uranium exploration was relatively stable and consistent between 2015 and 2016. The budget had decreased in comparison to 2013 and 2014, nonetheless overall better progress and results were achieved in uranium exploration. The exploration focused on sandstone-type uranium deposits in north China, where the deposits discovered in the earlier stages were further expanded and uranium mineralisation and new uranium ore fields were discovered in new areas and new strata in Songliao, Jungar, and Erlian Basins. Preliminary exploration indicated they had large potential. Meanwhile, uranium exploration was carried out in the deeper parts and on the periphery of the known hard rock-type uranium ore fields in south China, which resulted in some increases of the resources/reserves. However, no new large, high-grade and low-cost uranium deposit was discovered.

The exploration, including regional uranium potential assessment and further works on previously discovered mineralisation and deposits in northern China has principally been focused on the Yili, Turpan-Hami, Junggar and Tarim Basins of the Xinjiang Autonomous Region; the Erdos, Erlian, Songliao, Badanjili and Bayingebi Basins of Inner Mongolia; the Caidamu Basin in Qinghai Province and the Jiuquan Basin in Gansu Province. Geophysical methods, including radiation surveys and geo-electromagnetics were combined with drilling and shallow seismic methods for the assessments. Further drillings were carried out in mineralised areas in order to identify in situ leach (ISL) amenable sandstone-type deposits, as well as conventional mining of mudstone-type deposits and sandstone-type deposits with low permeability.

The exploration work in southern China is mainly directed at identifying metallogenic belts relating to volcanic-type and granite-type deposits, mostly focused in the Xiangshan and Taoshan uranium orefields in Jiangxi Province, the Xiazhuang and Zhuguang uranium orefields in Guangdong Province, the Miaoershan uranium orefield in the Guangxi Autonomous Region, the Dawan uranium orefield in Hunan Province, and the Ruoergai area of Sichuan Province. Potential deposits in carbonaceous siliceous pelitic rocks were the secondary targets in this exploration campaign.

resources in northern China such as those contained in the Yili, Erdos, Erlian, Tuha, Songliao Basins have increased. In addition, significant progress has also been achieved in old uranium ore fields of southern China, such as the Taoshan, Lujing, Zhuguangnanbu and Miaoershan uranium ore fields.

Uranium resources

Identified conventional resources (reasonably assured and inferred resources)

Between 2015 and 2016, some new resources categorised as RAR and IR have been added to China’s uranium resource base. These additional resources are mainly due to the ISLamenable sandstone-type deposits. However, as a result of declining uranium price and shift of priority for prospecting, the total identified resources in the hard rocks have decreased. A new resources classification and estimation have been made taking into account fluctuations in the uranium price. As of 1 January 2017, the identified uranium resources in China totalled 370 900 tU (in situ), distributed in 21 uranium ore fields of 13 provinces or autonomous regions, as listed in the following table.

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Undiscovered conventional resources (prognosticated and speculative resources)

China has very good potential for the discovery of additional uranium resources. According to the prediction and evaluation for metallogenic potential of uranium resources conducted systematically by several institutes in China, there are more than 2 million tU of potential uranium resources in China. Favourable areas include the Erlian Basin of Inner Mongolia, which was identified in the last few years. Other areas such as the Tarim and Junggar Basins in the Xinjiang Autonomous Region and the Songliao Basin in north-east China are regarded as favourable target areas. More uranium resources may also be added to the known uranium deposits in southern China as prospecting and exploration continues. With further exploration in uranium metallogenetic prospective areas, more uranium resources are expected to be discovered.

Unconventional resources and other materials

There are unconventional uranium resources associated with phosphate rocks. However, no systematic appraisal of unconventional uranium resources has been conducted in China.

Uranium production

Historical review

The more than 50 years history of China’s uranium industry has included both a boom in activities during the first two decades and a decline in the late 1980s to 1990s. In the early 2000s, there was a surge in activities, driven principally by the ambitious new NPP construction programme announced by the Chinese government and the increased uranium spot price. As a result, uranium production was rejuvenated.

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As uranium demand for NPPs is projected to increase rapidly in the coming decade, China responded by accelerating the pace of domestic uranium exploitation to ensure uranium supply. Several existing uranium production centres such as Fuzhou and Yining were developed and put into construction to expand their capacity to achieve both stable and increasing production. Additionally, to promote uranium production, the development of other new uranium production centres based on uranium deposits with reliable reserves and favourable technological/economic feasibilities, such as for the Tongliao and Guyuan uranium deposits, were also accelerated. Finally, to construct new uranium production centres in the future, a series of pilot tests and feasibility studies were carried out in some newly discovered ISL-amenable sandstone uranium deposits with abundant reserves, such as Erduos and Erlian.

Uranium production centre technical details

(as of 1 January 2017)

* Capacity prior to suspension.

Status of production capability

Between 2015 and 2016, with the influence of a sustained declining uranium price, Chinese companies engaged in the uranium industry adopted a series of measures to withstand the challenges for sustainable development. First, steps were taken to strengthen the management, which aimed at improving production efficiency and

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reducing production costs. Secondly, several underground uranium mines with high production costs were closed or suspended provisionally. Lastly, ISL production centres in northern China were built or expanded, and environmentally friendly mines of considerable size were constructed in Xinjiang and Inner Mongolia.

There are currently a total of seven production centres in China: Fuzhou and Chongyi in Jiangxi Province, south-east China; Lantian in Shaanxi Province, north-west China; Qinglong in Hebei Province, northeast China; Shaoguan in Guangdong Province, south China; Yining in the Xinjiang Autonomous Region of north-west China and Tongliao in Inner Mongolia of north-east China. Between 2015 and 2016, production capacity has increased. The proportion of production from underground uranium mines decreased significantly, while production from ISL uranium mines increased and dominated the total production.

•The Fuzhou production centre is an underground mine, which exploits Xiangshan volcanic-type uranium resources with conventional ion-exchange processing.

•The Chongyi production centre in the Jiangxi Province, is an underground mine, which exploits Lujing and Taoshan granite-type uranium resources with a hydrometallurgical process using heap leaching and ion-exchange. This centre suspended production and is currently on care and maintenance due to depressed market conditions and high production costs.

•The Yining ISL production centre is located in Yining, Xinjiang Autonomous Region, and mainly exploits sandstone-hosted uranium resources in Yili and Tuha Basins using an ion-exchange hydrometallurgical process. Construction of the new Mongqiguer ISL project in this centre was completed and will now be in the production stage, thereby increasing the production capacity of the centre significantly.

•The Lantian production centre in the Shannxi Province is an underground mine, which exploits Lantian granite-type uranium resources with an in-place leaching process. This centre suspended production and is currently on care and maintenance due to depressed market conditions and high production costs.

•The Qinglong production centre in the Hebei province is an underground mine, which exploits Qinglong volcanic-type uranium resources with heap leaching and solvent extraction. Currently the Benxi mine belongs to this centre and was closed down and put into decommissioning due to the depletion of resources.

•The Shaoguan production centre in the Guangdong Province is an underground mine, which exploits Xiazhuang and Zhuguang granite-type uranium resources using an ion-exchange process.

•The Tongliao production centre in the Inner Mongolia is an underground mine, which exploits sandstone-hosted uranium resources in southern Songliao Basin using an ion-exchange process.

Regarding overseas uranium development, CNNC and CGNPC have been involved in several uranium projects mainly distributed in Namibia, Kazakhstan and Niger. CNNC signed an agreement in 2014 to buy a 25% equity stake from Paladin Energy in its flagship Langer Heinrich uranium mine, and had acquired a total of 1 300 tU under the shareholder’s equity by the end of 2016. The Azelik uranium project in Niger suspended production and is currently on care and maintenance. The Semizbay and Irkol mines in Kazakhstan, which CGNPC invested in together with Kazatomprom, have provided 4 258 tU to CGNPC under the shareholder’s equity at the end of 2016. CGNPC purchased the Husab Project in Namibia in 2012. The project produced its first yellowcake and launched a pilot production in 2016.

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Ownership structure of the uranium industry

The uranium industry is owned by state-owned enterprises in China. The Tongliao production centre is a joint venture owned by CNNC and CNPC. All other centres are sole proprietorship enterprises owned by CNNC.

Employment in the uranium industry

The industrial restructuring of domestic uranium production is a response to the pressure of low uranium prices. The underground uranium production centres of southern China with relatively high costs have reduced production and downsized the workforce accordingly and a few centres have suspended production provisionally, pending a change in market conditions. On the other hand, highly automic ISL uranium production centres have been newly built or expanded at the existing centres in northern China. Consequently, employment in this industry has decreased gradually while a steady growth in production capacity has still been achieved.

Future production centres

Industrial tests have been launched on a new mineralisation block of the Tongliao sandstone-hosted uranium deposit in Inner Mongolia and a corresponding expansion is planned at the associated production centre.

ISL tests are being carried out in some parts of the Erdos and Erlian uranium deposits in Inner Mongolia to obtain relative technical parameters and economic indicators for the development of these two deposits.

The ISL tests in three of the above-mentioned deposits achieved good results, which may lead to them to becoming principal centres in the future.

In addition, once the uranium market rebounds, the current sub-economic uranium production centres are expected to be put into operation again.

Uranium requirements

As of 1 January 2017, the total installed capacity of the 35 NPPs in operation in China is 33.6 GWe, accounting for 2.04% of total electricity installed capacity and ranking fourth in the world. Annual uranium requirements amount to about 6 700 tU. The total amount of electricity generated by nuclear power was 210.5 TWh in 2016, accounting for 3.56% of total generated electricity, which represented a 25.07% increase compared with the same period in 2015. Furthermore, an additional 21 NPPs with the capacity of 23.9 GWe are under construction in China.

During the 13th Five-Year Plan period, the Chinese government will promote nuclear power construction, especially in coastal areas and adhering to the principle of development in a clean, low-carbon and eco-friendly way, as well as ensuring safety.

According to the government’s nuclear power programme, the total capacity of NPPs will reach between 50 GWe and 58 GWe by the end of 2020. Based on preliminary calculations, uranium requirements will amount to between 10 100 tU and 12 000 tU in 2020, then rise to between 12 300 and 16 200 tU in 2030, and to between 14 400 and 20 500 tU in 2035.

Supply and procurement strategy

In order to meet the demand of NPPs planned within the development programme approved by the government, the policy “Facing Two Markets and Using Two Kinds of Resources” has been adopted. Uranium supply will be guaranteed through a combination

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of domestic production, development of non-domestic resources and international trade. As a supplement and balance to domestic production and supply, international trade will ensure a stable supply with reasonable prices on both the spot and future markets.

Uranium policies, uranium stocks and uranium prices

National policies relating to uranium

Uranium supply should be given more attention by the Chinese government. It should be emphasised that there needs to be a safe and economical and diverse supply that is also reliable. Adequate commercial stocks are also required. Several measures have been taken by the government for supporting the exploration and development of uranium resources, such as stable investment for domestic exploration; allowing non-government organisations to engage in uranium exploration activities; reviewing the restrictions associated with the domestic production regulation (limitation); as well as promoting investment in overseas uranium resources and the establishment of overseas production centres.

Uranium stocks

N/A.

Uranium prices

The uranium price has been gradually streamlined with the international market price in order to follow the global trend of uranium prices. Accordingly, it is priced in China following the fluctuations of the international market.

Uranium exploration and development expenditures and drilling effort – domestic

(USD millions)

* Non-government.

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Uranium exploration and development expenditures – non-domestic

(USD millions)

* Non-government.

Reasonably assured conventional resources by production method

(tonnes U*)

* In situ resources.

Reasonably assured conventional resources by processing method

(tonnes U*)

* In situ resources.

Inferred conventional resources by production method

(tonnes U*)

* In situ resources.

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Inferred conventional resources by processing method

(tonnes U*)

*In situ resources.

Historical uranium production by deposit type

(tonnes U in concentrates)

Historical uranium production by processing method

(tonnes U in concentrates)

*Also known as stope leaching or block leaching.

**A subset of open-pit and underground mining, since it is used in conjunction with them.

Historical uranium production by production method

(tonnes U in concentrates)

1. Pre-2010 totals may include uranium recovered by heap and in-place leaching.