Adelaide, May 3, 2006 (ABN Newswire) - Australia's equities and exploration sectors can expect a high level of consolidation among uranium players in the short to medium term as the sector globally scrambles to discover greenfield deposits at sufficient rate to catch up with rampaging demand, a resources conference has been told.

Addressing the second day today of the "2006 Paydirt SA Resources & Energy Investment Conference" being held in Adelaide, Toro Energy Limited (ASX: TOE) Managing Director, Mr Greg Hall, said there were currently upwards of 60 uranium explorers operating in Australia.

"Not all of these will find and develop a uranium mine and we can expect significant consolidation to start occurring," Mr Hall said.

"A key upside of consolidation will be that remaining uranium exploration companies can build greater financial strength and talent pools, and this in itself will enhance prospects of commercial discoveries able to service world demand."

Mr Hall said only 55-60% of current global uranium consumption was from newly mined reserves - the remainder from a diminishing stock of uranium inventories and reprocessed material, much if it ex-military.

"These secondary sources are rapidly drying up and are being outstripped by new demand," Mr Hall said.

"Global uranium mine production must therefore increase to around 80% of uranium demand, and even with major expansions planned in Canada and at Olympic Dam in South Australia - moving from 5,000 to 15,000 tonnes of uranium per year - the shortfall is marked.

"From 2006 on, nuclear utilities around the world are faced for the first time with genuine concerns about where their supply will come from for the next 5-10 years for their billion dollar investments - an issue which for the past 20 years when supply far exceeded demand, they have not had to worry about.

"This is leading to an emerging price supply environment where the uranium spot price is very high but there is increasing evidence that term contracts above the spot price are now being written."

Mr Hall said there was an immediate global demand for an additional 18,000 tonnes per annum of uranium from 2013 onwards, with key demand from China, India and Russia as well as existing plants.

"This does not necessarily mean any increase in Australian production will go into these three destinations, but that if their shortfall is picked up by others, then the drain in supplies elsewhere can be filled by Australia."

"Successful Australian uranium juniors will be those that can tap into this supply with a discovery or acquisition, and mine development able to produce some of the 5,000-9,000 tonnes per annum which will need to come from emerging uranium producers."

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