www.news.com.au/story/0,10117,16201180-2,00.html


China seeks nuclear material

By Paul Colgan and wires
09-08-2005

THE Federal Government is in talks aimed at selling nuclear material to China.

Foreign Minister Alexander Downer said the Government was opening talks "on a nuclear co-operation agreement" that would allow China to buy Australian uranium.

He said the deal would "establish safeguards ... to ensure Australian uranium supplied to China is used exclusively for peaceful purposes".

Leading US think-tank Stratfor has warned the plan is likely to face stiff opposition from several quarters.

"Australia is headed for a heated debate pitting an unlikely alliance of anti-nuclear greens and China-phobic nationalists against the Government's desire to assert itself in Asia and to boost its revenue stream in the process," Stratfor said in an analysis today.

"The future of Australia as an Asian nation and the direction of massive Chinese energy consumption hang in the balance."

Australia controls 40 per cent of the world's uranium resources, while China is the world's second-largest consumer of energy after the US.

China is already struggling to meet energy demands in its rapidly growing economy, and it urgently needs new sources of power to maintain that growth.

The Federal Government currently has 19 nuclear agreements covering 36 countries, but a deal with China, which has an unknown nuclear capability and a highly secretive nuclear weapons program, may prove the most controversial yet.

Opposition resources spokesman Martin Ferguson and trade spokesman Kevin Rudd said today that Labor could not support uranium exports to a country that did not support nuclear safeguards.

"Labor has never, and will never, support the export of Australian uranium to countries that do not adhere to strict, internationally recognised nuclear safeguards," they said in a statement.

"If the Federal Government is serious in its desire to export uranium to China, then a nuclear co-operation agreement is a critical first step.

"Labor urges the Federal Government to adopt an open and consultative approach in the development of this co-operation agreement."

The Government argues that uranium exports help to reduce carbon dioxide emissions that contribute to global warming.

"Australian uranium exports account for around 2 per cent of total world electricity production," Mr Downer said today.

"Countries using Australian uranium avoid carbon dioxide emissions roughly equivalent to Australia's entire annual CO2 emissions."

Australia prohibits the sale of uranium for military purposes.

A talks timetable has yet to be scheduled but exploratory discussions have already taken place.

Australia currently has just three working uranium mine, but last week declared the resource-rich Northern Territory "open for business on uranium mining" after taking control of the deposits from the NT Government.

The takeover came after a tussle between the Federal Government and the NT Government, which had pledged to ban new uranium mines.

The NT stance threatened to undermine hopes of expanding Australian uranium exports to fuel the growing nuclear power industry around the world, notably in China and India.

The only operating mine in the Territory is run by Rio Tinto's Energy Resources of Australia at Ranger, which is surrounded by Kakadu National Park.

But Resources Minister Ian MacFarlane said last week that around a dozen companies were exploring for uranium in the Territory, home to some $12 billion worth of known uranium deposits.

French nuclear power company Cogema is lobbying traditional land owners in a bid to mine its multi-million-dollar, 14,000-tonne Koongarra deposit in the World Heritage-listed Kakadu park.

Uranium prices have been rising steadily in recent years, to around $29 per pound from nearly $10 a pound four years ago, fueled by growing acceptance of nuclear power as an alternative to greenhouse gas producing fossil fuels such as coal and oil.

A large number of countries, including China, India, the US, Britain, South Korea and Russia are looking at major expansions of their nuclear power programs.

Australia's two other operating uranium mines are BHP Billiton's Olympic Dam and Heathgate Resources' Beverley mine in South Australia.