Australia and China sign deal on uranium trade

By Michelle Nichols

CANBERRA (Reuters) – Australia and China signed a nuclear
safeguards deal on Monday to allow Beijing to import Australian
uranium for power generation, but an Australian minister said
exports were unlikely to start for some years.

The deal was signed in the presence of visiting Chinese
Premier Wen Jiabao and Australian Prime Minister John Howard.

China is expected to build 40 to 50 nuclear power plants
over the next 20 years and needs steady supplies of uranium.

Australia has about 40 percent of the world’s known uranium
reserves, but it only allows sales to countries which have
signed the Nuclear Non-Proliferation Treaty (NPT) who also
agree to a separate bilateral safeguards deal.

But it has only three operating uranium mines, owned by BHP
Billiton, Rio Tinto and General Atomics of the United States,
and Resources Minister Ian Macfarlane said big uranium exports
to China were unlikely to start until 2010.

“Australia is already fully committed in terms of uranium
production through until about 2008, bearing in mind that the
signing of this agreement means that this is really only the
start of the process,” Macfarlane told Australian radio.

He said once the safeguards deal was signed, China would
then need to begin commercial negotiations with uranium
producers in Australia, and new mines would probably need to be
developed that would require licensing by the government.

“Realistically in terms of any significant quantity we are
probably looking at some time past 2010,” said Macfarlane, who
met Wen in the Western Australian state capital Perth on
Sunday.

Some analysts have said the safeguards deal between
Australia and China, which are also negotiating a free trade
deal, will test Canberra’s skills at juggling growing ties with
Asia’s emerging power and its strong alliance with the United
States.

Australia’s willingness to embrace Beijing has highlighted
differences with its close ally the United States, which
remains wary and has questioned China’s military and economic
ambitions.

Australia has 19 bilateral nuclear safeguard agreements,
covering 36 countries, including the United States, France,
Britain, Mexico, Japan, Finland and South Korea.

The NPT obligates the five nuclear-weapon states — the
United States, Russia, United Kingdom, France, and China — not
to transfer nuclear weapons, other nuclear explosive devices,
or technology to non-nuclear-weapon states and those which
haven’t signed the treaty.