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Australia, China sign uranium trade deal

Posted on: Monday, 3 April 2006, 01:55 CDT

By Michelle Nichols

CANBERRA (Reuters) - Australia and China signed a nuclear safeguards deal on Monday that set the stage for huge uranium exports to Beijing for its power industry, but Canberra said the trade was unlikely to start for some years.

Australian Foreign Minister Alexander Downer and his Chinese counterpart, Li Zhaoxing, signed the nuclear safeguards deal in the presence of visiting Chinese Premier Wen Jiabao and Australian Prime Minister John Howard.

"Given China's high projected growth in electricity demand over the coming years, there are clear environmental benefits in diversifying from fossil fuels to low greenhouse-emission technologies such as nuclear power," Downer said in a statement.

China is expected to build 40 to 50 nuclear power plants over the next 20 years and needs steady supplies of uranium. Its own uranium stocks are dwindling, not very rich and difficult to extract.

Australia has about 40 percent of the world's known uranium reserves, but it will only export to countries that have signed

the UN Nuclear Non-Proliferation Treaty (NPT) and who also agree to a separate bilateral safeguards deal.

India also wants to buy uranium from Australia, but has not signed the NPT and Howard has said he was not planning to change his strict uranium trade policy just because New Delhi signed a nuclear technology deal with the United States.

The U.S.-India deal agreed last month requires New Delhi to separate its military and civil nuclear facilities and open civilian plants to inspections in return for U.S. nuclear fuel and technology, but still needs approval from the U.S. Congress.

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

Macfarlane said China's predicted uranium consumption was estimated at 20,000 tons a year, while Australia currently produced only about 10,000 tons a year from its existing three mines. He said extra capacity would be needed to supply China.

"WORLD LESS SAFE"

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

The NPT requires the five nuclear-weapon states -- Russia, the United States, United Kingdom, France, and China -- not to transfer nuclear weapons, other nuclear explosive devices, or technology to non-nuclear-weapon states and non-NPT countries.

"I'm firm in the belief that with the considered effort of both countries, China-Australia relations and cooperations will yield rich fruits," Wen told a lunch at Parliament House.

About 25 human rights protesters gathered out the front of Parliament House in Canberra in opposition to Wen's visit, including a former Chinese diplomat who granted residency in Australia after he first sought political asylum.

Minority Australian Greens party politician Christine Milne said Australia was putting money before human rights and global security by allowing communist China to import uranium.

"Make no mistake -- selling Australian uranium to China will make the world less safe," Milne said in a statement.

Australia and China are also negotiating a free trade deal and Wen said the two countries had agreed to accelerate talks.

"That is in the next one or two years China and Australia should work together to strive for breakthroughs on major issues related to the FTA negotiation ... to lay the foundation for the arrival of an overall agreement," Wen said.

Howard praised Wen and said that the nuclear and other deals signed on Monday highlighted the countries developing ties.

"You represent a leader of a remarkable nation which is destined to play an even greater role in the affairs of the world and a nation with which Australia seeks to build an ever closer, more effective and more permanent partnership," Howard said.

Some analysts say the safeguards deal with China will test Australia's skills at juggling growing ties with Asia's emerging power and its strong alliance with the United States, which is wary of Beijing's military and economic ambitions.

($1=A$1.40)

Source: REUTERS

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