Trade negotiations between Australia and China led to the 3 April signing of a Nuclear Transfer Agreement (NTA) and a Nuclear Cooperation Agreement which will see Australian uranium exported to China. Australia's uranium production is completely allocated until 2008, and commercial terms of any potential deal beyond that have not yet been agreed.
The nations have been in free trade talks since 2003, and Australia is expected to be the first Western nation to sign a free trade agreement with China. “This is really only the start of the process,” said Australian industry tourism and resources minister Ian Macfarlene, adding that significant export volumes are not anticipated before 2010.
The NTA, a bilateral safeguards agreement signed by the countries’ foreign ministers, Alexander Downer and Li Zhaoxing, states that any uranium delivered to China in two years’ time may only be used for peaceful purposes. China is expected to develop sufficient nuclear generation to require 20,000tU of imports annually by 2015.
Australia is the second largest uranium exporter (22% or the world’s supply behind Canada’s 29%), its largest single producer is BHP Billiton’s Olympic Dam mine which exports about 4000tU each year.
Processing equipment at the Olympic Dam uranium mine
BHP Billiton bought the Olympic Dam property from WM Resources last year, and has now approved a $5 billion expansion at the site. The mine produces both uranium and copper and the company hopes to increase uranium production to up to 15,000t/y and double copper output to 500,000t/y. The expansion, which still requires a final decision later this year, would involve pumping water 300km from the South Australian coast and a new rail link for ore transport.
Meanwhile, Peter Beattie, premier of Australia's state of Queensland has requested a study in to whether new uranium mining activities would harm the coal industry in that region. Beattie's Labor party has a policy of blocking all new uranium mining proposals, but the party's federal vice president and leader of the Australian Workers' Union, Bill Ludwig, has called the policy unsustainable.
Peter Costello MP, treasurer of the Commonwealth of Australia, commented: "Uranium is either all bad, in which case there should be no mines, or it's acceptable, in which case there should be such number of mines as are commercial. But there's no logic in saying it's good at three mines but bad everywhere else."
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