Deal done on uranium sales

April 03, 2006

CHINA can now buy Australian uranium under a deal signed by the two countries today.

It could be worth billions of dollars for Australia, which has 40 per cent of the world's known uranium.

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But critics are worried about whether China will adhere to strict safeguards aimed at preventing Australia uranium being used for military purposes.

This morning, Foreign Minister Alexander Downer and his Chinese counterpart, Li Zhaoxing, signed two agreements, paving the way for the supply of Australian uranium for China's nuclear power program and for the two nations to co-operate on peaceful uses of nuclear technology.

China has promised it will only use the Australian fuel for peaceful purposes, saying it takes seriously its obligations as a member of the International Atomic Energy Agency and as a signatory to the nuclear non-proliferation treaty (NPT).


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Chinese Premier Wen Jiabao is in Australia on a four-day visit aimed at boosting bilateral ties, including the rapidly growing trade relations between the two countries.
"This (uranium) is solely for peaceful purposes," Mr Wen told a media conference following the signing of the agreement.

"We must proceed with our co-operation in this field on the basis of mutual respect, mutual benefit and equality," he said through an interpreter.

Mr Howard said he was satisfied safeguards would be enforced.

"It's on that basis that the agreements have been signed," he told reporters.

Asked if Labor's three mines uranium policy could hamper supply to China, Mr Howard said the opposition policy already appeared to be crumbling.

South Australian Premier Mike Rann and federal Labor resources spokesman Martin Ferguson have both expressed a desire for the policy to be revisited.

Mr Howard indicated the government would look at its options if the Labor policy proved to be a problem.

"The government will also, in the fullness of time, examine what other capacity the national government has if that becomes necessary, but it's a little early to be contemplating that," he said.

Earlier, Resources Minister Ian Macfarlane said he did not expect any uranium sales to China before 2008.

"It's unlikely that Chinese uptake of Australian uranium will occur in the next two years," he told ABC radio.

"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. From there we need to move forward.

"There needs to be commercial negotiations between companies in Australia producing uranium and those companies in China that wish to purchase that."

Mr Downer said, apart from uranium supply, the agreement also provided for collaboration in a broad range of peaceful applications of nuclear equipment and technology.

While the agreement does not appear to mention the issue of Chinese exploration, a spokesman for Mr Downer said China had always had the ability to explore for uranium in Australia.

Like other countries, Chinese companies had to get mineral exploration licenses from state governments to undertake exploration.

However, previously, they weren't able to export their uranium to China. Under the new agreement, they will be able to do so.

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