Wednesday, 19 September, 2007

by Ashleigh Wilson
The Australian

The deal, signed before the APEC summit in Sydney this month, will allow Australian uranium to be supplied to Russia on condition it is not passed on to Iran or used to build nuclear weapons.

The conditions are similar to a deal Australia signed with China last year.

Following the signing of the agreement in Sydney by John Howard and Russian President Vladimir Putin, a delegation of Russians travelled to the nation's two largest uranium mines in South Australia and the Northern Territory.

The officials visited Rio Tinto's Ranger uranium mine in Kakadu National Park - the biggest exporter of Australian uranium - and BHP Billiton's Olympic Dam mine in South Australia, which contains the world's largest known low-grade deposit.

It is understood the visits were arranged to familiarise Russian officials with the two operations, and no specific discussions took place about future purchases.

It is estimated Russia could buy up to $1billion worth of Australian uranium a year, more than the entire present annual export value. A spokesperson for Rio Tinto yesterday confirmed the Russian delegation visited the Ranger mine, about three hours southwest of Darwin, on the weekend APEC leaders met in Sydney.

The Russians are also known to have visited the Olympic Dam mine site, although BHP Billiton yesterday declined to discuss the visit.

However, with any contracts to buy uranium from Australia expected to be years away from completion, the Rio Tinto spokesperson said the visit was designed only to "further their understanding" of the local industry.

"There was a delegation who came out who had accompanied President Putin (to Australia)," the spokesperson said.

"We're clearly at this point a long way from having approval to sell any material to Russia, because the ink isn't even dry yet on the agreement. They were interested in looking at Australian uranium mines to see what we did. There was no discussion of any contract or deal or any request to do anything like that."

As most of Ranger's output is pre-sold on long-term contract, it is probable Russian interest will centre on Olympic Dam, where BHP Billiton is considering a major expansion that would be in operation next decade.