Thursday, 5 October, 2006

by Michelle Wiese Bockmann
The Australian

CHINA could siphon off Australian uranium for military purposes because a bilateral agreement lacked proper safeguards, the Australian Conservation Foundation (ACF) told a federal parliamentary inquiry in Adelaide today.

ACF spokesman David Noonan said claims that if Australia didn't supply uranium to China somebody else would amounted to "the drug dealers' defence".

The inquiry is examining the Howard government's April 2006 agreement to export uranium to China, reversing a long-standing policy not to supply uranium to the nuclear weapons state.

Mr Noonan said Australian yellowcake would be enriched and converted at facilities in China jointly run by the military.

He said there was no way international or Australian authorities could adequately monitor or check whether uranium was used for nuclear weapons.

China's appetite for uranium for non-military purposes is rapidly increasing. Ten of the world's 442 nuclear power reactors are in China with plans to build a further 13 and proposals for another 50, the Association of Mining and Exploring Companies (AMEC) said in its submission.

China's uranium demands would be "significant," and establishing treaties the "optimal" method of securing influence to monitor its use, the AMEC said.

BHP Billiton, which owns the Olympic Dam uranium mine, gave evidence behind closed doors, requesting a private briefing.

Joint Standing Committee on Treaties chairman Dr Andrew Southcott said the private briefing was necessary to secure the information.

A $7 billion proposed expansion for the mine, to triple output to 15,000 tonnes of uranium oxide annually, would make the mine the world's largest and BHP Billiton the major beneficiary of China uranium sales.

The inquiry will hear evidence in Perth tomorrow, Melbourne later this month with a report and recommendations would be prepared by year's end, Mr Southcott said.