Friday, 7 September, 2007

Mining Journal Australia

Russia signed a nuclear accord with Australia, holder of the world`s largest uranium reserves, opening up a new export market for miners including BHP Billiton.

Russian President Vladimir Putin signed the agreement with Prime Minister John Howard in Sydney on Friday.

Putin, who is the first Russian head of state to visit Australia, said he hoped the two countries would expand their trade and economic ties.

Russia, which has two-fifths of the world`s uranium enrichment capacity, needs the metal to process into atomic fuel for a planned 42 extra domestic nuclear reactors by 2030.

The agreement, which needs Russian parliamentary ratification, should be completed by next year, Australian foreign minister Alexander Downer said last month. It allows Australian uranium to be used after enrichment in civilian nuclear power plants in Russia.

Australia already had an agreement where its uranium could be enriched in Russia for final use in another country.

The two leaders met on the sidelines of the Asia-Pacific Economic Cooperation summit being hosted by Howard in Sydney this week.

Trade between Russia and Australia stood at A$719 million (US$592 million) in 2006, a 65% increase on 2005, according to he Australian Department of Foreign Affairs and Trade.

The agreement with Russia may spur Australia`s state governments to allow more uranium mining, said Max Layton, a uranium analyst with Macquarie Bank Ltd in London.

“Who`s going to be sending the uranium? Nearly all of Australian production is fully contracted,” he said.

Australia`s three operating uranium mines are located in South Australia state and the Northern Territory, whose governments have indicated they would support new pits.

The state governments of Western Australia and Queensland, controlled by the Labor Party, have so far refused to consider uranium mines, going against an April decision by the party`s federal leadership to end its no-new mines policy.