Monday, 3 September, 2007

by Yuriy Humber
Bloomberg

Russia, holder of two-fifths of the world's uranium enrichment capacity, plans to sign a nuclear- energy accord with Australia Sept. 7, opening a new export market for miners including Melbourne-based BHP Billiton Ltd.

Russian President Vladimir Putin will sign the accord with Prime Minister John Howard in Sydney during a trip to attend the Asia-Pacific Economic Cooperation group meeting, a spokesman for the Russian nuclear energy agency said today by phone in Moscow. He declined to be identified before the accord is signed.

The agreement, which needs Russian parliamentary ratification, should be completed by next year, Australian Foreign Affairs Minister Alexander Downer told reporters Aug. 17, according to a transcript posted on his ministry's Web site.

Russia needs the metal to process into atomic fuel for a planned 42 extra domestic nuclear reactors by 2030. Australia has previously shunned nuclear power and limited uranium mining. Prime Minister Howard in April said this should change.

The agreement with Russia may spur Australia's regional authorities 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.

BHP Billiton, the world's largest mining company, began talks with Russia's state-owned fuel trader OAO Techsnabexport last fall on expanding its Olympic Dam mine in southern Australia.

The Russian parliament this year passed a law allowing registered private entities, including foreign ones, to own fissile material on Russian territory. That means foreign companies can export uranium to Russia for enrichment without having to cede ownership.

Russia holds 1 million metric tons of uranium, the world's third-largest resources after Australia and Kazakhstan. The country mined 3,200 tons last year, placing it fifth globally. Russia uses stockpiles and blends down fuel from warheads to meet demand.