Tuesday 17th January 2006
ABC - PM

HAMISH FITZSIMMONS: Australian and Chinese officials will begin talks in Canberra tomorrow to establish strict rules for exporting Australian uranium to China.

The Federal Government wants China to guarantee it will only use the imported fuel for peaceful purposes and allow this to be verified by international inspectors.

But conservationists warn China might follow the same dangerous course as Iran and shun international scrutiny of its nuclear industry.

Brendan Trembath reports.

BRENDAN TREMBATH: China is courting uranium-rich Australia, the world's second biggest exporter of the fuel after Canada.

But Australia will take a while to determine if China can honour strict export rules, says energy industry analyst Tony Vassallo.

TONY VASSALLO: There has to be very, very stringent safeguards so that all radioactive material can be accounted for, and none will be diverted to weapons production.

So I think there's a lot of detail that will have to be agreed to, which will make that process transparent. I don't think the Chinese will be shy or reluctant to go down that route. Their need is genuinely for electricity production.

BRENDAN TREMBATH: But environmentalists are concerned that China might say one thing and do another.

David Noonan from the Australian Conservation Foundation says Australians can't have any confidence in the current nuclear safeguards being applied to China.

DAVID NOONAN: Just as we've seen with Iran, there is no assurance that a so-called civilian uranium enrichment program won't be used to produce material for nuclear weapons.

The IAEA's (International Atomic Energy Agency)'s safeguards with China is actually voluntary. The Chinese Government can choose to include or exclude any of their facilities, and they can withdraw from those safeguards in the future if they choose to.

BRENDAN TREMBATH: Australia has about 40 per cent of the world's known reserves of uranium, which can be relatively easily dug up.

China needs uranium to fuel its fast growing economy, says Ian Hore-Lacy from the Uranium Information Centre.

IAN HORE-LACY: And it's very committed to expanding its nuclear power capacity by five-fold, in fact by 2020, which is a very large increase, but even so, that will only take it up to having a uranium demand of around 8,000 tonnes a year, which is about one tenth of the world market.

BRENDAN TREMBATH: Uranium mining stocks have been hotly traded lately on expectations the Federal Government will allow exports to China.

There's been speculation today that the resignation of West Australian leader, Geoff Gallop, may lead that state to reconsider its opposition to uranium mining.

The Australian Government says countries using Australian uranium avoid using fuels like oil and gas, which produce greenhouse gases.

But it's not an argument which convinces anti-nuclear campaigners like David Noonan from the Australian Conservation Foundation.

DAVID NOONAN: Australia's responsibilities as a good global citizen should be to facilitate our neighbours in Asia to have energy efficiency, to have clean, renewable energy technologies, rather than to impose on them the hazardous burdens that we in the West have failed to address of nuclear risks and nuclear waste management.

BRENDAN TREMBATH: But there'll be no uranium-laden ships bound for China any time soon.

Two days of talks in Canberra between Chinese and Australian officials are just the beginning, says Tony Vassallo, the Chairman of Sydney branch of the Australian Institute of Energy.

TONY VASSALLO: I'd be very surprised if anything was set down before 12 or 18 months, I would have thought. Even if the agreement is struck earlier, I think the rest of the supply chain has to be geared up for the material to move to China. So I'd be surprised if we saw any movement of uranium fuel within 18 months or two years.

HAMISH FITZSIMMONS: Tony Vassallo from the Australian Institute of Energy ending that report from Brendan Trembath.