Saturday, April 28, 2007

Australia poised to ease uranium curbs

Australia poised to ease uranium curbs
By Raphael Minder in Sydney
Copyright The Financial Times Limited 2007
Published: April 27 2007 18:18 | Last updated: April 27 2007 18:18

Australia is set to take an important step on Saturday towards boosting its production and export of uranium, with the opposition Labor party expected to abandon its long-standing policy of restricting the mining of the ore.

Kevin Rudd, the Labor leader, intends to push through a proposal at the party’s annual conference to drop the “three mines” policy that Labor introduced in 1984. That policy has restricted uranium production to three specific sites.

The move is significant because, although the Liberal party leads the federal government, mining permits are handled by state governments, all of which are under Labor control.

The policy shift is being closely watched by many companies and governments. India, China, Russia and others hope to import more Australian uranium to help power their fast growing economies and their interest has helped boost uranium prices to record levels.

Alexander Downer, foreign minister, Friday said that talks were held this week with Russia on a supply agreement that would allow uranium shipments to Russian nuclear power plants. Further talks are to be held next month.

Prospects for an expansion of uranium mining have also spurred corporate consolidation in the sector.

Paladin Resources is hoping to complete the A$1.23bn (US$1bn, €750m, £511m) purchase of Summit Resources, which has a uranium deposit in the state of Queensland that it has not been able to exploit because of the “three mines’’ rule.

Areva of France this week acquired a minority stake in Summit, but said it would not mount a counter-bid.

Kim Beazley, the previous Labor leader, suggested the policy change last July, soon after John Howard, prime minister, called for Australia to better exploit its position as holder of the world’s largest uranium reserves in order to become an energy superpower.

Anti-nuclear protesters gathered Friday outside Labor’s conference in Sydney, calling for the mining restrictions to be maintained.

While the issue is expected to spark intense debate, it is thought that Mr Rudd will secure a comfortable majority.

Since his election as leader last December, he has managed to damp internal feuding having taken a commanding lead in opinion polls ahead of federal elections this year.

India and the US have been trying to negotiate a nuclear deal that could pave the way for India to import substantial quantities of uranium from Australia. Mr Downer this month told the Financial Times that a US-India deal was a prerequisite for any exports, as it would ensure international monitoring of Indian nuclear facilities.

Mr Howard has previously gone as far as suggesting that Australia should consider developing uranium enrichment activities, even if that might upset Washington’s efforts to contain nuclear proliferation worldwide.


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