The Age ~~ Melbourne ~~ Saturday September 8 2007
States need to dig deeper to supply Russia uranium
Nabila Ahmed and Jesse Hogan
Read more on the uranium market at:
and scroll down for more on the "done uranium deal" between Howard and Putin
AUSTRALIAN uranium producers have gained a significant export customer, Russia, but will not be able to fully satisfy its demand for the radioactive metal until state governments end their opposition to new mines, say analysts.
Prime Minister John Howard and Russian President Vladimir Putin yesterday confirmed a deal for Australian uranium to be exported to Russia for non-military use.
The former Soviet nation expects to generate $US3 billion ($A3.63 billion) for its economy between 2008 and 2015 by processing Australian uranium for countries such as Japan and the US.
Hartleys resources analyst Andrew Muir said any deal to sell more uranium was positive for the local industry.
"BHP will be producing considerably more ore from their Olympic Dam expansion … (and) there will be a significant increase in uranium output once that comes on line," he said.
Olympic Dam is one of only three active uranium mines in Australia, and Mr Muir said it would take "at barest minimum" two to three years to make other mines operational.
South Australia and the Northern Territory allow uranium mining but Queensland and Western Australia do not.
Hogan & Partners Stockbrokers resources analyst Gary LeBas said there was "absolutely no way" demand for uranium could be met from existing mines.
"It's very well the Federal Government saying we'll sell uranium to them but there's something missing supply (is determined) by the state governments," he said.
"There's enough red tape in our industry right now to get a goldmine together in this state (WA) without trying to get a uranium mine up and running. It's fairly daunting."
Monday, September 10, 2007. Issue 3739. Page 2.
Australia Signs Uranium Deal
By Meraiah Foley
The Associated Press
SYDNEY, Australia -- Leaders from Russia and Australia signed a deal Friday to export Australian uranium to fuel Russian nuclear reactors, but promised it would not be transferred to Iran's disputed atomic program.
President Vladimir Putin and Australian Prime Minister John Howard signed the deal during bilateral talks on the sidelines of a summit of Pacific Rim leaders in Sydney.
While the agreement forbids Russia from selling Australian uranium to any other nation or using it for military purposes, critics of the deal worry that it could make it easier for rogue states to obtain the raw material.
The United States and other UN Security Council members accuse Iran of trying to enrich uranium to develop atomic weapons. Iran says its enrichment program is for peaceful purposes.
Russia, which is building Iran's first nuclear power plant, has a significant stake in Iran's nuclear power program and has walked a delicate line in preserving its financial interests while pressuring Tehran to abandon its enrichment program.
Asked whether Russia could be trusted not to sell Australian uranium to Tehran, Putin said his mineral-rich country already had an "excessive" supply of military-grade uranium that it was reprocessing and selling to U.S. power plants.
"If we have a need to sell uranium to other countries, our resources, our own resources, are sufficient," Putin told reporters through a translator.
He said Russia planned to build an extra 30 nuclear power plants over the next two decades and needed Australian uranium to complete the expansion.
Australia has the world's largest reserves of uranium, but has no nuclear program of its own. Exporting uranium for nuclear power remains a touchy issue among many Australians, who are uneasy about its environmental impact and potential for weapons use.
Critics say the inflow of Australian uranium would allow Russia to divert its own supply of the atomic resource for military or export purposes.
"The problem is that there is no way of actually verifying what they do with it," Graeme Gill, a Russia expert from the Sydney University, told the Australian Broadcasting Corp.
Alexei Grigoryev, the acting director of Russia's state-owned nuclear exporter, Tekhsnabexport, said the deal could potentially enable Moscow to secure export contracts for low-enriched uranium worth $3 billion, including $2 billion in deals with Japan by 2015, RIA-Novosti reported.
Howard has rejected criticism of the Russian uranium deal, saying it is a logical progression from Australia's recent agreement to export atomic fuel to China to feed that country's growing energy needs.
The prime minister also dismissed concerns about Australian atomic fuel falling into Iran's hands, saying that any uranium sold under the deal would be "subject to very strict safeguards."
Russia has ambitious plans to expand its own nuclear sector and is seeking to secure a role as a major global hub for the nuclear materials and power industry.
The state nuclear agency indicated last year that Russia would increase spending on uranium prospecting and extraction tenfold by 2008, to 1 billion rubles, or $39 million, and is eager to help extract uranium in foreign countries.
Putin has called for the creation of a system of international centers that would enrich uranium to be used for civilian purposes by other countries while easing proliferation concerns, and Russia is developing a facility for this purpose in Siberia.