September 8, 2008 ☼ Australia ☼ China ☼ Economy ☼ Foreign Affairs ☼ foreign investment ☼ India ☼ international relations ☼ non-proliferation ☼ nuclear power ☼ uranium

Uranium reservations

The Rudd government has created a window of opportunity for China to lock in Australia’s uranium supplies

This is an archived blog post from The Acorn.

Greg Sheridan writes that Australia’s policy on rejecting uranium sales to India will eventually change, but step by step.

Now, however, Australian policy suffers a serious contradiction. In supporting the deal, Australia is urging all other members of the international community to engage in full nuclear trade with India, including the supply of uranium, without which it will be impossible for India to build nuclear power stations.

Yet official Australian policy is that while it supports the deal and will engage in nuclear technology trade with India, it won’t supply uranium to the world’s biggest democracy because New Delhi is not a signatory to the NNPT.

This contradiction is, of course, madness. And make no mistake: while New Delhi fully understands Canberra’s position, deeply appreciates its support at the IAEA and the NSG and understands that the Rudd Government won’t support the various stages of the deal until they are actually agreed to, eventually a refusal by Australia to sell uranium to India, while selling it to China and Russia, would lead to deep trouble between Canberra and New Delhi.

That’s why eventually the Rudd Government will move away from its ban on uranium to India. Step by step, one stage at a time, in concert with the international community, but the destination of selling uranium to India is surely now inescapable as a result of the sensible decisions we’ve taken up to now. [The Australian]Having overturned its predecessor’s decision, the Rudd government has only set the clock back by a few years. This gives China the opportunity to lock in Australia’s uranium supplies, and Chinese state-owned firms are doing just that. China’s failed attempt to block the NSG’s waiver to nuclear trade with India should be seen in this context.

Discussing Australia’s domestic debate on regulating Chinese investment into the country’s natural resource sector, Lowy’s Mark Thirlwell argues that while changes to rules on foreign investment are not necessary, “the number of cases where foreign government ownership will represent a challenge to Australia’s national interest will turn out to be very small. But ‘very small’ is not the same as zero.” It is for thinking Australians to consider whether it is their interest to allow the Chinese government to buy into its uranium mines before Indian companies are even allowed to purchase the ore.

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