uranium, page-3

China eyes uranium power plays
By Mandi Zonneveldt
17jul06

CHINA has begun sizing up Australian uranium companies in a bid to secure supplies of the nuclear fuel.

Senior representatives of four Chinese trading companies will attend a conference in Perth next week with a view to signing equity deals with Australian uranium explorers.

Xu Gang, chief China representative for Australian consultants Sustainability, who will host the Chinese delegates, told Business Daily the companies were already at various stages of discussion with Australian explorers.

He said off-take agreements would almost certainly form part of any deals negotiated.

China's bid to grab a slice of the sector follows the signing of an agreement in April allowing uranium to be exported to the energy-hungry Asian powerhouse.

China plans to build 40 new nuclear reactors by 2020 as the country's demand for power quadruples.

Federal Resources Minister Ian Macfarlane wants Australian uranium exports to double from about 10,000 tonnes a year to meet demand from China.

BHP Billiton is doing the numbers on a $6 billion expansion at Olympic Dam, with plans to double uranium output from the giant mine.

But pressure is mounting on the state Labor governments to lift their opposition to the development of new mines in Australia.

China is jostling for position ahead of an expected policy change next year.

China has invested hundreds of millions of dollars this year in its bid to shore up supplies of increasingly-expensive natural resources.

Chinese companies have been particularly active in the junior iron ore sector, prompted by hostile price negotiations with Australia's mining giants.

Sinosteel, the second largest steel producer in China, has agreements with MidWest, Cape Lambert Iron Ore and Jupiter Mines, while Gindalbie Metals has signed a deal with AnSteel that will see the Chinese company underwrite its mining operations.

Uranium explorer Uranex has already signed a deal with the China National Nuclear Corporation (CNNC), a state-owned body, to explore and develop uranium at its projects in Australia and Tanzania.

Mr Xu said China's involvement in Australian uranium would repeat the iron ore story.

He said Chinese companies were keen to get access to good exploration ground, however he said local knowledge was a big barrier.

"Most likely they will take part in activities of Australian uranium companies that they trust or companies that have (a) clear China background," he said.

High-level Chinese government officials will also be among the delegates at the Australian Uranium Conference next week.

The China Atomic Energy Authority, the state-owned regulatory body, will be represented, as will CNNC and the China Guangdong Nuclear Power Corporation, which is responsible for power plant construction in the southern province.

Conference co-ordinator Doug Bowie said the conference provided Australian uranium industry players with a rare opportunity to network directly with interested parties from China.