While in India, Australia’s Prime Minister Tony Abbott was expected to sign a deal to sell Australian uranium that will be the single most significant advance in bilateral relations in decades. The journey to get to this point has been tortuous and the controversy is unlikely to fade anytime soon.
The main impetus for the change in Australia’s policy came from geopolitical changes (the re-emergence of China and India as major players and the relative decline of the United States) and the increased importance of the bilateral relationship with India rather than commercial calculations.
Nuclear energy is used by about 30 countries to generate 11 percent of the world’s electricity, with almost zero greenhouse gas emissions. Currently there are 437 operating reactors and around 70 under construction.
Nuclear energy is tipped to grow between 23 and 100 percent by 2030 (the long-term impact of the March 2011 Fukushima disaster remains impossible to predict with certainty). Most of the growth in nuclear energy will be in Asia (China, India, Indonesia, Malaysia, Pakistan, Thailand and Vietnam).
The world’s current total requirement for uranium is 66,000 tons (all figures are rounded). The biggest users are the U.S. (19,000 tons) and France (10,000 tons). India’s uranium requirement is 1,000 tons, compared to 6,000 for China and 5,500 for Russia.
In Asia, the other big uranium consumers are South Korea (5,000 tons) where nuclear energy accounts for 28 percent of electricity generation, and Japan (2,000 tons in 2014) where nuclear energy produced 29 percent of electricity before the Fukushima accident; it has fallen to below 2 percent.
Australia has 31 percent of the world’s uranium reserves, but its share of the global uranium market is only 12 percent. The policy framework for the export of Australian uranium was set in the 1970s.
The Nuclear Non-Proliferation Treaty (NPT) obliges Australia to facilitate the peaceful uses of nuclear energy, but uranium sales would be restricted to countries that could satisfy Canberra that it would not be diverted to noncivilian purposes. For this, recipients had to be in good nonproliferation standing and conclude a bilateral safeguards agreement to account for the use of Australian uranium and nuclear material produced from it.
Uranium processed at Australian mines must go through three more processes (conversion, enrichment, fuel fabrication) before it can be used in a nuclear reactor. The high-energy density of uranium fuel means that a 1,000 MWe nuclear reactor requires 27 tons of fresh fuel each year, compared to a coal power station that requires more than 2.5 million tons of coal to produce equivalent electricity.
