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Uranium Supplies: Lack of ‘viability of proposals’, DAE drops offers by two Australian cos

India-Australia ties have been on an upswing since 2012, when the Australian government decided to sell uranium to India despite India not being a signatory to the nuclear Non Proliferation Treaty, which was formalised by way of a bilateral agreement in 2014.

Written by Anil Sasi | New Delhi | Updated: October 15, 2020 9:46:41 am
n After proposals by BHP Billiton and Heathgate Resources for supply of uranium ore concentrate were examined, it was conveyed to the Australian side “it is not possible to proceed with the supply contract in the present form,” an official said.

Over two years after the initiation of formal discussions with two Australian companies — BHP Billiton and Heathgate Resources — for commencing supply of uranium ore concentrate, the Department of Atomic Energy (DAE) has turned down the offers submitted by the two companies citing lack of viability of the proposals. The offers were aimed at ensuring Australian companies potentially join utilities from four other countries that are already supplying nuclear fuel to India and were being projected as a tangible marker of improving bilateral and strategic relations between the two nations.

India-Australia ties have been on an upswing since 2012, when the Australian government decided to sell uranium to India despite India not being a signatory to the nuclear Non Proliferation Treaty, which was formalised by way of a bilateral agreement in 2014. After the proposals by BHP Billiton and Heathgate Resources for supply of uranium ore concentrate from Australia were examined, it has been conveyed to the Australian side that “it is not possible to proceed with the supply contract in the present form,” a government official involved in the exercise said.

BHP Billiton, the world’s biggest mining company, and Quasar Resources, an affiliate of Adelaide-based Heathgate Resources (owned by US company General Atomics), were in discussion for signing up on a sales contract for enabling the uranium transfer, which is part of the commercial negotiations between Australian uranium vendors and the DAE on fuel contracts for civil nuclear-power generation.

Canberra’s overturning of a ban on uranium sales to India was seen as a removal of a diplomatic thorn between the two nations, potentially opening up a new and growing market for Australian suppliers. But progress has been slack, despite efforts from both sides. In November 2018, Australia’s Trade and Investment Minister Simon Birmingham had indicated to this newspaper that both countries were making “real progress” on the issue of uranium exports to India. In June this year, India and Australia had decided to elevate their relationship to a ‘Comprehensive Strategic Partnership’ after a “virtual summit” between Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison.

Responding to a query on the uranium supply issue, a spokesperson for Australia’s Department of Industry, Science, Energy and Resources said: “Australia is keen to sell uranium to India to help meet India’s growing energy demands. As yet, there have been no commercial sales to India of Australian uranium … The September 2014 Agreement between Australia and India on Cooperation in the Peaceful Uses of Nuclear Energy (the Agreement) provides for the supply of Australian uranium for use in India’s civilian nuclear power programme, subject to both countries’ requirements being met.”

Former Australian Prime Minister Tony Abbott had signed an agreement with Prime Minister Modi on civil nuclear cooperation in September 2014, clearing the way for potential uranium sales to India.

Incidentally, in July 2017, Australia had sent its first uranium shipment to India but that was cited as “a small sample of uranium” transferred “purely for testing purposes”. Potential uranium imports from Australia would be used to meet fuel requirements of Indian nuclear reactors that are under International Atomic Energy Agency (IAEA) safeguards, as is the case with fuel imports that have come in so far from Russia’s JSC TVEL Corp, Kazakhstan’s JSC NAC KazatomProm, France’s Areva and Canada’s Cameco.

India currently has 22 reactors with an installed capacity of 6,780 MWe (mega watt electric). Of these, eight reactors are fuelled by indigenous uranium while the remaining 14 are under IAEA Safeguards and qualify to use imported uranium. A steady supply of uranium is expected to boost the performance of Indian nuclear power plants, as well as of several fuel cycle facilities.

Under the “separation plan” announced by the Centre in March 2006, negotiated after the July 2005 nuclear deal with the US, India was required to bring 14 reactors under IAEA safeguards in a phased manner. Thirteen of these reactors, including RAPS 2 to 6 at Rawatbhata, Rajasthan; KAPS 1 and 2 at Kakrapar, Gujarat; NAPS 1 and 2 at Narora, Uttar Pradesh; TAPS 1 and 2 at Tarapur, Maharashtra; Kudankulam 1 and 2 in Tamil Nadu; are already under IAEA safeguards, and eligible to run on imported fuel.

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