Australian Prime Minister Julia Gillard is pushing to revoke a ban on selling uranium to India, potentially widening access to the scarce resource for India’s ambitious nuclear energy programme and untying knots in bilateral relations.
Gillard made her thoughts public in an article published Tuesday in the Sydney Morning Herald ahead of next month’s meeting of her Labor Party. She urged her colleagues to drop their support for the ban, describing India as a close partner.
“I believe the time has come for the Labor Party to change this position. Selling uranium to India will be good for the Australian economy and good for jobs,” Gillard told reporters. “This will be one way we can take another step forward in our relationship with India.”
India, the second fastest growing of the world’s major economies, is heavily dependent on fuel imports and is seeking to diversify its energy basket to power economic growth. It aims to upgrade its nuclear power generation capacity to 20,000 megawatts (MW) by 2020, from 5,000MW now.
Australia has nearly 40% of the world’s known uranium reserves, but supplies only 19% of the world market. It has no nuclear power stations.
India’s foreign minister S.M. Krishna welcomed the initiative. Australia has recognized “our growing energy needs, our impeccable non-proliferation record, and the strategic partnership between our two countries”, he said in a statement. “We attach importance to our relations with Australia, which are growing across the board. Energy is one of the key areas of bilateral cooperation.” Bilateral trade between India and Australia is worth about $20 billion (around Rs.1 trillion) a year.
Gillard’s Labor Party, on coming to power in 2007, suspended talks the previous administration was having with India on the sale of uranium, the main source of fuel in a nuclear reactor. Its main objection was that India was not a signatory to the Nuclear Non-Proliferation Treaty that forbids countries from sharing or trading nuclear technology and material with non-signatory states.
In 2008, India concluded a landmark civil nuclear energy deal with the US that enables it to acquire sensitive technology and source atomic power plants from international vendors.
Under the terms of the deal, India agreed to separate its civilian and military programmes, and to use the technology and resources acquired from abroad only for civilian purposes. Following that, India has entered pacts with many countries, including Canada and the Central Asian republic of Kazakhstan to source uranium for its civil nuclear programme.
Australia supported the US-India nuclear agreement as a member of the Nuclear Supplier’s Group, but had continued to refuse to sell uranium to India. “It is time for Labor to modernize our platform and enable us to strengthen our connection with dynamic, democratic India,” Gillard wrote in her article.
Australia has four mines—BHP Billiton Ltd’s Olympic Dam, potentially the world’s biggest; Energy Resources of Australia Ltd’s Ranger mine; the Beverly mine, owned by US company General Atomics; and Honeymoon mines, owned by Uranium One and Mitsui and Co. Ltd
C.U. Bhaskar, a former head of the National Maritime Foundation think-tank in New Delhi, said the nuclear issue has been a “knot in bilateral relations” between India and Australia.
“It had become a bipolar issue with the John Howard government in talks for the sale of uranium to India and the Labor Party opposed to it... Now Australia seems to be in the middle of a holistic review of its policies vis-a-vis Asia and India in particular,” he said.
The Labor Party will debate lifting the ban at its conference next month. The move should easily pass with support from Labor’s dominant Right faction. The policy does not need to go to Parliament for approval, but the conservative opposition also supports uranium sales to India.
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