India, Australia Uranium Trade Deal Gingerly Inches Closer

Reviving the uranium trade between Australia and India was tops on the agenda of a meeting between the visiting Australian Prime Minister Julia Gillard and Indian Prime Minister Manmohan Singh in the Indian capital of New Delhi on Wednesday.

It was not as if Australia agreed to start selling uranium to India by the end of the high-level meeting, but the first baby steps in that direction have been taken.

Releasing a joint statement later, both sides announced they would launch talks on civil nuclear cooperation that would pave the way for the sale of uranium. The statement pointed out that this was a “prerequisite for uranium sales to other countries” by Australia.

For India, uranium is a much-needed commodity for its expanding civil nuclear power program, primarily for tackling the chronic electricity shortages in some of its states. Australia has 40 percent of the world’s known uranium reserves, and as expected, India is eyeing this stockpile.

According to media reports here, uranium exports would give a further boost to commercial relations between the two nations, whose bilateral trade has grown at a steady 13 percent annually in the last five years.

Incidentally, Australia is also the biggest supplier of coal to India, which powers much of India’s power plants for now.

The Australian prime minister also pointed out that Australian firms had expertise in transport, mining and environmental services. A host of corporate and business top guns accompanied the high-powered delegation from Australia, who interacted with top government officials and Indian businessmen.

For example, India’s GVK Power signed contracts worth US $2 billion with South Korea’s Samsung C&T and Australia’s Smithbridge Group to build a 60-million-ton-per-year Terminal 3 port for the Alpha Coal Project in the Queensland province of Australia.

The deal was inked in the presence of the Australian Prime Minister Julia Gillard and the Indian Commerce Minister Anand Sharma. The port is expected to be ready to deliver its first coal shipment 36 months after the plant’s commencement, somewhere by the end of 2015.

More on the deal upcoming in Part Two. 

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