After India and Australia signed a civil nuclear deal in September, Australia’s uranium industry may be able to start sending trial shipments to India next year.
Australian Prime Minister Tony Abbott and his Indian counterpart, Narendra Modi, discussed this during the latter’s visit to Australia. On Tuesday Abbott addressed the federal parliament saying if everything went to plan, uranium exports from Australia to India with suitable safeguards would start, “because cleaner energy is one of the most important contributions that Australia can make to the wider world.”
The move follows the signing of a safeguards agreement in New Delhi, as reported by MetalMiner after years of a ban on uranium exports to India.
India plans to use uranium to fuel its nuclear reactors to take care of about 25% of its total electricity needs by 2050.
Modi told the Australian Parliament that he saw Australia as a major partner in India’s quest to boost electricity production and address climate change.
The September agreement is currently under scrutiny by Australia’s parliamentary treaties committee, according to a report in the The Age.
Before the first batch of uranium is headed to India’s shores, both the treaties and the administrative arrangements must be finalized. When it does, it will bring the curtain down on years of effort on the part of the Indians to procure uranium from down under. Way back in 2012, for example, we at MetalMiner reported how both nations had taken the first baby steps in reviving trade, though under a different Australian Prime Minister, Julia Gillard, and the then-PM of India Manmohan Singh.
India is starved of coal supply for its electricity plants, and by design, is veering to nuclear power to fill the demand-supply gap. It wants to raise its nuclear energy capacity to 63,000 million watts by 2032. India currently has 20 small nuclear reactors within six plants but operates only a few.
An estimate by The International Energy Agency says that while nuclear power takes care of 3% of India’s power today, it was expected to grow to 12% by 2030. The total investment this entails: an estimated $96 billion in nuclear plants by 2040.
For Australia, under the leadership of Abbott, the new deal with India will rake in AUS dollars since it has the world’s largest share of uranium resources but currently exports only 8,400 tons per year.
Its agreement with India is not without problems. It was sharply criticized by Australia’s mainline press and even the Greens, since India has steadfastly refused to sign the Nuclear Non-Proliferation Treaty.
Incidentally, Australia is also emerging as a key supplier of thermal coal for India’s growing number of electricity users. Indian company Adani Enterprises had earlier this year, bagged the approximate $16 billion Carmichael coal mine, rail and port project.
In today’s era of newfound trade love between India and Australia, the two nations were also actively working toward the signing of a Free Trade Agreement (FTA). Going by the current pace, that could be in place by the end of next year, giving Australia access to one of the world’s largest markets.
Just prior to Modi’s Australian visit, Australia had announced the finalization of a similar FTA with China. Currently, bilateral trade between Australia and India is about $15 billion a year, which, compared to China, is quite low. And this is something the Indians and the Australians are now eager to work on.
In 2013, India’s trade with Australia fell by an annual rate of nearly 14%, the lowest in 5 years. In the same year, China’s trade with the country was at $131.25 billion.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.