INDIA and Australia have finalized a deal that will see India import uranium from Australia for civilian purposes. The India Australia Civil Nuclear Agreement deal took three years to come to fruition and was announced in November by the Prime Ministers of the two countries, Narendra Modi and Malcolm Turnbull, while they were attending the G20 summit in Turkey.
The seeds of this arrangement were sown in 2012 by then Australian PM Julia Gillard, who promised during an Indian state visit to supply uranium to India. It was proposed due to the severe shortages of electricity which continue to hinder the developing nation.
Two years later the previous Australian PM Tony Abbott signed a memorandum of understanding for ‘Cooperation in the Peaceful Uses of Nuclear Energy’ whereby Australia would become a long-term supplier of uranium to India.
Australia has about 40% of the world’s uranium reserves and is the number three producer of the nuclear fuel, behind Kazakhstan and Canada.
The agreement will see India become the first country to buy yellowcake from Australia that has not signed the international treaty to prevent the spread of nuclear weapons. While India faced Western sanctions in 1998 after testing nuclear weapons, these were lifted after a deal with the USA in 2008 that included safeguards agaiindinst using the nuclear fuel for weapons production.
According to the World Nuclear Association, India has 21 operating reactors with a capacity of 4780 megawatts, or 2% of India’s total power supply. It plans to increase its nuclear capacity to 63,000 MW by 2032, by adding close to 30 reactors at a cost of $85 billion. As a result India is seeking agreements with foreign countries on top of the nuclear agreements it has with 11 countries and deals to import uranium from Russia, France, Kazakhstan and Canada.
Concerned about running out of nuclear fuel, in July India created a strategic uranium reserve to ensure its atomic reactors can keep producing electricity without interruption.
An Australian parliamentary committee that supported the deal said in September that the arrangement could increase export revenues by $1.75 billion.
Australian Uranium Council chair Mark Chalmers told the media that Australia could double or triple its uranium production to meet India’s needs, although for that to happen, the price of uranium would have to almost double.