Australia reaches deal to sell uranium to China

SYDNEY, AUSTRALIA — SYDNEY, Australia --Australia, one of the closest U.S. allies, is scheduled to sign an agreement with China today to sell uranium for use in nuclear power plants in China's continuing drive to meet its soaring energy needs.

The deal also opens the door for Chinese investment in Australian uranium mines.


The agreement, negotiated over the last year in Beijing, is the highlight of a three-day trip to Australia by Prime Minister Wen Jiabao of China and underscores the importance of Australia as a base for China's widening demand for natural resources.

Wen spent yesterday in Western Australia, the state that provides much of the raw materials Australia exports to China.


Australia is scheduled to deliver its first liquid natural gas to China from the North West Shelf gas development in Western Australia in the next several months and is already one of China's biggest suppliers of iron ore. But because uranium is used in nuclear weapons, it is in a different category from that of other commodities.

The conservative government of Prime Minister John Howard has emphasized that China has agreed not to use Australian uranium in its weapons program, or for other military purposes.

The Australians also stress that China, unlike India, which the Bush administration agreed last month to provide with nuclear technology, has signed the Nuclear Nonproliferation Treaty.

Australia described the accord as a safeguards agreement that stipulated conditions for the sale and will be monitored by the International Atomic Energy Agency.

A senior Australian official in the Department of Foreign Affairs and Trade said yesterday that the United States was "hardly in a position" to criticize the sale of uranium for peaceful purposes to China after announcing that it would seek an exemption from Congress to sell fuel to India for its civilian nuclear plants.

Secretary of State Condoleezza Rice was informed of Australia's plans to sell uranium to China on her visit here last month.

"She simply listened to the fact we have negotiated an agreement within the framework" of the Nuclear Nonproliferation Treaty, the Australian official said.

An American specialist on nuclear issues, George Perkovich, who criticized the Bush administration's accord with India as allowing India to amass nuclear weapons, said he did not consider China a similar case. Unlike India, China had all the fissile nuclear material it needed for weapons, said Perkovich, the director of studies at the Carnegie Endowment for International Peace.


"There is every reason to think China will be using uranium for civilian uses," he said. "If you're a country that sells uranium to countries for nuclear power, there is no argument for not selling it to China."

The deal with China, which will be signed in the capital, Canberra, has been greeted with fanfare in Australia and was preceded by a long interview with Wen in the newspaper The Australian before he left Beijing.

Wen made clear that China's mounting economic relationship with Australia locked in an important American ally as an important Chinese friend as well. "We believe that countries which are allied with the United States can also be China's friends, and Australia is one of them," he said.

The Howard government, while supportive of the Bush administration in Iraq, has told the United States that it cannot count on Australia to be at its side in the event of a conflict with China over Taiwan.

The uranium accord comes as China tries to reduce its heavy reliance on fossil fuels. It has nine nuclear power reactors and has announced an ambitious program to build as many as three reactors a year.

Australia holds an estimated 40 percent of the world's reserves of easily extractable uranium and sells it in the form of uranium oxide to the United States, Canada and South Korea for use in civilian nuclear reactors.


The sale of uranium has long had opponents in Australia, who argue that because it is used in nuclear weapons it should be left in the ground. Australia has no nuclear power industry of its own, and uranium production has been limited to three operating mines.

The argument that nuclear power can help cut the emission of greenhouse gases has reduced opposition to the deal.