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ASNO on uranium sales, Burma and Olympic Dam expansion

Estimates & Committees
Scott Ludlam 23 Oct 2011

CHAIR: Thank you, Senator Eggleston. With the permission of the rest of the committee we will move through to national security, nuclear disarmament and non-proliferation. Senator Ludlam.

Senator LUDLAM: I thank the committee for the opportunity to not send these gentlemen home empty-handed. I want to quickly go through a couple of issues relating to uranium sales in various parts of the world, which is a big part of your mandate. Do you care to comment on recent media reports that Australia and India have begun a dialogue that is likely to include discussion over future uranium sales to India? First of all, have you taken part in that dialogue-if, indeed, it is occurring-and what part have you taken?

Dr Floyd : I have not been involved in any such dialogues.

Mr McKinnon : I am not aware of any such dialogue and I have not been involved in any such dialogue.

Senator LUDLAM: I can even tell you that it is called the resources supply security dialogue-it is not merely rumoured; it has a name. But neither of you has come across that?

Dr Floyd : I am aware of that.

Mr McKinnon : We are aware of that dialogue.

Senator LUDLAM: But there is no subtext or conversation relating to uranium sales to India?

Dr Floyd : I am not aware of any.

Mr McKinnon : My understanding is that it covered the broad gamut of all energy markets and energy developments in the normal way that an energy dialogue would.

Senator LUDLAM: Presumably that includes the nuclear fuel market. That is a part of energy dialogue.

Mr McKinnon : I would just say that I do not have specific knowledge of it, I did not see any briefing for it and I was not party to it. I was just aware that there was a broad energy dialogue.

Senator LUDLAM: I am just trying to get a sense of this. Mr Richardson, would you like to add anything?

Mr Richardson : No.

Senator LUDLAM: If this debate is going on-and perhaps the media reports are in error-it is going on without the advice of our non-proliferation and disarmament specialists. I just wanted to get that clear.

Mr Richardson : We might add a confirmation for you from Mr Stuart. He is more familiar with it.

Mr Stuart : The dialogue which I think you are referring to is a strategic discussion. It is on resource security and it has been established-it met for the first time this year-in conjunction with the longstanding joint working group on energy and resources that Australia and India conduct.

Senator LUDLAM: Thank you very much for providing that clarification. As part of those discussions and that dialogue as it is ongoing, has the issue of uranium sales to India been raised either by the Australians or by the Indians?

Mr Stuart : Not to my knowledge.

Senator LUDLAM: That is not quite unequivocal, but it is reasonable. Could I ask all four of you who have addressed that question to go back to the record and correct it on notice.

Mr Richardson : We will take it on notice and ensure that what we have provided you is in fact correct.

Senator LUDLAM: Thank you. So ASNO has not yet been asked to provide or provided advice-stepping outside the context of that bilateral dialogue-in relation to current government policy on uranium sales to India in the broader context?

Dr Floyd : That is correct. ASNO has not been asked for advice on that issue.

Senator LUDLAM: At some stage I hope they will be, because these conversations are going on somewhere and they are happening without the expert-you. I will park that there. The second issue I want to go to is around the proposed Olympic Dam expansion. I think we addressed this in May. You said at the time you did not have a trigger-you did not have anything on which to base discussions or negotiations with your counterpart in China. We now do have a proposal; the direction in which BHP Billiton is intending to head is fairly clear. Has that provided you with the trigger that you need to get started?

Dr Floyd : We have not had any approach from BHP Billiton on their plans to do with the processing of the copper ore concentrate, which would have significant amounts of uranium mixed with it. My knowledge on this issue is that they are considering a range of options and we are waiting until they have become more clear of what options they might pursue before we engage further with the Chinese officials.

Senator LUDLAM: I think that certainly would have been accurate in very early June when we spoke on this last time. There is now a single proposal on the table. We have the feedback from the environmental regulators. BHP is not looking at any alternative plant configurations there, as you have intimated, proposing to export a radioactive copper concentrate to China. There is no longer, really, a range of options. Where you said that you were advised that there were still a range of options-where is that advice coming from?

Dr Floyd : The latest discussions that I had with BHP Billiton predate 10 October and the environmental approvals which came through from the Commonwealth and from the state of South Australia. BHP Billiton have not been in touch with us since then to talk about their interests and needs.

Senator LUDLAM: What is the legislated process of cause and effect? Do you have to wait until you get a referral from them or can you initiate discussions with a company?

Dr Floyd : It is not as firm as a legislative process but our normal posture on these things is that we are approached by companies or countries which are interested in us establishing bilateral agreements or, in this case, making sure that our bilateral agreement could accommodate such a model. We do not generally go out pursuing those kinds of issues and the industry, to date, has been very happy with that approach-where they come to us as they see particular opportunity or need.

Senator LUDLAM: What I do not want to hear at one of these sessions is that suddenly the hammer has come down-the company is in a enormous rush and you have been given a very short deadline to do what is going to be complex and very important work. My fear is that, in leaving it all up to the proponent to decide these time lines-your work is going to be specialised and may take quite some time-you may find that there are unacceptable proliferation risks and have to report that back to the minister. I am just putting you on notice that sometimes proponent driven deadlines are purely commercial, while your work is going to have to be far more nuanced.

Dr Floyd : We would strongly concur with your statements. We would not like to see something come to us-for detailed analysis and what could be difficult negotiations-with unseemly time lines either. We are certainly of one mind with you on that. The discussions with another country will take a certain amount of time and they just cannot be rushed. BHP Billiton are well aware of that.

Senator LUDLAM: Could you please take this on notice-to table a list, if there is more than one, of facilities in China which are approved by the Australian government to process Australian uranium oxide? Also, since there is no real precedent for a sale of a radioactive concentrate-we sell uranium oxide in a couple of different forms, but at no point in the past have we sold a preprocessed or smelted material to another country for them to deal with the consequential waste issues-what responsibility do you think Australian should take for the downstream waste product which would otherwise have accrued to the company here in Australia? Again, you can take that on notice.

Dr Floyd : We are happy to take your questions on notice.

 

 

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