Australia, China Conclude Nuclear Deal

Paul Kerr

Australia and China April 3 concluded two agreements to increase nuclear cooperation. Although the agreements must still be ratified by each country before entering into force, they appear to pave the way for Canberra to help supply Beijing’s expanding nuclear power industry.

In doing so, Australia brushed aside domestic concerns that the agreement could indirectly augment China’s nuclear arsenal. Canberra also denied that it was planning to change policy and allow similar uranium sales to India.

Australian Foreign Minister Alexander Downer and Chinese Foreign Minster Li Zhaoxing signed the agreements, including relevant safeguards, governing the transfer of nuclear material from Australia to China, as well as cooperation on peaceful uses of nuclear energy. The agreements will enter into force 30 days after each side has fulfilled all relevant “domestic requirements.” They are to remain in force for an initial period of 30 years.

Beijing mines its own uranium but is trying to secure access to additional supplies as it seeks to increase its nuclear power-generating capacity to cope with increases in energy demand. Australia is the world’s second-largest producer of uranium, according to a 2004 report from the Organization for Economic Cooperation and Development and the International Atomic Energy Agency (IAEA).

It is not yet clear when the transfer would begin. Australia’s resource minister, Ian MacFarlane, said that Canberra is still “some distance” from exporting uranium to China, Xinhua Financial Network News reported April 3.

The agreements must enter into force before the uranium can be transferred, although contracts can be concluded before then. Downer stated April 3 that the agreements must still be reviewed by the Australian parliament but did not specify a date for the review. An Australian diplomat told Arms Control Today April 24 that “[t]he review process takes several months. At this stage, we do not have an estimate for when it will be completed.”

No specific nuclear cooperation agreements have yet been concluded. But such cooperation is “likely to include” research at a new reactor belonging to the Australian Nuclear Science and Technology Organization, according to a fact sheet from Australia’s Department of Foreign Affairs and Trade.

Canberra has declared repeatedly that the agreements will not help China augment its nuclear weapons arsenal. Downer stated April 3 that the agreements “establish strict safeguards arrangements and conditions” to ensure that Australian uranium, as well as “any collaborative programs in applications of nuclear technology…[are] used exclusively for peaceful purposes.”

According to the nuclear material supply agreement, China is not to use Australian nuclear material for “direct military applications,” such as fissile material for nuclear weapons or fuel for nuclear reactors used for powering naval ships or submarines.

China acceded to the nuclear Nonproliferation Treaty (NPT) in 1992 as a nuclear- weapon state. Australia will supply nuclear material only to Chinese nuclear power facilities under IAEA safeguards, which allow the agency to monitor those facilities to ensure they are not used for military purposes. Beijing’s military facilities are not under such safeguards, according to Australia’s foreign affairs department. Australia and China must still agree on a list of facilities that will receive uranium.

In the event that the IAEA stops administering its safeguards, the two countries can “arrange for the application of safeguards satisfactory to both parties.”

The nuclear material supply agreement also places other restrictions on China. For example, Beijing is required to obtain Canberra’s permission before reprocessing spent reactor fuel, producing uranium with a uranium-235 isotope concentration of 20 percent or more, or transferring nuclear material to countries that do not have a nuclear transfer agreement with Australia.

China currently enriches uranium for its nuclear reactors as well as for some of its nuclear weapons. Uranium used in weapons typically contains about 90 percent uranium-235.

Reprocessing spent reactor fuel can produce plutonium for use as fissile material or as fuel in certain specialized nuclear reactors. China does not currently use plutonium for reactor fuel, but it does use plutonium in its nuclear arsenal.

According to Australia’s foreign affairs department, Canberra can suspend or terminate the nuclear material transfer agreement if Beijing does not abide by either the agreement’s terms or by China’s IAEA safeguards arrangements.

Moreover, Australian officials denied that the deal would free up indigenous Chinese uranium and thereby help Beijing increase its arsenal. The officials noted that China is widely believed to have ceased production of fissile material for nuclear weapons. However, unlike the other four nuclear-weapon states under the NPT— France, Russia, the United Kingdom, and the United States— China has yet publicly to announce a moratorium on fissile material production.

Asked whether Australia plans to supply uranium to India, Downer said in an April 4 interview with Australian Broadcasting Corp. radio that the two countries could “certainly not” conclude such an agreement “under present circumstances.” Australian law prohibits Canberra from exporting uranium to countries that have not signed the NPT.

Washington has recently concluded an agreement with New Delhi that would allow India to obtain U.S.-supplied fuel for its nuclear reactors. Congress must still approve the Bush administration’s proposed changes to U.S. law, which currently prohibits such transfers (See "Congress Ponders Conditions for U.S.-Indian Deal").