The Australia-India uranium trade agreement, which could be worth up to $1.75 billion, is one step closer to being finalized. The Australian treaties committee cautiously supported the deal, as long as a list of safety regulations are met.
The committee recommended that no sale take place until the nuclear safety regulations are met and security at Indian nuclear facilities is addressed. The set of conditions that came with the approval included the establishment of an independent nuclear regulator in this country, separation of Delhi's civil and military nuclear facilities and the allowance of safety inspections.
According the World Nuclear News, India represents a major potential market for Australia's uranium, but India's status as a nuclear-armed country that has not signed the international Nuclear Non-Proliferation Treaty (NPT) complicates the situation.
While the agreement hasn't yet gone through, Australian Liberal-National MP Wyatt Roy told the Australian Broadcasting Corporation (ABC) that the deal could increase export revenue by $1.75 billion, almost double the size of Australia's uranium mining industry and would be especially lucrative for rural and remote areas.
"The agreement offers the potential for Australia to become on of the world's leaders in supplying fuel for low carbon emissions electrical power for expanding economies," Roy told the publication.
According to the World Nuclear Association, India has 21 nuclear reactors currently in operation, six currently under construction, 22 planned and an estimated 35 proposed. The South Asian country has a fast-growing nuclear power program and expects to have 14,600 MWe nuclear capacity on line by 2020. It aims to supply 25% of electricity from nuclear power by 2050.
Considering those numbers, it is evident India is going to need a fair amount of uranium to meet its growing nuclear needs. Mark Chalmers, chair of the Australian Uranium Council, told ABC that "Australia [could] certainly increase its uranium production, probably two or threefold from what it's currently producing," but admitted that the uranium price would have to almost double for Australian uranium miners to capitalize on the deal.
"Low uranium prices are plaguing Australia and other producers around the world and that's the number one impediment," Chalmers said.
The agreement between the Government of Australia and the Government of India was signed in September 2014. It was tabled before the bipartisan Joint Standing Committee on Treaties (JSCOT) in October.