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Last Updated: Monday, 3 April 2006, 09:17 GMT 10:17 UK
China to buy Australian uranium
Uranium mine in Kakadu national park
Australia has three working uranium mines, one in a national park
Australia and China have signed a nuclear deal allowing Beijing to import Australian uranium for power stations.

The agreement was signed under the gaze of both countries' prime ministers.

Australia, which has 40% of the world's known uranium deposits, sells uranium only to members of the Nuclear Non-Proliferation Treaty.

The two countries had previously failed to agree a deal amid concerns China would use the uranium in its nuclear weapons programme.

No relationship has been more greatly transformed over the last 10 years than our relationship with China
John Howard
Australian Prime Minister

Australia insists that potential uranium buyers must agree to a separate bilateral deal stipulating that they will not divert nuclear fuel into weapons programmes.

Australian Prime Minister John Howard and his Chinese counterpart, Premier Wen Jiabao - on a four-day visit to the country - looked on as their foreign ministers signed the pacts.

Australian Foreign Minister Alexander Downer stressed the importance of ensuring the uranium would never be used in military schemes.

"These agreements establish strict safeguards, arrangements and conditions to ensure Australian uranium supplied to China, and any collaborative programmes in applications of nuclear technology, is used exclusively for peaceful purposes," he said.

Good relations

Under the terms of the deal, Australia will export 20,000 metric tons of uranium to China each year, beginning in 2010, the AFP news agency reports.


Both prime ministers praised the nuclear deals, which were among eight bilateral agreements signed on Monday.

"Of all the important relationships that Australia has with other countries, none has been more greatly transformed over the last 10 years than our relationship with China," said Mr Howard.

Mr Wen said Sino-Australian relations were currently at an all-time high.

"There are no issues left over from history and there are no cultural matters standing in the way of our bilateral relations," he added.

Environmental and opposition groups criticised the deal, suggesting that a guarantee of Australian uranium would allow Beijing to earmark more domestically-produced uranium for its nuclear weapons programme.

Mr Downer dismissed the argument, telling Australian radio the deal "is not going to make the slightest difference" to the Chinese weapons programme.

Energy needs

China is desperate for energy to fuel its booming economy, the BBC's Daniel Griffiths reports from Beijing.

Fossil fuels currently provide 80% of energy
Hydro-electric projects provide 18% of energy
Nuclear energy from nine reactors currently supplies 2%
Plans for 30 new reactors to be built by 2020
Nuclear power to account for 4% of national output by 2020
Sources: World Nuclear Association and Reuters

The old coal mines that the country relies on cannot keep up with demand and there is not enough oil to go around.

With power shortages and blackouts in big cities common, the government is looking for new sources of energy and nuclear is top of the list.

Beijing wants to build 40 to 50 nuclear reactors over the next 20 years and a steady supply of uranium is vital.

The Chinese premier also confirmed on Monday that his country was negotiating a free trade deal with Australia.

The aim, he said, was to lay the foundation for reaching an overall free trade agreement within two years.

Australian Trade Minister Mark Vaile said there were "sensitivities" about the talks but Australia and China were "committed to working through the complex issues to achieve a positive outcome".

Australia and China sign the uranium agreement

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