Australia Eyes U.A.E. Uranium Talks

Published on Wednesday March 09 2011

SYDNEY—Australia will begin talks with the United Arab Emirates to sell the Middle East's second-largest Arab economy uranium for a planned US$20 billion nuclear power project in the sheikdom of Abu Dhabi.

Bilateral talks between the countries will focus on nuclear safeguards and the use of nuclear fuel for Abu Dhabi's civilian power program due to be ready by 2017, according to a statement by the Australian government.

"A bilateral safeguards agreement with Australia is a further strict non-proliferation condition that Australia requires for supplying uranium," Foreign Minister Kevin Rudd said in a statement.

The supply of uranium comes at a sensitive time for planned civilian nuclear power projects in the Arab Gulf states as the wider Middle East region continues to be roiled by civil unrest and protests. 

The U.A.E.'s neighboring state of Oman deployed its military last week to quell protesters in the port town of Sohar, 20 miles (about 32 kilometers) from the emirates' borders.

The U.A.E., which hosts the Australian military's Middle East headquarters, is an existing signatory to the nuclear non-proliferation treaty and has an additional protocol with the International Atomic Energy Agency governing its plans to build the plant.

Although rich with petroleum, the U.A.E is pushing to diversify away from hydrocarbons as forecasts show the country's demand for power far outstripping supply in coming decades. 

Late last year, the Emirates Nuclear Energy Corp., or Enec, the government body in charge of implementing the U.A.E.'s nuclear power plans, said it filed the construction license application for the planned Braka 1 and 2 atomic energy units with the country's Federal Authority for Nuclear Regulation.

There are currently 441 nuclear power reactors in operation globally with 58 under construction and a further 479 planned. Prices for uranium have recently surged on the back of Chinese demand and renewed interest from investors and hedge funds, according to analysts.

Australia currently has 22 bilateral nuclear safeguards agreements with 40 countries, including Taiwan, and holds around a third of the world's known uranium reserves. 

It is also the third-largest producer of uranium behind Kazakhstan and Canada, accounting for 16% of global output, according to the World Nuclear Association. Mining giant BHP Biliton controls the world's largest uranium deposit at Olympic Dam, South Australia.

While the compound in Australia is privately owned, some States operate restrictions barring its excavation. Until 2008, mining rich Western Australian banned uranium mining.

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