Fearless nadia slide

Australia’s uranium puzzle: Why China and Russia but not India?

Fearless nadia slide

In recent years Australia has finalised agreements to export uranium to China and Russia but not to a third great power, India. The uranium question has become a thorn in the side of Australia-India relations. In November 2011, Australian Prime Minister Julia Gillard at last declared publicly that she supported a policy shift to allow Canberra to negotiate the sale of uranium to India for electricity generation. This potential change would

bring Australia back to the position it had reached in 2007, when the then conservative government of John Howard briefly put Australia at the leading edge of the many
nations seeking strategic engagement with a rising India. This situation was immediately overturned by the Labor government of Kevin Rudd when it came to office that same year.

Since then, despite hints that Canberra would rethink its position, the issue has hindered wider progress in the Australia-India relationship, at a time when most nuclear supplier nations have begun pursuing legitimate nuclear commerce with New Delhi in line with the historic 2008 US-India nuclear deal and subsequent waiver by the Nuclear Suppliers Group. The India debate has dominated Australian official and public discussion of uranium export policy since 2006 and continues to limit one of Australia’s most important bilateral relationships in the Asian century. The prospect that the Australian Labor Party will finally review its stance on this issue at its national conference from 2-4 December 2011 makes it timely to re-examine the drivers of Australia’s uranium export policy.

This paper seeks to untangle the confusing array of factors in Canberra’s decisions about selling – or not selling – uranium to India. These include non-proliferation concerns, domestic pressures, bilateral relations, economic benefits and geopolitical considerations.1 The situation with regard to India is examined alongside Australia’s newfound willingness to do nuclear business with two other major powers, China and Russia. Australian government decisions to maintain a ban on uranium exports to India have been informed at least as much by domestic political pressures as by objective appraisals of non- proliferation impacts. Any future overturning of that ban will have much more to do with adjusting to geopolitical change and advancing bilateral relations than with reaping the modest economic benefits.

No single factor, including non-proliferation, can explain Canberra’s uranium policies with regard to China, Russia and India. The modest increases to profits and job-creation from increased uranium exports do not appear to be a large influence: Australia’s total uranium exports add up to less than one billion Australian dollars a year, less than half the value of, for instance, the nation’s dairy exports. On the other hand, bilateral relations and the geopolitics of a changing Asia are particularly important. Taken together, these factors suggest that a policy shift towards exporting uranium to India is just a matter of time.