The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 17/10/2005

Doorstop Interview
Beijing, China

Monday, 17 October 2005
1.45 pm (Beijing time)

 

SUBJECTS: Uranium, energy, China

JOURNALIST:

(Inaudible). What does that mean?

TREASURER:

Well, it's plain that in the future the demands for energy and resources of China are only going to grow. And Australia has reserves of LNG, of coal, of uranium, and we could have one of the most buoyant markets in the world for products that Australia has an abundance of. And by opening up the supply of energy and resources from South to North Asia, from Australia to China, without stops, with reliable flow, which is guaranteed long-term, both countries could benefit.

JOURNALIST:

Is it appropriate, though, for Australia to be considering exporting uranium to a country like China which, after all, is an authoritarian system?

TREASURER:

Australia will only export uranium to countries which have signed up to nuclear safeguards. We have the strictest controls in the world and there will be no sales unless the countries do sign that. Such an agreement has not been entered into. But, if it were entered into - and the purpose of that agreement is to ensure that uranium is used only for energy purposes and not used for military purposes - if an agreement were entered, then we do have the capacity to export to China. Now, this would involve possible changes to the three mines policy back in Australia. But, provided controls are entered into, where it's strictly controlled in relation to transport, in relation to export licensing, and in relation to end use, Australia does have the capacity to supply a lot of energy needs in China.

JOURNALIST:

Why would it be necessary to change the three mines policy?

TREASURER:

Well, this can be a block on the ability to actually export. But that's a matter for Australia. Leave that aside. Australia currently supplies uranium to countries like France that do have nuclear capabilities. But our agreements are designed to ensure that Australian uranium is subject to the strictest controls, that it's safe, and that it's used for peaceful purposes. If China enters an agreement along those lines with Australia, then the option will be open to China as well.

JOURNALIST:

Would it be best, though, for Australia to dig up the uranium and export it to China, rather than having Chinese companies investing in doing that?

TREASURER:

Well, sure. The largest deposit of uranium in Australia at the moment is Roxby Downs. Roxby Downs is now owned by BHP-Billiton. BHP-Billiton has huge reserves and I'm sure that, under long-term contract, would be able to supply the demand in China.

JOURNALIST:

Can you see any objection to China buying into a mine like Roxby Downs?

TREASURER:

Look, we have foreign investment approval which requires anybody who buys an established Australian company to get screening and approval under the foreign investment policy that we operate. In addition to that, where it is a sovereign government, it's scrutinised even more carefully. So it's quite a difference between whether it's a private company or a sovereign government. Private companies are handled under FIRB and the existing law. Sovereign governments raise whole new policy questions which would have to be determined if it were a State-owned company that sought to engage in the activity. But, having said that, let me come back to the point I made earlier: There's no reason why anyone would have to buy a uranium mine in Australia because they can buy uranium from an Australian company BHP subject, of course, to entering into nuclear safeguards which ensure that it's used for peaceful purposes.

JOURNALIST:

Do you foresee a timeline of when Australia could begin uranium exports to China?

TREASURER:

Well it can't begin until such time as an agreement is entered into. And it would be after that. But such an agreement has not been entered into yet.

JOURNALIST:

But do you think it's just a question of when, rather than if?

TREASURER:

Well, if an agreement is entered into, then you would open the possibility. The point I would make is this: That Australia has something like 70 or 80 per cent of the world's proven uranium reserves. The largest deposit in Australia is Roxby Downs, now owned by BHP-Billiton. That company, with further investment, has the capacity to produce a lot of uranium which, if an agreement  a nuclear safeguards agreement were entered into, would allow China to buy it. But that's the point. The product is there. The miner is there. The only thing that's holding it back at the moment is the nuclear safeguards agreement.

All right. Thank you.