India will be the first country to buy Uranium from Australia despite not being a signatory to the Nuclear Non-Proliferation Treaty (NPT).
With the Australian Parliament ratifying the deal, commercial agreements will be signed shortly.
“We expect the commercial agreements to begin soon with the Australian Parliament now ratifying the deal. However, all that will depend on the right kind of price and availability. It could be tied up with other energy resources that we import from Australia. The supplies will begin by 2016,” a top official, involved in the talks, told BusinessLine.
The agreement was announced on the sidelines of the ongoing G-20 Summit in Turkey by Prime Minister Narendra Modi and his Australian counterpart Malcolm Turnbull. This comes after both sides signed a memorandum of understanding in September last year by former Australian Prime Minister Tony Abbott. “The administrative arrangement has now been finalised and the agreement entered into force. Basically it will allow India to import Uranium from Australia,” said Vikas Swarup, Joint Secretary (XP), Ministry of External Affairs.
According to the Australian government, the agreement makes it possible for Uranium exports to go ahead, something that was a “priority” for them.
However, neither of the sides commented on the status of the some of the contentious issues, which was impacted the deal earlier.
The issues were: enrichment of isotope 235 uranium which would be supplied to India, no provision for return of nuclear fuel, and use of excess fuel. While India wanted these issues to be untouched, Australia had been insisting on restrictions.
“It provides the framework for substantial new trade in an energy commodity over the medium to long term. The decision to supply uranium to India is a commercial one for Australian uranium exporters and Indian uranium customers,” a spokesperson of the Australian High Commission said.
Ever since MoU was signed last year, the process of ratification was a significant issue of concern for India, which is looking for more avenues to source Uranium to expand its nuclear energy programme.
The Nuclear Power Corporation of India Ltd (NPCIL) will now decide on the amount of uranium it requires and sign commercial agreements to source it from Australia. The agreement’s tenure is 40 years but either party can terminate it by giving one year’s notice.
N-power capacity
India currently has an installed capacity of 5,780 MW of nuclear power, including the 1,000 MW of electricity being generated by recently-inducted Unit-I at Kudankulam.
The second unit of the Kudankulam nuclear power plant having 1,000 MW capacity is soon expected to begin generation. Besides, there are five nuclear reactors that are under various stages of construction, which has total capacity of 3,300 MW.
Currently, India sources Uranium from Kazakhstan, Uzbekistan and Russia. It has a total requirement of around 1,000 tonne of a year. Australia has around 31 per cent of the world’s Uranium reserve. It also has some of the cheapest reserves.
