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#4650, 8 September 2014

Nuke Street

India-Australia Nuclear Agreement: Bespeaking of a New Age
Sheel Kant Sharma
Former Permanent Representative to UN Office in Vienna & IAEA

The conclusion of a nuclear cooperation agreement between India and Australia last week is indeed a landmark achievement for their bilateral relations. Before leaving for his India visit, Australian Prime Minister Tony Abbott was confident of reaching an agreement with India as he stated in Canberra that “We ought to be prepared to provide uranium to India under suitable safeguards.” Considering the chasm that separated their positions twenty years ago on the main issues in the global nuclear mainstream, Abbot’s statement bespeaks of a coming of age. He declared in India that “…there is a very high level of trust between us, and that is why we are signing this agreement.” Australia has provided full assurance that it will be a long-term reliable supplier of uranium to India. Australia also supports India’s joining the Nuclear Suppliers Group (NSG) as a member.

The agreement will also cover other key areas in nuclear technology such as supply of isotopes and cooperation in regard to nuclear safety. Although Australia does not run nuclear power plants, it has an extensive nuclear enterprise comprising not only mining but also research in diverse areas including, for example, on making the safeguards system more effective. It is to the credit of India’s nuclear program that it receives recognition from Australia in unequivocal terms, like “trust” and scrupulous adherence to international laws “regardless of the ups and downs of the political situation in New Delhi.” This level of understanding and confluence of mutual interest takes the relationship to a truly strategic scale of cooperation; energy being central to it.

Looking at Australia’s immense natural resources and the vast unpolluted continent that lies at its disposal, Canberra’s role and profile in international arena in the coming decades will certainly grow much bigger. So far, it has played a modest role in the Asia Pacific compared to its potential albeit as a dependable and steadfast US ally and a robust economic partner for ASEAN and China. India and Australia, as the Joint Statement issued after the prime minister’s visit demonstrates, are set to do a whole lot of things together for mutual benefit. The nuclear accord encapsulates and symbolises that coming together just as the seminal agreement between India and the US did in 2006. In recent years, a definitive sense has emerged in the Australian worldview that a strong and prosperous India will be a factor for peace and stability in Asia and the world.  

Coming to the uranium metal, its fortunes fluctuate wildly depending on the temperamental swings of the mass psychosis about “radiation” on the one hand and the inexorable push of nuclear power as a relatively cleaner and sustainable energy option for the energy hungry planet. From its highs in the short years of nuclear renaissance in the middle of last decade, uranium prices have come down to nearly half that peak post the Fukushima disaster and subsequent sharp retardation in nuclear power prospect – not only in Japan and Germany but also in liability-obsessed India. India’s vacillation on nuclear power projects is particularly shocking since its power needs today exceed its production by figures that approach a 100000 Megawatt and even coal fired thermal plant capacity languishing in shortfalls as big as 90000 Megawatt due to fuel crunch, according to some estimates. It is significant that Australia has come forward as a reliable supplier not only for nuclear fuel but also for coal.

An uninterrupted supply of uranium and its augmentation to meet the requirements in Indian nuclear power plants will also raise their capacity factors to record highs.

As it is the global openings since the US deal have brought enormous improvements in fuel situation and the Rawatbhata nuclear power plant units today can boast of achieving a global peak in continuous, unbroken running of a plant.
Australia has, along with its neighbour, New Zealand, considerable moral clout in the realm of global nuclear and advanced technology. India should benefit from the Australian leverage for its entry in the NSG – Australia has kept the nuclear option out for meeting its power needs despite its vast uranium resources.

So, its support may hopefully carry greater clout with conscientious objectors of nuclear power like New Zealand, Austria and Ireland that are not easily persuaded to relax the rules for India. The commercial factor in uranium deals, while important for the Australian mining industry, is hardly so big as to be accused of driving its government’s stance in the energy debate. The environmentalists, as Prime Minister Abbott has stated, are a highly significant lobby in Australia – that constantly oversees the mining industry to ensure that the green standards are observed to the utmost level of satisfaction.

It now remains for the company representatives from both sides to thrash out the details of contract terms for supply of uranium. India’s Nuclear Power Cooperation Limited has been keen to build lifetime inventories for suitably safeguarded nuclear plants and would naturally want to obtain long-term supply guarantees. This should not pose a problem to arrive at, given the India’s record commitment to its safeguards obligations.   

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