MAC: Mines and Communities

Australian uranium deal with India - a jobs and growth boom?

Published by MAC on 2015-09-11
Source: Climate Spectator (2015-09-15)

The decision by Australia's rightwing Abbott government to sell uranium to India is based on fraudulent statistics and a gross distortion of the pretended benefits of sales and jobs in the home country.

Not only have the figures been misrepresented, but India's nuclear expansion is currently in a state of "deep freeze".

These are the claims made by by Dr Jim Green of the World Information Centre of Energy (WISE), in a carefully researched article published by Australia's Climate Spectator on 10 September 2015.

But Dr Green points out that "Creative" accounting is the least of the problems with the Treaties Committee report. Much more important are "the proliferation, safety and security concerns associated with the proposal to sell uranium to a nuclear weapons state that is actively expanding its weapons arsenal and its missile capabilities while stubbornly refusing to sign the Comprehensive Test Ban Treaty".

Among a raft of those who have criticised the deal, he quotes Crispin Rovere, a nuclear arms control expert, who summarises "the Abbott government's willingness to sign Australia up as a spineless sycophant to big-power politics:

"In truth, this treaty appears less like the deepening of a bilateral partnership and more like one of a client state being dictated to in an expanded Indian empire. It is a major display of weakness on the part of the Australian Government, and a failure to stand up for Australia's national interests in this area".

As noted by MAC in earlier posts, most of the Australian uranium destined for India will come from mines owned by Rio Tinto and BHP Billiton.

Uranium deal with India - a jobs and growth boom?

Jim Green

Climate Spectator

11 September 2015

A September 8 media release by Wyatt Roy, Chair of federal Parliament's Joint Standing Committee on Treaties, states that selling uranium to India will double the size of the uranium mining industry in Australia and export revenue could amount to $1.75 billion.

But do Mr Roy's figures stack up? According to the World Nuclear Association, India's uranium demand this year will be 1,862 tonnes of uranium oxide. Australia supplies 11% of global demand, so if Australia supplies 11% of Indian demand that's an extra 205 tonnes. Exports would increase from 6,702 tonnes to 6,907 tonnes and revenue would increase by $19 million from $622 million to $641 million − an increase of 3%.

So how does Mr Roy turn a paltry 3% increase into a doubling of the size of the uranium industry? How does he turn $19 million into $1.75 billion?

Firstly, he indulges in absurd projections of the long-term growth of India's nuclear power industry. The Treaties Committee report says that India's nuclear power capacity is expected to grow exponentially from 5.3 gigawatts (GW) in 2014 to 1,094 GW in 2050. The 1,094 GW figure is taken from the Minerals Council of Australia (MCA), and the MCA in turn takes it from the World Nuclear Association. But the World Nuclear Association doesn't predict 1,094 GW of nuclear capacity, it predicts 1,094 GW of total "base-load capacity" across all fuels (Editor's note: including the MCA's 'amazing' coal that's lifting Indians out of poverty apparently). So Wyatt Roy and the Treaties Committee base their figures on a fabrication.

 They use another familiar accounting trick: instead of talking about annual export revenue, they talk about total revenue over many years − and fail to clarify the distinction so readers are left with the impression of $1.75 billion annual revenue. Which is exactly what The Age incorrectly reported.

Even with all those accounting tricks, you can't reach the $1.75 billion figure. That figure appears in the foreword to the Treaties Committee report but it isn't mentioned (or justified) in the body of the report. Most likely, the figure is based on some speculation from, yes, the MCA: "Australian uranium sales to India by 2030 could be between 1,000 and 2,000 tonnes, worth between $100 million and $225 million in export earnings. The total additional revenue through to 2030 could be between $750 million up to $1.5 billion to the Australian economy." Perhaps Wyatt Roy added GST to get from $1.5 billion to $1.75 billion.

Even the MCA's upper figure of $225 million annual revenue by 2030 only represents a 36% increase on 2013/14 uranium export revenue. So how do Wyatt Roy and the Treaties Committee conclude that revenue (and jobs) could double – the report doesn’t explain.

Other than the MCA's nonsense, figures provided in the Treaties Committee report sharply contradict Wyatt Roy's claims. For example the report cites an estimate by the Australian Safeguards and Non-Proliferation Office that India's uranium demand could reach 2,000 tonnes by 2025, valued at about $200 million. So if Australia secures 11% of that demand, annual revenue will be $22 million.

However India's nuclear program is in a "deep freeze" according to a November 2014 article in the Hindustan Times. India's energy minister Piyush Goyal said in November 2014 that the government remains "cautious" about developing nuclear power and he pointed to waning interest in the US and Europe: "This government would like to be cautious so that we are not saddled with something only under the garb of clean energy or alternate energy; something which the West has discarded and is sought to be brought to India."

A November 2014 article in The Hindu newspaper noted that three factors have put a brake on India's reactor import plans: "the exorbitant price of French- and U.S.-origin reactors, the accident-liability issue, and grass-roots opposition to the planned multi-reactor complexes."

 The Treaties Committee (other than a minority of dissenting members from the ALP and the Greens) has chosen to ignore the 'deep freeze' in India's nuclear power industry and to ignore the numerous obstacles to sustained growth.

 Wyatt Roy and the Treaties Committee report claim that uranium sales to India will nearly double the number of jobs in the uranium industry in Australia, from 4,200 to 8,000. Both figures are well wide of the mark. According to IBISWorld's March 2015 market report, 987 people are employed in Australia's uranium industry. Uranium exports would likely increase by 3% if sales to India proceed, and if we assume that jobs also increase by 3% that takes to the total up to 1,016 jobs − an increase of 29 jobs.

 Creative accounting is the least of the problems with the Treaties Committee report. Much more important are the proliferation, safety and security concerns associated with the proposal to sell uranium to a nuclear weapons state that is actively expanding its weapons arsenal and its missile capabilities while stubbornly refusing to sign the Comprehensive Test Ban Treaty.

 The Treaties Committee's inquiry into proposed uranium sales to India was unusual in that it received strongly critical submissions from a who's who of nuclear arms control diplomats and experts − all of them with impeccable pro-nuclear credentials. Those raising concerns and objections included John Carlson, Director-General of the Australian Safeguards and Non-Proliferation Office from 1989 to 2010 (and currently a member of the Expert Panel assisting the South Australian Nuclear Fuel Cycle Royal Commission); Ron Walker, former Chair of the International Atomic Energy Agency's Board of Governors; Prof. Lawrence Scheinman, former Assistant Director of the US Arms Control and Disarmament Agency; and nuclear arms control expert Crispin Rovere. Previously, former Defence Department Secretary Paul Barratt has raised concerns.

Crispin Rovere neatly summarised the Abbott government's willingness to sign Australia up as a spineless sycophant to big-power politics:

The text of this Australia–India nuclear agreement accords entirely with Indian preferences rather than well-established best practice. In truth, this treaty appears less like the deepening of a bilateral partnership and more like one of a client state being dictated to in an expanded Indian empire. It is a major display of weakness on the part of the Australian Government, and a failure to stand up for Australia's national interests in this area.

Dr Jim Green is the national nuclear campaigner with Friends of the Earth, Australia, and editor of the World Information Service on Energy's Nuclear Monitor newsletter.

Home | About Us | Companies | Countries | Minerals | Contact Us
© Mines and Communities 2013. Web site by Zippy Info