Australia seeking pact to sell uranium to Russia

By Staff
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SYDNEY, Apr 27 (Reuters) Australia is making progress in talks to sell uranium to Russia's burgeoning nuclear energy industry, the government said today, adding it would hold further talks in Moscow next month.

Russia plans to significantly expand its nuclear power industry over the next 10 years or so. Australia, with some of the world's richest deposits of the radioactive mineral has no nuclear power industry of its own.

A 1990 pact between the two countries allows enrichment of Australian uranium in Russia only on behalf of third countries.

A key factor in the decision to negotiate a new agreement was Russia's moves to separate its military and civil nuclear programs, and to place civil facilities under safeguards with the International Atomic Energy Agency, Australian Foreign Affairs Minister Alexander Downer said.

"Providing for uranium exports to Russia is consistent with the growing trade relationship between our two countries," Downer said in a statement.

The two sides held a first round of talks in Canberra this week.

A strengthening uranium price, which has more than doubled over the past year to about 113 per dollars pound has sent an army of prospectors into the Australian outback in hopes of pegging new discoveries.

The Australian Uranium Association says spending on uranium exploration has increased to around 75 million Australian dollars (62 million dollars) compared with 45 million Australian dollars in 2005.

Australian government opposition leaders this weekend will vote on a call to end a 25-year ban on digging new uranium mines beyond the three in operation, which could lead to a surge in Australian exports of yellowcake.

Uranium demand waned in the 1980s as cheap oil and other energy sources such as solar power compounded public perception that nuclear power was unsafe. Prices for uranium sank to as low as 10 dollars a pound.

With much of the surplus now gone, higher oil prices and growing environmental concerns about coal emissions, uranium has been making a comeback.

REUTERS KK VV1533

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