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India and Australia have signed a civil nuclear agreement but the deal raises a number of crucial questions.
For instance, will Australian companies get a stake in projects here? Or, what of the riders on spent fuel?
As a senior official of Nuclear Power Corporation of India Ltd (NPCIL) told BusinessLine , only a broad agreement has been inked. “Only after discussions between the entities involved in the projects start will we know the actual structure of the deal (how the trade takes place).”
On September 5, during Australian Prime Minister Tony Abbott’s visit to India, the two nations sealed a civil nuclear deal.
In a statement, Abbott had said that the agreement would enable the sale of Australian uranium to support India’s growing energy needs and had directed the negotiators to conclude the Administrative Arrangements at an early date.
Possible dealbreakers According to some experts, if Australia insists on conditions like those put by Japan, such as no reprocessing of spent fuel and compulsory return of components supplied in case the country carries out a nuclear test, they could be deal breakers.
But Government sources say it is still premature to talk about these issues.
A commitment on the use of nuclear energy has been a key factor in such negotiations between countries.
India is the first customer to get Australian uranium without being a signatory to the nuclear non-proliferation treaty.
India has nuclear energy agreements with 11 countries and imports uranium from France, Russia and Kazakhstan. In the last three years, the fuel has come mainly from Kazakhstan and Russia.
The country operates 20 mostly small reactors at six sites, with a capacity of 4,780 MW or 3.14 per cent of the country’s total power capacity.
Indigenous uranium is used by 10 nuclear power reactors with an installed capacity of 2,840 MW.
The generation is generally lower because of a mismatch between demand and supply of domestic uranium, according to the Department of Atomic Energy.
NPCIL hopes to increase India’s nuclear power generation capacity to 63,000 MW by 2032, by adding nearly 30 reactors, at an estimated cost of $85 billion. It has invested ₹ 21,982 crore as of March 31, this year. In addition, an amount of ₹26,084.34 crore has been invested in projects that are at various stages of commissioning, the Department of Atomic Energy informed the Lok Sabha on August 13.
Uranium find in Assam Besides the Australian supplies, there is good news in a uranium find by ONGC, the public sector oil and gas exploration major, in Assam. Though ONGC refused to reveal the size of the find, it indicated “good prospects” and has signed an agreement with Uranium Corporation of India.
Price impact
On what the Australian deal with India meant for uranium prices, a Morgan Stanley analyst in Melbourne tracking the market said, on condition of anonymity: “With India emerging as a new market, prices will firm up further unless supply increases from Russia and Kazakhstan.”
Uranium prices have risen 18 per cent from May 20 to around $31 a pound this month.
“Uranium prices fell 60 per cent in 2011 forcing Kazakh and Australian producers to shut some mines. The current spot prices are being driven up by the reduction in supplies,” the analyst said.
With inputs from Richa Mishra
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