Australia May Export Uranium to Mexico, Minister Says

Australia May Export Uranium to Mexico, Minister Says

Australia may start exporting uranium for use in Mexico’s nuclear power industry in four or five years time, helping meet the country’s expanding energy needs, Australian Industry Minister Ian Macfarlane said.

Mexico’s government is considering ratifying a safeguard agreement within six months, which would enable Australia to start exporting the nuclear fuel for use in Mexico, Macfarlane said today in a telephone interview, citing talks yesterday with Mexican Secretary of Energy Fernando Canales.

Mexico is considering expanding the output of its only existing nuclear power reactor by as much as 20 percent and potentially later doubling it, Macfarlane said. Mexico and Australia have an agreement for coal sales and Chevron Corp.’s Gorgon liquefied natural gas project has an initial accord to start exporting LNG to a Mexican terminal in 2010.

“If you ask me for a timeframe, we’re probably talking actual supply of uranium to where the Mexicans buy their enriched uranium, probably four or five years, but it’s important that we’ve already created that opportunity,” Macfarlane said. “Energy for supply into Mexico is looking good.”

Uranium from Australia would probably be enriched in a plant in the U.S. or France as Australia won’t have any enrichment plants in that timeframe, the minister said. Mexico is a signatory of the Nuclear Non-Proliferation Treaty yet still needs to ratify the safeguard agreement before Australia can start exports, he said.

LNG Exports

Macfarlane said he will also investigate the possibility of Australian companies supplying LNG to Sempra Energy’s natural gas import port when the port opens in 2008. Agreements for the terminal to be supplied from Royal Dutch Shell Plc’s Sakhalin-2 project in Russia and BP Plc’s Tangguh project in Indonesia are looking less likely given delays and other problems, he said.

“Where they actually get those cargoes from is becoming a bit of a question-mark,” Macfarlane said.

Mexican President Vicente Fox, and possibly Canales, may come to Australia in mid-November and discuss the potential of Australian exports of uranium and LNG to Mexico, Macfarlane said.

The Woodside Petroleum Ltd.-operated North West Shelf venture is expanding LNG production at a plant in Western Australia, with the additional output set to be sold mostly to existing customers in Japan. Perth-based Woodside plans to start up the A$5 billion ($3.7 billion) Pluto LNG project, also on Western Australia’s Burrup Peninsula in 2010, while Chevron’s $10.4 billion Gorgon LNG project is yet to get planning approval.

`Sold Out’

“We’re basically sold out on gas until 2010 so I’ll be having some more discussions with resource companies when I get back into Australia prior to President Fox coming as to how we may be able to get involved in the Mexican supply situation,” Macfarlane said. “Every time I come here I see more demand for energy and therefore more demand for LNG.”

Australia, which holds 40 percent of the world’s uranium, is seeking to tap rising demand for the nuclear fuel as countries look to alternatives for gas, oil and coal. Australia in April signed an agreement allowing uranium exports to China, which needs to build two reactors a year to meet its target of generating 4 percent of its power from nuclear plants by 2020.

The government is considering changing its nuclear policy to enable the sale of uranium to India, which hasn’t signed the Nuclear Non-Proliferation Treaty, Prime Minister John Howard said Sept. 25.

Australia produced 9,519 metric tons of uranium in 2005 from three mines, owned by Rio Tinto Group’s Energy Resources of Australia Ltd. unit, BHP Billiton and Heathgate Resources Pty, a unit of General Atomics, Clarence Hardy, secretary of the Australian Nuclear Association said Sept. 29 at a conference in Sydney.

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