URANIUM EXPORTS TO INDIA: AUSTRALIA NOT PLAYING CRICKET WITH A STRAIGHT BAT

-- Anuj Wankhede

Tony Abbott

There has been talk for the past many years about Australia which has the world’s largest known uranium deposits - about 28% - lifting its ban on exporting uranium to India. The visit by the Australian PM Tony Abbott to India and specifically to Delhi on September 5th 2014 is expected to seal a deal which will probably end the 30 year ban on uranium exports to India by Australia.

Australia did not take kindly to the fact that India was not a signatory to the 1968 Nuclear Non-Proliferation Treaty (NPT) which aimed to curb the spread of nuclear weapons and atomic testing and hence put a ban on export of uranium to India While the NPT in itself is not without its own flaws, it still remains the single largest multi-lateral treaty which has kept a leash on nuclear weaponization and proliferation to some extent. India has ratified the treaty but has refused to sign it citing various problems in the treaty and claimed a right to nuclear weapons just as the UN permanent council member countries have. 

Due to this, Australia (and many other countries) suspended nuclear trade with India thus forcing India to look for indigenous development of civil and military nuclear options. Things changed after the Indo-US nuclear deal was signed in 2008 which paved the way for India to do business albeit on a small scale with some countries. Not being a part of the Nuclear Suppliers Group (NSG) had also hurt the Indian nuclear dream and India was literally a pariah after its Pokhran II atomic tests in 1998.

It is pertinent to note that the Pokhran II tests were conducted while the BJP was in power and were supposed to serve as a warning to Pakistan and China to not take India lightly. 

It was sheer jingoism at work. 

By coincidence or by design, it is again the BJP which is playing this nuclear game. The difference is that this time around, the BJP has a commanding majority in the lower house of the Parliament enabling it to muscle through legislation with virtually no opposition. Also, the Indian PM Narendra Modi is a known right wing

Narendra Modi at World Economic Forum

hardliner and however many clean chits he gets, the bogey of the Godhra Hindu Muslim riots sits on his back like a monkey. His hardline views towards Muslims in general and Pakistan in particular are a matter of public knowledge. He is also a pro-industry votary and has rolled out the red carpet to foreign investors in practically all key sectors within three months of his anointment as PM. This has stirred tremendous foreign interest in India given its huge population and thus enormous profit potential and a virtual assurance that this will remain a stable government for five years. Modi is cleverly using this prospect of profits to leverage nuclear deals with various countries and appears to be in a hurry to seal as many nuclear deals as possible. As we will see later, the beleaguered Australian uranium mining industry could not have asked for a better Indian PM. It is literally a marriage made in heaven – whatever the future implications may be.

After the BJP lost the elections post Pokhran II in 2004, it was the turn of the Congress led rag tag coalition of UPA 1 and then UPA 2 to rule the country for a decade. They too followed the time tested tactic of claiming that India’s nuclear program was peaceful, purely civilian and India had no intentions of military use of the same. The world at large saw through this hollow and outright blatant lie and continued to impose sanctions on India especially where it hurt India the most – uranium fuel. India has very little domestic uranium and whatever exists; it is of extremely low grade. This makes it almost impossible to use the domestic uranium to fuel its nuclear energy program AND to enrich it to weapons grade for manufacturing bombs. Perforce, India needs to depend on imported uranium from either Canada or Australia or Kazakhstan to keep its nuclear reactors going.

Knowing this reality, the Manmohan Singh led Congress government made all efforts – politically and diplomatically – to have access to nuclear technology and fuel and get into the elite NSG. The efforts paid off

George Bush and Manmohan Singh 2008

and the landmark Indo-US 123 agreement was signed amid ruckus in the Indian parliament; cash for vote’s bribery scams and stiff opposition in March 2008. Under this agreement, India would open up its civilian nuclear facilities to inspection by the International Atomic Energy Agency (IAEA) and delineate its civil and military facilities.
In return, the US would offer full co-operation in the civil nuclear arena to India (read, US companies would get preferential treatment on deals in the growing Indian nuclear energy market.)
It also paved the way for India to be part of the NSG and carry out nuclear related business with other countries despite being a non-NPT signatory AND a nuclear weapons nation.
It was basically a huge "you scratch my back, and I will scratch your" deal between India and the West (particularly the US)

However just a couple of years later, India also passed the Civil Liability for Nuclear Disaster (CLND) Act in 2010 which held foreign nuclear suppliers liable in case of accidents and this cast a pall of gloom over all the countries which had been eagerly looking to get a foothold in India. Despite the UPA governments’ best efforts to dilute the stringent law; it was not successful in doing so. Hence, apart from the partial commissioning of the Koodankulam nuclear power plant with Russian assistance, no other deals were being signed formally even after being announced. And the US was getting jittery and impatient with the UPA.

Nuclear is a long term business and both India and the foreign supplier were playing the waiting game knowing that there will be cracks sooner rather than later given that India has a huge shortfall of power and is keen on nuclear energy which makes up for barely 2% of it’s energy basket (despite spending billions on it.) Knowing that nuclear technology is dual use i.e. civil (energy) as well as military (weapons) it took a lot of diplomatic cajoling for India to be admitted to the NSG and get access to technology and fuel. Two things have still hampered the foreign companies from rushing into India – the stringent CLND Act and India not being a signatory to the NPT. 

Amid a largely successful Japan state visit by PM Modi in 2014 - which saw significant investment commitments by Japan to India, Japan refused to sign any nuclear deal with India and Modi had to return home empty handed without getting hands on the latest Japanese nuclear technology (sic) Japan had made it amply clear that it is not happy with either the CLND Act or with the Indian stand on NPT and that basically it does not trust India enough to enter into any nuclear commitment. 

Australia had all along taken the line that since India was not a signatory to the NPT, it would not supply uranium to India (the CLND Act makes no material difference to Australian uranium exports.) 

However, ever since it became evident to Australia that the developed world was slowly but surely turning away from nuclear energy, it began to look at developing countries to sell uranium – and India happened to be the perfect choice given its size and nuclear ambitions. The Fukushima disaster had been the final nail in the coffin (pun unintended) for nuclear energy and the price of uranium in the global markets plummeted to almost half of what it was pre March 11, 2011 when the earthquake and tsunami ravaged Japan and exposed the world once again to the dangers and costs of nuclear energy.

Germany took the lead and made a firm commitment to shun nuclear energy and close down its reactors. Many US and European reactors were shutting down or close to shutting down. Countries scaled back on their nuclear reactor plans and did a re-think about the wisdom of depending on nuclear energy. Things had gone horribly wrong for the Australian uranium mining industry and new strategies and markets needed to be explored urgently for the industry to survive and recoup the huge investments it had made. The bets were big enough, the stakes were high and the miners knew how to play the game – politically, diplomatically, geo-politically and economically.

Suddenly, Australia began to look overlook at the fact that India was not a party to the NPT and changed its stance. Industry leaders as well as politicians in the previous Gillard government made statements that since a large part of the Indian population was without electricity, it was the “moral duty” and “humanitarian responsibility” of Australia to supply nuclear fuel (uranium) to India. The logic was that since India was into a high growth phase its energy demands would keep rising and hence it needed to add more capacity NOW.

Like a (rather bad) salesman, the uranium mining industry lobbied hard to lift the ban on uranium exports claiming that solar and wind would never match nuclear energy’s base-load capability all the while mindless of the fact that the world was slowly embracing smart power grid distribution networks, renewable energy, that building new nuclear reactors typically takes about a decade or even longer and that India was already a nuclear weapons nation bordering with two other hostile nuclear nations – Pakistan and China. 

Uncle Sam

It is well known fact that the USA dictates most of the Australian government policies – particularly foreign policy. 

With the US nuclear industry in decline and neck deep in trouble plus no domestic and foreign orders forthcoming, it was imperative for the US government to save giant companies like GE and Westinghouse which had already chalked out big Indian plans. But for these plans to fructify, more nuclear fuel i.e. uranium would be the need of the hour. Given this background, it is entirely conceivable that the US exerted suitable pressure to facilitate lifting the uranium export ban as soon as possible and before Modi makes his maiden state visit to the US. 

The Americans know well that given the BJP’s parliamentary majority, Modi's pro industry leanings and fondness for the so-called “nuclear deterrent”; suitable deals could be struck by selectively interpreting the CLND Act and US companies can sign the contracts to build new reactors in India. 
(Manmohan Singh - during the UPA II’s last gasp - did precisely this during his last US visit by getting an ambiguous interpretation of the CLND from the Attorney General of India.) 
In short, it becomes a win-win-win situation for three parties – the US companies, the Australian mining companies and the Indian establishment/businesses.

Also, as far as nuclear energy and weapons go, the two major political parties in India are brothers in arms having the same agenda. And why not? Nuclear deals are big ticket business and even 2-5% of the deal counts for a lot for the venal, short sighted politicians who rule India. Unfortunately, there is a lack of any leader who can be called a genuine statesman and who can halt this march towards certain doom.

Same policy by ex PM, current PM and the President - perhaps for same reasons

Perhaps, and with almost certainty, one can say that the Australians are pretty much aware of the implications of supplying uranium to India and are willing to turn a blind eye towards its dangers. 

Senator Scott Ludlam of the Greens Party and a known vocal opponent of the export has this to say:

Scott Ludlam 

“They (the mining companies) see India as an industrializing nation with a growing power sector, they see the dollar signs but they quite clearly don't seem to be interested in the risks."   

He goes on to further add: 

"India is a nuclear weapons state and they're on the record saying they're trying to buy foreign sources of uranium so they can lock up their domestic reserves for a nuclear arms race with Pakistan. So it's a very volatile and dangerous security situation into which to be selling uranium."

Despite this plain truth being espoused in public, Rakesh Ahuja former Australian High Commissioner to India and now an energy strategist has this to his credit:

"Any uranium we sell to India must be used for civilian purposes.”
When questioned whether this doesn't that just free up domestic uranium, for military purposes? He answers “Yes, ah yes, that has always been the case, yes, I mean we sell to China, and it frees up their domestic (uranium) for military use, yes, it's a fact of life.”

Pakistan is also a non signatory to the NPT but has entered into bilateral treaty with China for nuclear technology, equipment and installation. It is this kind of a bi-lateral deal that Tony Abbott has in mind when he claimed that “sufficient safeguards” have been put in place to ensure that Australian uranium is not diverted for military use.

What Abbott fails to – rather chooses not to – understand is that India has not placed all its nuclear facilities under IAEA supervision and its indigenously developed reactors are out of bounds of the IAEA and hence there is opacity about the use of nuclear technology and fuel in India and no “safeguards” can take care of this. If a gigantic Malaysian Airliner can disappear into thin air without a trace, it is very much plausible for a few containers of yellow cake to go missing in India and end up in a secret military location for enrichment. This is not fanciful – just a week ago a container carrying highly radioactive Cesium 132 has gone missing without a trace in Kazakhstan. 

The export of uranium to India will eventually trigger off a nuclear arms race between the three neighboring countries. This fact is known AND accepted by the Australians at the highest level. There is strong domestic resistance to export of uranium by Australia especially after it became evident that the fuel used in the Fukushima reactors had its origins in Australia. But The Tony Abbott government has turned a blind eye to its own people, people of India and many others across the globe and is behaving in a spineless manner for pure commercial and geo-political gains for itself and its masters. Obviously, the eye is not only on the export revenue which would accrue because uranium makes for less than a billion dollars out of the over hundred billion dollar total mineral export and may touch one billion in 2018 if this deal is signed, sealed and delivered. So, economically, it is of almost negligible consequence when compared to iron ore, coal, copper, nickel etc which have a far greater share of export earnings. It is sheer politics that is driving this deal.

In this context it is safe to say that Australia is behaving in a unethical, immoral, reckless, dangerous, negligent and wanton manner and is thus willfully pushing Asia, nay the whole world, towards disaster and destruction. Australia is just not playing the gentleman's game of cricket straight.

Contact the Author on benchmark.anuj@gmail.com