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Tuesday, 24 February 2009
Page: 1631

Mr JOHNSON (6:33 PM) —I am pleased to speak on the Uranium Royalty (Northern Territory) Bill 2008 and to support it. This is a relatively technical and uncontroversial bill. It essentially introduces a legislative royalty regime to any future uranium mine in the Northern Territory. Effectively it will apply the existing 18 per cent profits based royalty regime that is prescribed by Northern Territory laws. The current bill that we are discussing in the parliament goes back in some senses to the time of the former industry minister the Hon. Ian Macfarlane. In his time as a minister, in August 2005 he announced the formation of a steering committee to try and create opportunities for, to examine impediments to and to look at how we might be able to develop the Australian uranium mining industry over the short, medium and long term.

It was a very useful committee and a very effective one. When they brought their report down in September 2006, it did make recommendations for a royalty regime in the Northern Territory to be established. Interestingly, the report talks about separate royalty regimes being inappropriate to a growing uranium mining sector as new entrants to the uranium industry are uncertain about their potential royalty liabilities. Of course, that was in the context of a federal government led by Prime Minister Howard that was very much in favour of trying to develop and grow the uranium industry in this country. There have been some interesting developments since the election of the new government in the context of uranium exports, which I would very much like to touch on in my presentation here today in the parliament.

Australia has over one-third of the world’s uranium reserves. This bill gives me the opportunity not only on my own behalf as someone who is very interested in this topic but also on behalf of the constituents of Ryan to shine a torch on the government’s attitude, its mindset and perhaps its values in relation to uranium mining. There has been some hypocrisy in its policies and some glaring inconsistencies. In 2001 Australia supplied about 22 per cent of the world market for mined uranium and about 12 per cent of world reactor requirements. Interestingly, this made some 350 billion kilowatts of electricity per year—equivalent to almost twice Australia’s requirements. So it is certainly no small amount of electricity.

For those who are not aware of uranium I would like to highlight a few technical points which I certainly did not know until I prepared for this speech and learnt some more about uranium, which I found very interesting. Uranium is a very heavy metal which can be used as an abundant source of concentrated energy. It occurs in most rocks in concentrations of two to four parts per million and is as common in the earth’s crust as tin, tungsten and molybdenum. Interestingly, it also occurs in sea water and can be recovered from the oceans. Uranium was discovered in 1789 by a German chemist, Dr Martin Klaproth. It was named after the planet Uranus, which had been discovered only eight years earlier, in 1781. Because of its high density, uranium is used in the keels of yachts and as counterweights for aircraft control surfaces as well as radiation shielding. Being no technical person and certainly not having a full appreciation of science, I note that uranium’s melting point is 1,132 degrees Celsius. I do know, though, that the chemical symbol for uranium is U.

I will go to the more substantive points, which I know most of my constituents in the Ryan electorate will be very interested in because of their interest in matters relating to energy production, the efficient use of energy and how we might be able to make life as easy as possible for people not only in this country but also in other parts of the world where energy is an issue. The world will need a greatly increased energy supply in the next two decades—in particular, from clean generated electricity. Nuclear power provides some 15 per cent of the world’s electricity, almost 24 per cent of electricity in the OECD nations and some 34 per cent in the EU—and its use is increasing. Nuclear power is the most environmentally benign way of producing electricity on a massive scale. Without it, most of the world would have to rely on fossil fuels for a continuous reliable supply of electricity. And we know the damage that fossil fuels do to our environment.

From 1980 to 2006, total world primary energy demand grew by 62 per cent, and to 2030 it is projected to grow at a slightly lesser rate but to grow nevertheless. Electricity growth is even stronger, and is projected to almost double from 2006 to 2030. We all know that there is going to be increased demand from the developing world—particularly from the two countries that have over a billion people, China and India. The demand for electricity is going to be massive and access to electricity has to be one of the major challenges for the world to address in as equitable a way as possible. As I have said in previous speeches in this place, I think energy security, diversity, efficiency and affordability are amongst the top issues confronting the leaders of the world.

The United Nations predicts that our world’s population is going to grow from some 6.5 billion today to nine billion in just over a decade and a half. That is something that we have to be very conscious of in policy development that affects people both in developed and developing economies. Based on this analysis of growth, energy demand is going to be right up there. Growth in energy demand is expected to be 1.6 per cent per year from 2006 to 2030.

Nuclear power generation is part of the world’s electricity mix, providing over 15 per cent of the world’s electricity. In comparison, coal is 40 per cent, oil is 10 per cent, natural gas is 15 per cent and hydro and others are 19 per cent. Interestingly, the World Energy Outlook 2008 report from the OECD’s International Energy Agency highlights that the increasing importance of nuclear power in meeting energy needs while achieving security of supply and minimising carbon dioxide emissions cannot be underscored enough. The 2006 edition—going back a couple of years—also reported that, if policies remain unchanged, world energy demand in the next 20 years is going to be massively increased, by 53 per cent. So there is a trend developing, as reported in the publications of major international agencies, such as the OECD’s International Energy Agency. To quote the language used in the 2006 edition, ‘dirty, insecure and expensive’ energy options will still be the norm if nuclear energy is not considered by policymakers.

As I touched on earlier, over 70 per cent of the increased energy demand is going to come from developing countries, led by China and India. Today, China is the world’s largest CO2 emitter, surpassing the United States. So there is an environmental element to this as well. The World Energy Outlook 2008 report highlights that nuclear power does make a major contribution to reducing the dependence on imported gas and curbing CO2 emissions in a very meaningful way, since uranium fuel is a vast resource. It also highlights, however, that governments must play a stronger role in facilitating private investment and encouraging the private sector to get engaged. But they can only do so with the support of national governments. In this country, this is where I think the national government is certainly not playing ball. The national government really has a lot of work to do to support this industry in this country. Some US$26 trillion is required by 2030, according to the 2008 International Energy Agency report. We are talking about big dollars but it is a big challenge, and I believe we have to take this very seriously.

Today, over 16 per cent of the world’s electricity is generated from uranium in nuclear reactors. This amounts to 2,400 billion kilowatts each year—as much as from all sources of electricity worldwide nearly 50 years ago. To give some sort of context to it, this is 12 times Australia’s or South Africa’s total electricity production; five times India’s and double that of China. That gives an idea of the kind of scale that we are talking about. Some 440 nuclear reactors, with an output capacity of about 370,000 megawatts, operating in 31 countries, generate this 16 per cent of the world’s electricity. About 30 more reactors are under construction and another 40 are planned in certain countries. Interestingly, the countries that make use of nuclear power—Belgium, Bulgaria, Finland, France, Germany, Hungary, Japan, South Korea, Lithuania, Slovakia, Slovenia, Sweden, Switzerland and Ukraine—all get 30 per cent or more of their electricity from nuclear reactors. The United States has over a hundred reactors operating, with a capacity of almost three times Australia’s total, and supplying 20 per cent of its electricity. The UK gets almost a quarter of its electricity from uranium.

As I think all speakers have touched on and all would certainly be aware, Australia is not the only country with major deposits. Let me highlight this: there is Kazakhstan with 70 per cent, then Canada and, as is widely known, the United States, South Africa, Namibia, Brazil, Nigeria and Russia. Of course, some of those have smaller deposits, but we are not alone in the world with our uranium deposits—although, as I said at the outset, we have some two thirds of such deposits. Yet the blinkered view of this government is that we should put a lid on who we export to—that we should contain the number of countries that we export our uranium to. I think this is very short sighted. It shows a complete lack of vision, and I think that Australians are paying the price of it economically, socially and environmentally and, in the case of India, also strategically.

Uranium is part of our mining heritage but three mines only are really operating at the moment, and I think this has really got to be revisited. In the five years to mid-2007, we exported some 50,000 tonnes of uranium oxide concentrate with a value of almost $3 billion—a figure that could easily be much greater. Our uranium is sold strictly for electrical power generation only, and the nations which currently purchase Australia’s uranium include Canada, the US, Japan and South Korea and many countries of the EU as well—Spain, France, UK, Sweden, Germany, Belgium and Finland. Interestingly, as I said, we export to China—in 2006 a bilateral agreement was concluded with China enabling exports there—but we do not export our uranium to a democratic nation such as India. I think this is a very regressive and regrettable state of affairs to be in. We could easily increase our share of the world market because of our low-cost reserves here and, of course, our political and economic stability.

Clearly, it is a political factor that hinders our capacity to grow this industry, and yet if we were to revisit this policy and to take a different approach we would be able to employ more than the 1,200 people who are today employed in the uranium industry. We have only about 1,200 people employed, with only about 500 in actual exploration. This is just untenable in 2009. Uranium mines generate about $21 million in royalties each year, with the Ranger mine generating $13 million, Beverley generating $1 million and the Olympic Dam some $6.9 million. Corporate taxes, in the context of what they could be to the Commonwealth, amount to only a small figure of $42 million a year. So I strongly encourage the Rudd government to revisit this issue. Despite our well endowed uranium reserves, political factors mean that Canada is well in front of Australia as the main supplier of uranium to the world.

Interestingly, I had a very profound conversation with a gentleman in Queensland. Queenslanders would know who he is but other Australians may not be so familiar with his name—Murrandoo Yanner from the Torres Strait. He is very much an activist Queenslander. We had a very good conversation before Christmas and he came out encouraging the Rudd government—although in the context of our specific conversation, it was the Bligh government—to revisit its policy on not mining uranium. I want to quote from his words in the Queensland papers. He was very colourful in his language but I think very insightful, and I think he has got a lesson to teach some of the people down here with their fancy names, titles and qualifications. He said:

We have nothing and here we have an opportunity for us to climb out of the gutter …

All she has to do is make a policy change, sit on her butt and we will do all the work and she can take all the credit for it.

He is referring there, of course, to the Queensland Premier, Anna Bligh. Describing himself as ‘the greenest black fella you will ever see’, he said that ‘anyone with half a brain’ could see that uranium was needed to fight climate change. He went on to say:

We are more concerned with that than anyone on the globe because we have to live with it, not some bloke in a koala suit outside the minister’s office carrying a tin.

I am not sure if there has been some bloke in a koala suit outside the honourable minister’s office, but I am sure the minister knows of Murrandoo Yanner. He is a very articulate man. He has a lot of fire in his belly and he has only the interests of his community and his people at heart. Of course, the context of our conversation was about the closing of the Century mine up in North Queensland, and he was very concerned for their welfare. There is very much an environmental benefit to that, Murrandoo Yanner articulated it in a very fine way and I support that entirely.

I say to the minister, who is one of the brighter sparks in the Rudd government and on the record as supporting an expansion of the uranium industry: let us take the blinkers off and export uranium to India. It is a country that needs our goodwill and needs our uranium more so. In a strategic sense and a larger macro sense they will not forget that, because right now India needs cheaper, more affordable energy to supply its growing economy and to allow its people, including the hundreds of millions of poorer Indians, to develop their businesses. Energy clearly has to be part of the solution. I know that they have asked us formally and informally. We could really develop a great relationship with India. (Time expired)