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Friday, 22 February 1985
Page: 75


Senator ROBERTSON —I direct my question to the Minister for Resources and Energy. I ask: Has the German company, Urangesellschaft, applied to have uranium exported to France? Is it likely that this uranium will be used by the French electric power utility? Has he received any advice from the French utility as to the possibility of its purchasing this material?


Senator GARETH EVANS —Yes, the German company, UG for short, has informed the Government that it wishes to import 100 short tons of uranium oxide through a French company, Enership SA, on a vessel due to sail from Darwin on 27 February, this being Ranger uranium supplied by Energy Resources of Australia pursuant to a contract with the German firm, Urangesellschaft. It is also the case that we have had assurances from the only possible peaceful user of that uranium in France, the utility, Electricite de France, that it has no contracts or arrangements with Enership, nor does it intend to enter into any and nor does it, although this is a matter of common knowledge rather than something about which we have been specifically advised, have a need for uranium, having extensive stocks of some 30,000 tons on hand. The communication from Electricite de France to which I refer is a cable to ERA Sydney from Monsieur Janin of the French utility. I seek leave to have the text of that document incorporated in Hansard.

Leave granted.

The document read as follows-

Mr Bernard Fisk

E.R.A. Sydney

Dear Bernard,

By this Telex, I want to confirm what I just told Peter Bradfield E.D.F. has no intention to buy material coming directly or indirectly from E.R.A. and has no arrangement with Enership S.A.

Best Regards,

R. JaninElectricite De FranceService Des Combustibles


Senator GARETH EVANS —I also indicate for the record that the substance of that communication has been confirmed orally to Australian diplomatic representatives in Paris and we have had cabled advice of that confirmation. As to the larger questions lying behind Senator Robertson's question, it is the Government's belief, as was stated yesterday by the Minister for Trade, Mr Dawkins, that the proposed shipment to the French company and to France is what may be described as a commercial ruse designed to encourage a refusal by the Australian Government of an export approval for this shipment, given our well-known policy in relation to uranium intended for end use in France. It is a ruse no doubt encouraged by the circumstance that the spot price for uranium on the open market at the moment is about half that under which it would need to be supplied pursuant to this contract. The Government has not been taken in by this fairly transparent exercise. Export approval has in fact been granted. I am confident, as the Minister for Resources and Energy responsible for this, that the safeguards system which continues to operate in relation to France pursuant to bilateral agreements both with France and Euratom will ensure that, even if the present contract amount of uranium is delivered to France in the first instance, it will not in fact be used there. To avoid boring the Senate further on this subject, Mr President, I simply seek leave to incorporate in Hansard the text of Press statements released yesterday by both the Minister for Trade, Mr Dawkins, and myself which fully explain the Government's position on this matter.

Leave granted.

The documents read as follows-

GERMAN COMPANY ATTEMPTS TO SUBVERT AUSTRALIAN URANIUM POLICY

(Statement by the Minister for Trade,Mr J. S. Dawkins, MP)

The Minister for Trade today revealed that a West German company involved with the Ranger Uranium Project had attempted to exploit the Australian Government's ban on uranium shipments to France to its own commercial advantage. In doing so it had engaged in conduct which the Government considers to be highly inappropriate in apparently seeking to create a device which would enable it to extricate itself from contractual relationships with the Australian uranium producer Energy Resources of Australia (ERA).

The company concerned is Urangesellschaft (UG) incorporated in the Federal Republic of Germany. Ownership of UG is held by each of three West German companies in equal parts viz Steag AG; Metallgesellschaft mbH, and Veba AG. Through its 44% ownership of Veba AG the West German Government holds (beneficially) 15% of UG.

In 1980, UG, a 4% foreign equity holder in ERA, contracted to purchase 5920 short tons (st) of uranium oxide from the Ranger uranium project over the period 1982-1996. About 4800st, currently valued at more than A$385 million remains to be supplied.

UG has informed the Government that it wishes to export 100st of uranium oxide to a French company, Enership S.A., on a vessel due to sail from Darwin on 27 February. The Government's policy banning exports for France has been widely publicised and is well known. Yet the government understands that UG entered into a contract with Enership in December 1984 to supply it with Australian uranium.

Enership is a French trading company which, my Department advises me has not previously traded in uranium. Its normal business is apparently in brokerage and trade in liquefied gases, services and engineering.

On the evidence available to me, it is apparent that UG has contrived a situation where it hopes, and expects, the Government to block the shipment. This could pave the way for UG eventually to withdraw from its ERA contract without penalty.

Electricite de France (EdF), the only French utility with a use for such uranium has no contracts with Enership; nor does it have a need for uranium, having extensive stocks of some 30,000 tonnes on hand and supply commitments of non Australian sources of about 8,500 tonnes per annum i.e. sufficient for its requirements until the early 1990's.

It is our belief that it has not been the intention of the parties concerned that the consignment remain for use in France, and I would take this opportunity to emphasise that the ban on uranium for end use in France remains firmly in place.

I have given consideration to banning the shipment but to do so would prejudice Australia's trade interests and ERA's corporate interests over the long term. Banning the shipment would be pointless as the Government is convinced the material is not destined for use in France. In the circumstances I have decided not to interfere with the commercial arrangements and have approved the export.

These tactics by UG are out of step with the normally good standards of behaviour by foreign companies in Australia. The Government regrets UG considered it necessary to adopt such tactics.

The Government looks to better standards of corporate behaviour from companies established in Australia and which conduct business in this country.

The Government's policy on uranium supply is well known. The reasons for suspending exports to France is well understood. Apart from one contract between Queensland Mines and EdF (which has been the subject of previous Ministerial statements) all contracts have been and will continue to be honoured.

As a matter of courtesy, I contacted the Ambassador for the Federal Republic of Germany to inform him of this situation. He has informed me that this is not a matter over which his government has any influence. I accept this.

21 February 1985

MINISTER FOR RESOURCES AND ENERGY SENATOR GARETH EVANS Q.C.

21 February 1985 14/85

URANIUM SAFEGUARDS SYSTEM

I endorse the action taken today by the Minister for Trade, Mr Dawkins, in approving a shipment of Ranger uranium pursuant to the contract with the German firm Urangesellschaft.

It is clear from the material available to the Minister that the uranium will not in fact be used in France, and so no question arises of any breach of Australia's present policy.

No difficulty will in fact arise in tracking the end use of this material, if it is in fact delivered in the first instance to France rather than Germany.

Once the shipment enters France, it will be covered by the terms of our bilateral Safeguards Agreements with that country and with Euratom, and the notification and tracking procedures under that Agreement will apply. If it should first enter Germany, it will be covered by the Euratom Agreement.

France is obliged under the Agreement to seek prior consent before any Australian-origin nuclear material is transferred out of its territory.

The tracking of the material, here as elsewhere, is done by the Australian Safeguards Office (ASO), based in Sydney, which operates a highly sophisticated and comprehensive accounting system to ensure the proper implementation not only of the kind of bilateral agreements involved here, but also the multilateral safeguards arrangements established by the International Atomic Energy Agency under the Nuclear Non-Proliferation Treaty.

Before any exports are authorised the ASO is in touch with its counterparts in all countries through which exports pass. (In the case of Europe this body is the Euratom Safeguards Directorate which tracks and accounts for uranium in the EC).

Australia has 10 bilateral safeguards agreements in place which embrace 17 countries. Each approved export contract provides for uranium exported under those contracts to be subject to our bilateral safeguards agreements. The agreements themselves provide that transfers to third countries can only take place with Australian consent.

Hence commercial customers not only are required to ensure that uranium is used consistently with peaceful purposes as provided for in our agreements, but they are unable to onsell any uranium to countries with which we do not have a safeguards agreement.