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Economics Legislation Committee
31/05/2018
Estimates
JOBS AND INNOVATION PORTFOLIO
Australian Nuclear Science and Technology Organisation

Australian Nuclear Science and Technology Organisation

CHAIR: We will now resume. I welcome Dr Paterson from ANSTO. Thank you very much for joining us, and I'm sorry we have kept you waiting so long. We might kick off—unless you have an opening statement, Dr Paterson?

Dr Paterson : I don't have an opening statement.

CHAIR: We will kick off with Senator Ketter then.

Senator KETTER: Can I start with the unfortunate incident of the radiation exposure at Lucas Heights. I notice from an ARPANSA report to parliament that there was a serious accident on 22 August last year. Can you outline for the committee what happened there?

Dr Paterson : This was a serious and significant event. A quality-control worker was undertaking a procedure, which has been in place for many, many years and which is to provide quality control of a nuclear medicine precursor—molybdenum 99. This is kept in a vial within a shielded container. As the staff member was holding the vial with tongs and decapping it, it came out of the shielding and into the general area of the fume hood in which the work was taking place. That involved a splash of Mo-99 onto the double gloves that are normally worn in this situation.

This is a highly radioactive liquid and that resulted in an understood process of accumulated distress to the tissues over time. For a significant period of time this does not appear at all and then it starts to appear. This is known. As we are today, she is still undergoing some medical treatment for that situation. She continues to be supported by the ANSTO Medical Centre and the associated staff, and she is supported by an external group of clinicians as well as the process runs through.

From the background information that we have from this type of incident around the world, there's likely to be no long-term consequences but an increased potential cancer risk to the extremities. The current cancer risk for the whole population is of the order of about 1½ persons per thousand, and that is probably doubled in the particular case of this worker.

Senator KETTER: So that's a serious—

Dr Paterson : It is a very serious matter, and it's been taking seriously by myself. The board has been fully briefed about it and we're also working with ARPANSA on a plan to see if we can eliminate to the greatest extent possible this quality-control test, or reduce the activity that is present in the test. All of this takes time, because we have to demonstrate to the medical regulator that the material that is provided to the market meets the medical requirements. So we've got this challenge of meeting the medical requirements at the same time as working with highly active material.

We are collaborating with the regulator. I have briefed the regulator personally within this month about it. We've had an extensive discussion. I think there's great alignment and great shared purpose in seeking to automate these processes to the greatest extent possible and to limit the risk. We have a team of people working on this, and we are continuing to talk to the regulator in that regard.

Senator KETTER: Coming back to the worker involved, I take it you're continuing to monitor how she's going and are supporting her?

Dr Paterson : Absolutely. It is essential that we provide the support but also the opportunity, when it is possible, for the worker to be at work and to be doing meaningful work.

Senator KETTER: Is this the first time that ANSTO has been the subject of a report to parliament from ARPANSA for a breach of this nature?

Dr Paterson : I think there have been breaches in the same class, but, certainly in the last 10 years—in the last decade—we have not had a breach of this nature. This is one that hasn't been seen in nuclear medicine facilities around the world, although substantially the same procedures are used. However, the universal rule is that we should look at the consequence and, if we deem that the consequence is too significant, we must find ways to reduce the consequence and mitigate it. So it's not a risk management matter; it's a consequence management matter. That is the view that I have taken with the regulator: we will do everything that is possible within the framework of our regulatory environment to absolutely reduce the consequence to any worker in relation to these sorts of events. So we are taking it really, really seriously.

Senator KETTER: What's the effect of ARPANSA's findings of a breach of the act—

Dr Paterson : The effect of the finding of a breach is that we have not met the requirements that are set out by the regulator in terms of plans and arrangements. The regulator has a number of options available to them. In my last discussion with the regulator, he was still applying his mind to the whole set of circumstances and to the actions that we're taking. I wouldn't want to prejudge what is in his mind.

Senator KETTER: So they flagged further enforcement activity, but that hasn't happened as yet?

Dr Paterson : They haven't flagged further enforcement activity, but they have indicated that we will have to demonstrate that we have introduced a significant change in practice, including the potential for automation, to mitigate the risk of this happening in future.

Senator KETTER: It's fair to conclude from your own report and from ARPANSA's report that they found some issues in safety and in training at ANSTO?

Dr Paterson : The findings in relation to safety was the event. The finding in relation to training was that the training had taken place. It was within the framework of training that we've operated for a long period of time. But, on review, ANSTO took the position that we could introduce a lot more visual material into the training, rather than it being documentary based, and include a more significant part of the period of training in what we call a cold environment rather than a hot environment, so that the repeated actions are learnt in a more fundamental way. The training has already been improved and upgraded and is still under review for further improvement.

Senator KETTER: Has the experience caused you to do things differently across the rest of the organisation? Has it had a broader impact?

Dr Paterson : It does have a broader impact because we evaluated all of the high-risk activities that are recorded within our risk register that have a radiological implication and we are reviewing all of those activities to see if we can reduce them to a moderate level or lower. Indeed, we have changed the way the information about high-risk activity flows to my office. We are busy with this process at the moment. I was briefing members of my executive about this yesterday. It's my view that, for any process or procedure that remains at a high-risk level—and that's normally associated with the consequences that I've been talking about—we will review them on a monthly basis and will seek to continuously improve to reduce that level. That will be a fundamental change in our risk management practice.

Senator KETTER: Have you subsequently received regulatory approval to continue the operation of the molybdenum-99 plant?

Dr Paterson : For the molybdenum-99 plant we have a licence approval from the regulator, with conditions. The hot-commissioning of the plant is imminent. We are continuing to develop that. The Building 54 operations and the sale of molybdenum-99 are continuing. We are operating under our current licence, but the licence conditions attached to the new licence have a higher bar, which I agreed with the regulator would be a good thing.

Senator KETTER: It's about to commence?

Dr Paterson : Yes. I think the important thing to recognise about nuclear medicine production is that it is a chemical process taking place in hot cells. So, I've taken the view that we should have absolute assurance that we understand how that process is operating in the new plant before we go to hot-commissioning. Although the regulator is satisfied that the envelope of safety is in place and that the operations will be sound, I have not yet satisfied myself that we have completely shaken down all of the processes in the cold-commissioning phase, so I have not authorised the hot-commissioning phase yet in ANSTO.

Senator KETTER: Okay. I'm sure you will get on top of that. Can I turn to another matter that's caused some questions for us and goes to the portfolio budget statement and some figures in there. If I could refer you to page 97 of the portfolio budget statement? The statement says that the total resourcing for ANSTO for 2017-18 is now $502.463 million. Is that correct?

Dr Paterson : Are we on page 97?

Senator KETTER: That's what I was told.

Dr Paterson : It's $502.463 million for the current year and 372 for the budget year. That change is related to the Synchrotron coming onto the books of ANSTO.

Senator KETTER: Is that the $193.599 million figure?

Dr Paterson : Yes. It's that with a few other smaller items, but the 193 is the—if you acquire an asset you have to put the value of the asset through your profit and loss statement, and that creates that transaction.

Senator KETTER: The footnote there doesn't really make that terribly clear.

Dr Paterson : I think there are a number of drivers before you get to the 'bottom bottom line'. If I can reflect on that footnote: during the last financial year, when we undertake decommissioning, we cannot keep the value of assets at the same level in decommissioning programs. That results in an impairment. Then, depreciation costs for new facilities, when they come on stream, can also have a significant effect because they wouldn't have been in the income statement until they are actually commissioned. So, there's a wide variety of drivers within this. In addition to that, as we evaluate market conditions into the future we are driven by the market potential of our activities to sometimes write up the value of the forward look and sometimes impair the forward look. At the moment, in the markets we're operating in there's sort of a net impairment effect, whereas a few years ago we were writing up the value of our activities.

Senator KETTER: You might have just touched on the answer to my next question. There are some changes in respect of the figure for expenses not requiring appropriation in the budget year. Compared with previous years' figures, it appears to be an additional $145.478 million for 2017-18—if you go back to the PBS for last year.

Dr Paterson : This could be the impairment.

Mr Lawson : Are you referring to the previous portfolio budget statement book?

Senator KETTER: Yes.

Mr Lawson : We only have this year's with us at the moment.

Senator KETTER: You might have to take something on notice.

Dr Paterson : We'll take it on notice, Senator.

Senator KETTER: I was going to ask if you could explain that, if that's correct. And, in the same vein, you're reporting additional revenue from industry sources, and we calculate that to be of around $50 million.

Dr Paterson : That's correct, yes.

Senator KETTER: Does that reflect the commissioning of the Molybdenum-99 plant or something else?

Dr Paterson : It includes that in part. We've become stronger in the irradiation of silicon. That continues to be a highly niche but important marketplace for us. In addition to that, we continue to see some reduction but are retaining quite a lot of resilience in the minerals area. The team has shifted from doing dominantly uranium and rare earth work into the area of lithium, which is very strongly associated with battery technology. There have been recent reports put out by the companies that are using our services to indicate that the ANSTO team has done extremely well in deriving high yields from difficult lithium ores. These intellectual contributions to future market opportunities, I think, are really a trademark of this group. A few years ago they made great inroads into the potential rare earth environment in the Dubbo setting, for example, and that potentially could be a game-changer because the mix of rare earths in that environment has got the desirable ones for a lot of the very high-tech applications. So, I think our minerals group, although we charge a market-related rate, don't often generate intellectual property for ANSTO itself; however, the industry does benefit from the outcomes of this remarkable group of minerals-processing engineers.

Senator KETTER: That's very impressive. Just finally on this particular issue: I understand you're proposing to provide an additional one million radiopharmaceutical doses for 2018-19 over the previous year. Is that correct?

Dr Paterson : That's right, and that's related to the commissioning of the facility.

Senator KETTER: The budget measure relating to funding radioactive waste management and decommissioning projects: Budget Paper No. 2 contains a measure which indicates that ANSTO is being allocated an extra $7.7 million to fund immediate and critical radioactive waste management and nuclear decommissioning activities—is that correct?

Dr Paterson : That's correct.

Senator KETTER: Does this relate to the spent nuclear fuel waste from the OPAL reactor?

Dr Paterson : So the decommissioning measures don't directly relate to the intermediate level of liquid waste that are generated in the nuclear medicine environment. The measures more broadly cover the nuclear medicine production. They also support and underpin our cutting-edge scientific programs and are linked to our industry outcomes. The focus on it and the intention for this funding is to ensure that our decommissioning activities right across the Lucas Heights site, in particular, are maintained at a sufficient level to not become a burden on the organisation from an operational point of view. So we worked very intensively with the department this year to improve some waste facilities in anticipation of the national radioactive waste management framework being put in place, and we're very pleased with the progress on that framework. We think that it now has sufficient maturity to be supported into the future in a predictable way, and this is a massive step forward. We'll be looking at some improvement in storage capabilities and also at some specific areas related to asbestos contamination on the site.

So, it's a range of smaller items that are associated with a predictable decommissioning plan, and it anticipates a longer-range plan which is currently under discussion with the department and the central agencies. It could, in principle, become a core part of the budget, but that would be anticipating something that is not yet fully realised.

Senator KETTER: Perhaps I could just ask about the spent nuclear waste from the OPAL reactor. Is that waste due to be sent to France?

Dr Paterson : The spent fuel is indeed due to be sent to France. The treaty action which is required to underpin that is imminent, and we were very grateful for the work of JSCOT in that regard, in agreeing the importance of securing the treaty. The impact of securing a treaty is to assure the French public that any waste that arises from the reprocessing of the spent fuel will be returned to Australia. That's the treaty action. But underpinning that is a long-term arrangement with our French counterpart, Orano, previously Areva, for the reprocessing of the spent fuel in France. This is very important, because we have no capacity to maintain the spent fuel in Australia for long periods of time, and we've got a strong and long tradition of in fact using the UK and France for reprocessing.

The shipment is due to take place in the next quarter of the year. The completion of the treaty action put all of the things in place that will allow that to happen. The really good news about this arrangement is that, in principle, under this arrangement we can manage the spent fuel and the reprocessing of spent fuel for the full life of the OPAL reactor. There are very few reactor facilities in the world that have this unique capacity. And I must give a great deal of credit to the teams that have negotiated with our French counterparts and a great deal of thanks to the parliament and the people we've worked with who've assisted in securing the treaty action.

Senator KETTER: So the treaty was required because of the fact that it was going to come back—

Dr Paterson : That's right. And eventually, in the late 2050s, there'll be two casks like the one cask we have now already stored on our site in the interim storage.

Senator KETTER: I think I've seen that.

Dr Paterson : You've seen that one? There'll be another two for the whole life of the reactors—remarkable how little it is.

Senator KETTER: How much material will be sent to France under this agreement?

Dr Paterson : I'll get you the number of fuel assemblies. It's of the order of 264 fuel assemblies, which will be in three casks. We actually bring the casks into the reactor hall, put them into the pool, load the fuels—I beg your pardon: it is four casks, not four; one of them we own, and three we're hiring—and they are loaded into the casks. The casks are then taken out of the pool, decontaminated, and put into their sealed environment, and these will then be transported and taken by sea to France. All the subsequent shipments which take place during the course of the life of the reactor involve about 180 fuel elements. Then the French take the plutonium and uranium into their civilian electricity production program. Mixed oxide fuel is produced from that. We get a vitrified waste back from France, and you've seen that in our interim store.

Senator KETTER: When do we expect to see the remaining waste returned to Australia?

Dr Paterson : In terms of the UK waste, it is still up for discussion, because the Sellafield site is replanning its integrated long-term waste management and they can't finalise the Australian waste until that integrated plan is in place. This actually works for us, because in principle if we had our radioactive waste management facility built and operating then that spent fuel waste returned from the UK could go directly to that facility.

Senator KETTER: What About the waste from France?

Dr Paterson : The first shipments back to Australia will take place in the 2030s. So, there's a good long time as they process all of this material. The shipments will continue until the late 2050s or early 2060s, unless the lifetime of the reactor is extended.

Senator KETTER: As you said earlier, when it does return to Australia it will go into those containers.

Dr Paterson : Yes. That's intermediate-level waste. Under the national radioactive waste management framework, intermediate-level waste then has to have a disposition pathway to final storage. I've just been speaking to my Chief Nuclear Officer, Hefin Griffiths, who's returned from meetings at the International Atomic Energy Agency, where they're discussing new ways of handling that sort of waste. That's really an important development as well. We're working with colleagues across Australia and talking to other potential players who are looking at those final disposition pathways. With modern technologies that are available to us, I believe that we'll be able to do it at a substantially lower cost than is the case with the current actors who are dealing with the intermediate-level waste.

Senator KETTER: I want to move on to the issue of jobs at the proposed National Radioactive Waste Management Facility. I understand you recently visited regional South Australia.

Dr Paterson : Yes. I had a very good visit with a group of people from the department. I'd been asked to talk to various stakeholder groups that'd been assembled in the community. I visited both Kimba and Hawker. In the case of Hawker, I visited one of the sites where AECOM is currently drilling to validate the geology and hydrology in relation to a potential site. I was very impressed with the way that site was being managed and by the strong relationship to the Aboriginal community who were overseeing the traditional ownership aspects of that program.

The site itself is interesting. It's got some powerlines that pass right next to it, but it has got potentially good geology. I'll rely on the geologists to give all the answers, but we were able to interact with the drilling teams. There is a lot of technical progress in the potential qualification of those sites, subject, of course, to regulation and community consent—those are important aspects.

Senator KETTER: How did you find the discussions with the members of the communities involved in relation to the process for selecting the facility?

Dr Paterson : I found very engaged communities in both settings. My sense was that the factual nature of the debate is getting increasingly prominent, sometimes relative to the emotive content of the debate. I had some very interesting conversations with people who are not supporting what is happening. There are things that we think about a lot, like governance, and I'm sure that the governance question can be answered, but it's nevertheless useful for somebody like me, who's so familiar with the environment, to be able to talk to people who really want to know how we keep control of these things, how we govern them and so on. I also found that there is an opportunity to work with the local agricultural communities to support them in understanding some of the aspects of their environment—the soils, the water and so on. I'm hoping that we'll be able to amplify that in discussion with South Australian universities that could also, I think, benefit from being connected with these communities. I was impressed with the community's ability to handle the diversity of views. It can be stressful, but I felt that there was progress being made, again, because of the factual nature of the debate and the need to provide people with assurance based on information.

Senator KETTER: I understand that there have been reports that suggest that the facility will create 45 jobs, rather than the 26, I think, that were originally proposed. Is that more than what was previously expected?

Dr Paterson : ANSTO has made technical inputs to this matter, and I can talk to those. I think the department can talk to the policy settings in that regard. ANSTO was asked to put together a report in relation to the scoping of the facility, which had some functions that had not been fully interpreted in the initial framing of the number of people.

So think of this facility as a site which has to have security, which operates within a low-level waste repository and an intermediate waste store, and which also has a public-facing, public engagement capability. If you add all of those together, the increase in the jobs has really been about understanding the nuclear management environment a little bit more clearly, and there is an increase in the number of jobs in that regard. There is now full provision for the security, which hadn't been fully provided in the earlier assessment. And there is a public face to the facility which would lead to ongoing public engagement. This has been very successful in countries like the Netherlands, for example, where people really take ownership of their waste and understand how it relates to the benefits that accrue in society.

So the increased framing, in terms of the scope, plus the better planning of the full work-through of the workforce plan, has led to the increase in the number of jobs. The majority of the jobs can be trained and developed in the community setting; a smaller number of the jobs would involve people with technical qualifications which they could get at TAFEs or, in some cases, at universities. The plan is much more detailed, and the information is robust, and that's a very good planning and working estimate for the costings that are associated with operations.

Senator KIM CARR: In terms of these 45 jobs, do you see them being drawn from the local community?

Dr Paterson : I would say the vast majority would be drawn from the local community. We detected, in our discussions with the economics committees that are being put together, that one of their great challenges is sustainable jobs in those communities. The town of Hawker, for example, from the information I received, is currently about 770 people. You can imagine the positive impact of 45 jobs that will leverage other jobs as well.

Senator KIM CARR: We're talking about permanent jobs?

Dr Paterson : These are definitely permanent jobs. They would be jobs that would last the life cycle of the—

Senator KIM CARR: Facility?

Dr Paterson : Of the facility. And they might, indeed, over the years expand as the research that I have just been talking to Senator Ketter about involves building research relationships with the facility during that time. That might, from time to time—

Senator KIM CARR: Permanent full-time jobs?

Dr Paterson : These are permanent full-time jobs. Some are of a shift nature; others are of an office nature.

Senator KIM CARR: Men and women?

Dr Paterson : Men and women, yes.

Senator KIM CARR: You said that some of them were people that could be trained for the job from local qualifications, like TAFE qualifications.

Dr Paterson : Absolutely correct.

Senator KIM CARR: What sorts of positions are we talking about?

Dr Paterson : Operations management can be trained in the TAFE environment. The security guarding and installations can be trained in that environment. The materials handling and qualification can be done through the TAFE system. So that is a significant number of the jobs. Once you are into radiation protection and stuff like that, that's more of a university qualification. But some of the people who undertake the scanning type of work can be trained at the site, as we do at ANSTO. We've had generations of health physicists training—

Senator KIM CARR: You said local jobs—local employees from the local community?

Dr Paterson : Yes.

Senator KIM CARR: Even the technical ones? Where would you get them from?

Dr Paterson : I believe there is a capacity for technical jobs in those communities. The agricultural communities have got a strong orientation to modern applications of precision farming, for example. The complexity of these jobs is in the same range. I think that it is entirely plausible that a culmination of some distance study in some cases, associated with visits to places like ANSTO to get the hands-on experience, would be sufficient to underpin these jobs.

Senator KIM CARR: Thank you. Sorry, Senator Ketter.

Senator KETTER: Just for the record, I think I mentioned there were 26 jobs planned originally. It actually was about 15 jobs.

Dr Paterson : That's right, yes.

Senator KETTER: To confirm, those 45 jobs are not part of the construction phase? Those are ongoing jobs?

Dr Paterson : These are the ongoing jobs. In the construction setting we don't have a fully fledged estimate at this point, but it will be not insignificant.

Senator KETTER: Thank you very much, Dr Paterson.

Dr Paterson : Thank you very much.

CHAIR: Do you have any more questions for ANSTO, Senator Carr?

Senator KIM CARR: No.

CHAIR: Dr Paterson, I was going to ask you about the prostate cancer treatment—is it lutetium?

Dr Paterson : Yes, lutetium-177.

CHAIR: Yes. I was going to ask you about that very briefly. I could put those questions on notice but maybe you could say a couple of words about that, because I think it is very exciting.

Dr Paterson : We recently had a major international event take place in Australia, which was the World Federation of Nuclear Medicine and Biology, a global meeting attracting some thousands of people in the nuclear medicine domain. It was held in Melbourne. At that meeting I met with some of our colleagues from the European environment who have developed lutetium-177 and the associated treatments very proactively; in fact, we license technology from them to produce lutetium-177 in the OPAL reactor. That has led to clinical trials which are taking place in Australia. The particularly interesting trial is to look at lutetium-177 actually treating prostate cancer—very advanced prostate cancer. We were able to hear at that conference about the ongoing trials that are happening in other countries, where the prognosis for these very, very late-stage prostate cancers that have not responded to other treatment are responding to the lutetium. Lutetium, basically, gives up beta particles, call them electrons, if you will, but we call them beta particles. You attach lutetium to the PSMA—which is produced by the prostate—and that means that the lutetium and the PSMA go to the prostate because that's where it's found in the body. And, once they arrive there, these beta particles, these electrons, fire out of the lutetium—which ends up not being lutetium any more—and those very high-energy electrons, not from the shells around but from the very nucleus of the lutetium, damage the cancer and basically destroy it. This is the basis of these treatments.

ANSTO hosted a breakfast session, on one of the days of the conference, where a top academic spoke about the work that is going on. We are pleased to be involved with these trials, because we have the opportunity—at a very early stage of what is a brand-new market—to become a partner to the clinicians in Australia who are doing these clinical trials. So it is a great opportunity for us. In addition to that, it seems that there is a great interest, for the first time in pretty much a generation, for the large big-pharma companies to get back into nuclear medicine. They have kind of let it go, and they have stayed out it for a while, but some of the big pharma companies have recently acquired isotope-based treatments that are coming out of these very smart universities and medical research institutes around the world. So it could well be that, over the next period of time, lutetium-177 and actinium-255 and a range of other beta emitters will become much more pervasive in nuclear medicine. So we have to get ready for that. Fortunately, about 12 months our board ago asked us for an integrated health strategy. That included our work on lutetium. And, in fact, it was in October last year that I actually reported in some detail about what we're going to be doing with lutetium. So our board has been proactive in leading us and urging us to have integrated and long-term strategic approaches. We have responded by having developed these capabilities. But I think this will be pretty important in the future treatment of these very aggressive late-stage cancers.

CHAIR: I think that is terrific. It is lovely to have something that is such a real-world application, with such complicated science and the extraordinary facility that you have. I have some other questions; I'll put them on notice. Thank you very much for joining us this evening, Dr Paterson.

Dr Paterson : Thank you.