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Economics Legislation Committee
03/06/2015
Estimates
INDUSTRY PORTFOLIO
Australian Nuclear Science and Technology Organisation

Australian Nuclear Science and Technology Organisation

[16:07]

CHAIR: I now welcome the Minister for Veterans' Affairs, Minister Assisting the Prime Minister for the Centenary of ANZAC and Special Minister of State, representing the Minister for Industry and Science, Senator the Hon. Michael Ronaldson; Dr Adi Paterson, from ANSTO; and of course Secretary Beauchamp, who is joining us here in a very timely manner! Thank you very much for joining us. It is great to get the session underway. That is a very long title you have, Minister. That is because you are a very capable minister, I assume, so all those portfolios fit well into your capacity. Secretary, welcome. Do you have an opening statement?

Ms Beauchamp : No, I do not, thank you, Chair.

CHAIR: We will go then, if it pleases you, to ANSTO. Dr Paterson, do you have anything you would like to give the committee?

Dr Paterson : Thank you, Chair, I do not have an opening statement.

CHAIR: Just in budget terms, how much money has the government committed to the new ANSTO nuclear medicine production facility? I have seen it. I have been walking around it. I only walked around it. I cannot wait to go inside it, there at Lucas Heights, just out of Sydney. Amazing, isn't it? We have a nuclear reactor 43 kilometres from the CBD of Sydney, and it has just been going along there, saving people's lives, for decades. We will get back to the funding. Is everything good and proper in the budget of ANSTO?

Dr Paterson : Yes, thank you very much. The funding provided as a loan by government for the construction of the nuclear medicine facility and the associated Synroc waste plant is $168.8 million, and the program is on track.

CHAIR: In real terms, what does this mean we will secure in terms of supply of nuclear medicines?

Dr Paterson : The big change that will take place for us is that at the moment we are a supplier into the Australia New Zealand domain and to some countries in the region and we are a small supplier into the US market at present, and when the new nuclear medicine facility is completed we will be able to move to supplying of the order of 11½ million doses a year of diagnostic nuclear medicines into the US, Asian region markets, Australia and New Zealand. This will be a very significant change. It will move us into being one of the major global suppliers and will have great advantages both for Australian manufacturing capabilities, because we are effectively in that sense a manufacturer, and because the 11½ million doses will generate around $100 million a year in revenue which will return to Australia.

CHAIR: I must say that, for a $168 million investment by the federal government, in anybody's book that is a good business to be in. Can you give us some scale of the significance of this in terms of the international nuclear medical industry?

Dr Paterson : In terms of diagnosis, the big and important isotope for diagnosis is molybdenum-99, which decays to technetium-99m. About 45 million doses a year of diagnostic medicine are given right across the world, and that is continuing to grow in developing and emerging economies, and that is likely to continue to be a feature of how people's cancers or heart disease or bone related diseases are diagnosed using nuclear medicine. The great benefit of using nuclear medicine is that very tiny amounts of radioactivity are used to make very precise diagnoses.

In addition there are a number of nuclear medicines that have therapeutic application. One of these is iodine-131, which is used to treat thyroid cancer, for example, and ANSTO is in the process of establishing a production facility for lutetium-177, which is used in the treatment of neuroendocrine diseases. This will be something new for Australia as well.

CHAIR: That is very good. As I understand it, there are a number of facilities shutting down around the world, so this would obviously lead you to be placed very well commercially to take advantage of that.

Dr Paterson : That is right. The major facility closing is the Chalk River reactor in Canada, which has been the mainstream supplier for many decades, in fact. That reactor is scheduled to close towards the end of next year, and that was one of the reasons that we felt it was appropriate to step up to assist in the global supply chain for this critical diagnostic isotope.

CHAIR: You have given me a compelling business case. What other areas will that funding assist?

Dr Paterson : It is important that we take the benefits of nuclear medicine with some of the aspects that need to be dealt with afterwards, which include the treatment of the waste streams. We will build the world's first full-scale commercial Synroc plant, which we will use to treat the liquid waste which is one of the by-products of the production of nuclear medicines. That will serve to demonstrate a technology which was developed at the ANU by Ted Ringwood a number of decades ago, but it will be the first commercial-scale plant in the world.

CHAIR: It is probably fair to say that you would want to make a comment about this: is this plant that we have capable of proliferation in any way? Certainly there is a push on internationally, I know, to produce medicines from low-proliferation environments.

Dr Paterson : Yes, it is really important. Australia has always been a leader in this regard, with the previous HIFAR reactor, which we moved to low-enriched uranium use for both the fuel and the targets, and we have continued that tradition in the new OPAL plant and again in this new nuclear medicine facility. We are one of the countries that has gone to the front of this important dimension of eliminating highly enriched uranium from the nuclear medicine supply chain. That is very positive for our non-proliferation credentials in this country.

CHAIR: That is a fairly reasonable benchmark. Who else is building OPAL?

Dr Paterson : Similar facilities around the world that have achieved low-enriched uranium status include the South African Safari reactor, but many of the older reactors are still making the transition to LEU. OPAL is the most recently built modern research reactor which produces low-enriched uranium based nuclear medicines.

CHAIR: I will finish up here because there is a bit of interest in the space. When do you expect the facility to be completed?

Dr Paterson : The completion of construction will be towards the last quarter of 2016, with the first product, which will be for regulatory purposes, will be produced during the course of the last quarter of 2016.

CHAIR: I will finish up on this one and let some of the other senators have a go. I know how beneficial it is, with the research I have undertaken in the last couple of years in relation to what you are doing there. How is it contributing to the Australian industry through other various work—for example, rare earths; that area?

Dr Paterson : One of the great strengths that has come out of the construction of the OPAL reactor and the subsequent actions which we have just been talking about has been a real strengthening of our engineering capabilities in ANSTO. We have moved over the last few years from being involved mainly in procurement, if you will, of nuclear technologies. We are now in a position to increasingly develop and engineer our own technologies. A very strong group that has done this over a very long period of time has been our minerals group. The minerals group has spent a tremendous three decades developing the ability to look at uranium resources, for example, but more recently rare earths. In the Australian setting we have been involved in a number of rare earths projects. Rare earths are used in all sorts of things, from the types of magnets that are used in wind turbines to make them work efficiently, right through to many applications in the microelectronics industry and the electronics industry generally. Without rare earths supplied in a practical and feasible way and without an adequate supply chain, there is a real risk that there will not be sufficient supply. We were able to respond to that need of a number of Australian companies, and indeed global companies, that wanted to undertake processing of those minerals: we do not consider the mining aspect but more the minerals processing aspect, and that has been a very successful campaign over the last number of years. That activity is fully funded by industry; it is not subsidised in any way from public resources.

Senator Ronaldson: Just for the sake of completeness, I might get Dr Paterson to just go through some of the budget initiatives which have assisted with ANSTO's work.

CHAIR: I would be grateful for that, Minister.

Dr Paterson : Thank you very much. If I could go to the budget itself, this has been a budget where ANSTO has got three measures which have come forward: The first is $26.845 million over the next four years for the repatriation of intermediate level waste, $22.3 million over three years for interim radioactive waste storage at the Lucas Heights site, and a quantum of $20.5 million which relates to the operations of the Australian Synchrotron.

CHAIR: Thank you very much. In light of that news, I will move on.

Senator KETTER: I have a follow-up question, Dr Paterson. In respect of the synchrotron, the budget paper says $20.5 million overall and the actual measure in the budget is listed at $13 million. Can you explain where the funding is coming from with the $7.5 million difference?

Dr Paterson : The amount that is reflected in the appropriation is the $13 million that you mentioned. The balance of the amount I understand is related to discussions in the Commonwealth. The amount of $20.5 million is the Commonwealth contribution to the operation of the synchrotron in the 2016-17 year.

Senator KETTER: You said 'discussions'. Can you elaborate?

Dr Paterson : I would refer that to the department.

Ms Beauchamp : In the budget papers and Budget Paper No. 2 the costs of this measure are going to be met from resources of the Department of Education and Training and the Department of Defence. They are contributing to the cost. The Department of Health is also contributing.

Senator KETTER: What does their contribution relate to?

Ms Beauchamp : The Department of Health is contributing $7.5 million and the remaining funding will be provided from Education and Training, $5.5 million, and Defence, $2 million.

Senator KETTER: In that sentence that you were referring to in the budget papers, does the cost of the measure refer to the $13 million or the $20.5 million?

Ms Beauchamp : I think the cost of the measure includes a direct appropriation and that direct appropriation would have been met from offsets from savings from across government. The other funding comes from, and would be reflected in, the other departments' budget papers.

Senator KETTER: The budget papers say that the remaining operating costs above $20.5 million, about $9½ million, will come from the Victorian government and the New Zealand Synchrotron Group. Can you confirm that this funding has now been secured?

Ms Beauchamp : We are still in negotiations around the exact amount of funding.

Senator KETTER: Can you tell us the process and perhaps the timeframe for finalising these negotiations?

Ms Beauchamp : It should be pretty imminent. We have got in principle commitments from both the Victorian government and New Zealand.

Senator KETTER: How much from the Victorian government and how much from the New Zealand group?

Ms Beauchamp : It is $1.5 million from New Zealand and $8 million from Victoria.

Senator KETTER: Our understanding was that the negotiations were originally aimed at delivering a four-year or longer agreement. Can you explain why you ended up with just the one year of extra funding in the budget?

Ms Beauchamp : We wanted to secure that one-year funding for 2016-17 and then talk to various stakeholders and members about ongoing funding. Also we were looking at what the government's response might be to the Philip Clark review around science infrastructure.

Senator KETTER: Can you tell us what is happening with the process for securing longer term funding?

Ms Beauchamp : There are two elements: those members and stakeholders who have already got an interest in the synchrotron and the outcomes of the review of the science and infrastructure funding, which is being managed through the Department of Education.

Senator Ronaldson: Senator, the former government had not provided resourcing for the continuation of the synchrotron. That is why we were required to step in. As the secretary said, the outcome of the research infrastructure review by Philip Clark will enable us to look at where we will go with the Synchrotron. The money is there at the moment, until the Clark review is finished. We needed to step in because there had not been money funded by your government. We have now funded it through and we will see what the outcome of the research infrastructure review is.

Senator KETTER: I would like to turn to South Australia's Nuclear Fuel Cycle Royal Commission and seek an update on that. Has ANSTO now been approached to get involved with the work of the royal commission?

Dr Paterson : We have been approached. We had a visit on 2 April from the commissioner and his chief of staff to ANSTO. On that day they toured OPAL, the waste storage facilities at ANSTO and the ANSTO nuclear medicine site. The commissioner discussed a range of issues with key members of ANSTO's executive team and other subject matter experts. The commissioner subsequently wrote to ANSTO and requested the availability of advice on a number of specific questions; all of that advice is of a non-policy nature—it is based on nuclear expertise. We anticipate that, during the course of the work of the commission, we will be able to supply nuclear expertise to support the work. In addition to that, the Department of Prime Minister and Cabinet is coordinating a whole-of-government response on behalf of the Commonwealth, and ANSTO has been invited to participate closely in that process.

Senator Ronaldson: That response is a submission to the royal commission.

Senator KETTER: So ANSTO will be making a submission?

Senator Ronaldson: No, the Australian government will be making a submission and that is being coordinated through Prime Minister and Cabinet.

Senator KETTER: Will ANSTO be making a separate submission?

Dr Paterson : There is still discussion about whether ANSTO will or will not make a submission. If ANSTO does, it will be of a technical nature.

Senator KETTER: What sort of resources are you expecting to be required to devote to supporting or responding to the royal commission?

Dr Paterson : We have got a general resource plan in terms of a series of experts who can cover different subject matter. Those experts have been alerted to the likelihood that they may have to contribute to different aspects of the work, but the resources will be deployed as and when needed. I would estimate at the moment that the current level of activity that would have to go into that would be of the order of one FTE.

Senator KETTER: Is that substantial in terms of ANSTO's—

Dr Paterson : I think that is reasonable for a royal commission, considering the scope of work that is involved. I think that is entirely appropriate and aligned with what we do as an organisation.

Senator KETTER: I would like to talk about the board of ANSTO. I understand that there are currently two vacancies on the board. Is that correct?

Dr Paterson : There are two vacancies.

Senator KETTER: How long have those positions been vacant?

Dr Paterson : I think the board matters and the detail on them are handled by the department, but the vacancies in question have been in place for in the order of eight months.

Senator KETTER: In terms of board meetings, how many attendees are required for a quorum?

Dr Paterson : We have a full quorum and some ability to flex if board members are not available; so I think that from a quorum perspective we are well served.

Senator KETTER: So there have not been any inquorate meetings this financial year?

Dr Paterson : There have not.

Senator KETTER: Can you tell us how many members have attended each meeting this financial year?

Dr Paterson : I will take the detail of the question on notice, but my understanding is that for the current financial year's board meetings there was one absentee at one board meeting, and apart from that the current board members have been fully represented at the meetings.

Senator KETTER: I would appreciate you taking that on notice. My final questions relate to the project to expand production of molybdenum-99. Can you explain the state of the global market here?

Dr Paterson : The global market is continuing to grow. There are a range of estimates, with a low-growth scenario between 1½ and two per cent per year. Many people feel that emerging economies will grow somewhat faster than that estimate, and so there is an upside growth level of about 3½ per cent in that market. That market is likely to diversify over time, but the big constraint in the market at present is the ageing reactors that are currently the mainstay of supply, including the Chalk River reactor, which I referred to earlier.

The French reactor, which is also currently responsible for production, we know will close next year, and there a number of other reactors that are facing either lifetime extensions or potential closure. There is a group called the High-Level Group on Medical Radioisotopes, which was established under the auspices of the Nuclear Energy Agency at the OECD. This group involves all of the countries and stakeholders who are involved in nuclear medicine production and it was directly a response to this potential shortage of supply, which is what Australia is responding to with the new plant that is being constructed. We have been active members of that community and the considered position of that community, which has had two mandates of two years each—it has operated therefore for four years; it has recently renewed its mandate for another two years, which would go to show that this a matter that continues to be of international concern.

It is an important market. It services many, many people globally. There are a number of constraints that exist. The first one is that the cost of the isotope in the nuclear medicine that is provided to the market is about one to two per cent of the total cost of the diagnostic event. This is quite low for a medicine in a diagnosis, so part of the discussion is the rebaselining of the price point at which is it sold in the market to avoid subsidies, because it does not have the full character of a true market at this point. As recently as this week, one of the actors in the market has called for more attention to be paid to that price structuring, in order that people would be encouraged to invest, and to successfully invest, in developing facilities.

A number of countries also, out of their concern to have alternatives available, have sought to develop accelerator based techniques. The accelerator based techniques, I think, can be best described as immature and unproven. They have got some tests that have demonstrated that one can make technetium-99m, but the supply chain will not have any strength in it, because fission based Mo-99, which decays to technetium-99m, remains at about 99.5 to 99.9 per cent of the market, even after all of these interventions have been made. Most of these interventions were designed at the time to be ready around now, to service this market. So I think we can reasonably say that fission based Mo-99 production is going to be the backbone of this market for a considerable time to come.

Senator KETTER: Are there any delays or setbacks in ANSTO's project to expand production?

Dr Paterson : There have been some delays related to the extreme weather events, which I think everybody will be familiar with in the Sydney area, and there are some constraints in the nuclear supply chain aspects of the projects, particularly hot cells. But we do not believe that either of those is going to significantly impact the project.

Senator KETTER: How are you dealing with the second of those two issues?

Dr Paterson : The focus in those issues is the normal way that one would apply to a contracted construction-and-build contract, and that is to work with the people who are in the supply chain to expedite the work to the greatest extent possible, then also look at the post-construction phase to see what savings, in terms of time and/or the expediting or acceleration of project can be achieved. These are the typical responses that one would do at the project level.

Senator KETTER: Thank you very much, Dr Paterson.

CHAIR: Thank you, Senator Ketter. Senator Leyonhjelm.

Senator LEYONHJELM: Dr Paterson, I detect from your accent that you are originally from South Africa?

Dr Paterson : That is good detection, Senator.

Senator LEYONHJELM: Similar detection but for a different reason: I understand you have some experience with small power reactors from South Africa?

Dr Paterson : Yes. During the latter part of my employment in South Africa before I came to Australia, I was the operations manager at the Pebble Bed Modular Reactor company in South Africa.

Senator LEYONHJELM: Some of your staff have got fairly specific experience with reactors as well, I think. Mr Rod Manning, electrical engineer, has some experience with nuclear propulsion. Would that be right?

Dr Paterson : Yes. Rod Manning came out of the US Navy environment, I believe.

Senator LEYONHJELM: That is right. And Hefin Griffiths?

Dr Paterson : Hefin Griffiths is our chief nuclear officer and he has considerable experience on all sorts of different aspects of the nuclear supply chain.

Senator LEYONHJELM: And Mr David Berry worked on Rolls-Royce submarine reactors?

Dr Paterson : We have a range of people. In fact, overall I think we probably have around 25 people who have direct experience with nuclear energy production or other forms of nuclear supply.

Senator LEYONHJELM: ANSTO made a submission to the Defence white paper earlier this year. It said that it is part of a team that 'would be well placed to support both the manufacture and maintenance of any submarine built and/or substantially maintained in Australia.' Would ANSTO be well placed to support the manufacture and maintenance of any submarine, which includes a nuclear powered submarine?

Senator Ronaldson: We are lurching towards the hypothetical.

Senator LEYONHJELM: We are not to hypothetical yet.

Dr Paterson : My understanding—and we will take the balance of the question on notice—is that the reference was to conventional submarines and was the use of nuclear techniques to understand stresses in welds. For example, in the neutron scattering environment we have the Kowari strain scanner, which is used to understand residual stresses in welds. I imagine it would be issues like radiography and related matters that would allow us to support the develop of a national capability to support submarine manufacture.

Senator LEYONHJELM: Okay.

Dr Paterson : We will take the balance of the question on notice.

Senator LEYONHJELM: Good. In that light, I remind you. What I am wondering is whether there is a difference between what you said in that white paper and how you answered a question I previously asked in estimates about whether Australia has the expertise to maintain nuclear powered submarines. You said ANSTO currently does not have expertise in the design and maintenance of reactors on nuclear powered submarines. It would seem to me that, based on your background and the backgrounds of the other gentlemen I referred to, we would go a fairly long way to having that expertise.

Senator Ronaldson: I really think you are now expressing an opinion. Dr Paterson has taken it on notice, but he did frame it around those particular aspects of a construction, not the construction itself, if I understood what he was saying.

Senator LEYONHJELM: I would like to hear Dr Paterson's answer please.

Dr Paterson : I think that what ANSTO seeks to maintain on behalf of Australia is an intelligent observer status rather than a direct engineering capability. Typically a nuclear project like the pebble bed modular reactor turns from being what I would call essentially a scoping and paper exercise when one has about 200 engineers deployed on the project. We certainly do not have that scale of activity. I believe it is absolutely essential—and I have regularly repeated this as something that is important—to understanding the global setting to have people who have experience of the international dimensions of nuclear projects globally. We seek to maintain on behalf of government the ability to assess what is happening globally, but I think that is distinctively different from directly contributing to a substantial engineering project. I want to make that distinction clear.

Senator LEYONHJELM: Thank you for that. You mentioned in your earlier evidence that you have a commercial-scale Synroc plant—the first to be constructed. Can you describe it? What are your expectations from it?

Dr Paterson : Synroc remains one of the best conceptual frameworks to deal with certain intractable nuclear wastes. The early work done by Ted Ringwood at ANU was transferred into ANSTO, and preliminary engineering work has been done on a number of different Synroc systems over the years. We had an engineering capability which continued to work in the area and to look at alternatives to how one could produce a viable Synroc plant. About six years ago we asked whether we were in a position to provide for our own needs as a country for a waste solution for the intermediate-level waste that is produced from research reactors. Indeed, it was an engineering scoping study that we undertook at the time that showed that the economics of Synroc is somewhat better than the current waste treatment paradigm, which is to encapsulate the liquid wastes into a cemented product. Not only would Synroc considerably reduce the volume, it also more safely and more sustainably contains the nuclear waste.

The reduced volume and the better safety case together add up to a considerable advantage. It is oversimplifying but nevertheless true that the economics of nuclear waste is highly correlated with the volume that is produced and, if you can reduce the volume, that is a positive outcome. So it was decided, in concert with the further development of our nuclear medicine capabilities, to further develop the engineering of the Synroc technology. This indeed will be a first-of-a-kind nuclear technology developed in Australia and constructed into a plant for the first time.

Simply put, one takes the liquid, formulates it with some other materials, dries it, calcines it—that means you heat it to get all the residual water and other gases out of the material. You put it into a special system where you hot isostatically press it. That means you use gas pressure to reduce the volume and to form the Synroc itself. Then you move it out of the back of the plant, put it in specialised racks and then, hopefully in the not-too-distant future, take it to a national waste repository for storage until a longer term, full system is provided for its long-term disposal.

Senator LEYONHJELM: What is the significance of having a commercial-scale plant? What, if anything, will that demonstrate?

Dr Paterson : Firstly, I think Australia, as the inventor of Synroc, was always expected to be the first mover in producing a commercial-scale plant. We have had huge interest internationally in people coming to find out what we are doing about Synroc and asking us questions about what this could mean for a wider ranging set of global solutions using Synroc. In fact, some of our people have been discussing in the UK just last week what the opportunities are for Synroc technology particularly for difficult and intractable nuclear wastes. It is probably not in the short term going to be a mainstream solution for high-level waste from nuclear power plants, for example, but there is reason to believe that, if we can develop the technology for these intractable wastes and it starts to replace some of the current solutions which are less optimal, we will develop a global marketplace. I think the important thing from an Australian point of view is to retain the architect engineering capability here in Australia so that we can potentially be part of that global supply chain. So this is somewhat speculative, but it is also, I think, based on achieving the first plant to be put together in the world. It is an attractive opportunity.

Senator LEYONHJELM: But you will not be able to use it for the waste produced by the Lucas Heights reactor?

Dr Paterson : Typically not, because the route that we tend to use is the US take back program, so there are no waste implications for the US return. In future it might be possible in concert with the people who reprocess nuclear reactor fuel. Spent fuel we do not really regard as waste, because one can reprocess it and re-utilise the uranium that is not—

CHAIR: I might have heard that before somewhere!

Senator LEYONHJELM: I will stop there.

CHAIR: No, don't stop! Recycling spent fuel rods is a very good program.

Senator LEYONHJELM: Just ignore recalcitrant chairs!

Dr Paterson : I think the important thing is we would certainly discuss with anybody who was engaged in reprocessing fuel from the OPAL reactor the potential for including a Synroc step in the final disposal.

Senator LEYONHJELM: Do you anticipate this could or will be a commercial opportunity?

Dr Paterson : We are certainly working on the basis that, if we have a plant at a scale that demonstrates that this can be used for liquid wastes of an intractable nature from nuclear medicine production, a number of other actors will become interested in whether this can be used for other intractable waste forms. The early information is that a number of people have already spoken to us and come to understand the extent to which the engineering has developed and so on. I think it will get a little bit more real as we start to construct that plant and as the engineering solutions become more widely known in the community. We are undoubtedly competing with established ways of dealing with this waste. We believe that, after it is well demonstrated, Synroc will be attractive to, for example, new entrants into nuclear programs around the world or particular actors who do not themselves have the capability to deploy a waste solution. I do not want to overplay this, but I do want to say that one of the key reasons that we are doing this is to develop the engineering capability and seek to retain it in Australia as a springboard for future application.

Senator LEYONHJELM: Hear, hear! Sounds interesting. Thank you very much.

Senator LUDLAM: I might carry on in that vein because it is a really interesting line of questioning. When did ANSTO or your predecessor organisation begin the development of Synroc?

Dr Paterson : The Synroc technology was developed in the early eighties. It went through a number of stages of development within ANSTO which I would call mainly a demonstration of unit operations and core technologies. That continued really until 2009, when we decided to see whether the economics was real or not. It was when we did those techno-economic studies at the time that we found that it was really attractive relative to the other waste solutions.

Senator LUDLAM: So a little over 30 years in total.

Dr Paterson : I think that is a good calculation.

Senator LUDLAM: What is the present per-kilogram cost of isolating—isolating is the wrong word, I guess—encapsulating liquid reprocessing waste in Synroc?

Dr Paterson : I am unsure as to whether you are talking about kilograms of Synroc or kilograms of waste.

Senator LUDLAM: Kilograms of waste irrespective of how many kilos of Synroc that generates.

Dr Paterson : I will take that on notice in terms of how we characterise the waste in terms of kilograms, because we do not really think of it in terms of kilograms but rather activity.

Senator LUDLAM: I am happy to take your per-activity metric.

Dr Paterson : The per-activity metric is the comparison between cemented waste and Synroc, and the volume reduction is from about 3,000 litres of liquid down to 500 litres of Synroc pre final packaging. That compares with an increase in volume with cemented waste.

Senator LUDLAM: You measure Synroc in litres before you calcine it and solidify it in to blocks? You are not producing a liquid material, are you?

Dr Paterson : No. You start with a liquid material, and finally it is compressed into a mineral form. For clarity: 'Synroc' stands for synthetic rock, and really the breakthrough that Ted Ringwood made was to find these very ancient rocks in which the radionuclides do not diffuse very far. The synthetic rock mineral formulations which he developed and were subsequently developed all over the world essentially have the character that they would contain that waste in a very efficient way.

Senator LUDLAM: It is not water soluble?

Dr Paterson : Absolutely. It is resilient because it is based on ancient rocks which have demonstrated their ability to maintain their character over long periods of time.

Senator LUDLAM: I am a little bit perplexed as to why you could not provide us with a unit cost of encapsulation at the moment.

Dr Paterson : As you would be aware, with a first-of-a-kind plant, part of the questions we are asking is the final cost to be determined by the plant economics. Since that has never been demonstrated, part of the role of the plant is to establish that engineering baseline.

Senator LUDLAM: Does it bug you a bit that we have been at this for 30 years and you cannot give us a unit cost estimate of what it is actually going to be worth?

Dr Paterson : I think that it is actually quite exciting because the work that has gone into the chemistry, the mineralogy and the qualification of the different range of options that we have with Synroc has kept us at the forefront of nuclear waste discussions. In fact, recent monographs that have been put together around recent nuclear waste opportunities—for instance, in the United States in the last three years—continue to advance Synroc as one of the most attractive opportunities that have not yet been properly explored.

Senator LUDLAM: I understand that you have taken on notice to provide us with some cost estimates of various economies of scale, if you like?

Dr Paterson : Yes. I think scale is the correct way to approach it.

Senator LUDLAM: So what it costs at the moment at the pilot scale and what you anticipate it will cost on a commercial scale.

Dr Paterson : This is not a pilot scale; this is a scale that would deal with our intermediate level liquid waste. That is why I say it is a commercial scale plant because it is not scaled to be a pilot plant. Certainly if we were doing something like an intractable waste in, say, parts of the United States, it would look like a pilot scale plant because the volumes are quite small.

Senator LUDLAM: I understand.

Dr Paterson : If another nuclear medicine provider wanted such a plant, they would be looking at a full-scale plant.

Senator LUDLAM: All right, just whatever you can provide us by way of estimates. How would you characterise Synroc, assuming it can be made to work on a commercial scale and not be prohibitively expensive? How is the reprocessed material that will come back from Europe at the end of this year or early next year to be positioned temporarily at the new Lucas Heights facility—and I want to ask about that in a moment—and eventually maybe somewhere else, any different from material that was encased in Synroc? Are we getting some kind of second-best product compared to what you think you could put on the market if you get to scale?

Dr Paterson : The best solution for the type of waste that is returning to Australia now is in fact the one that we have as a solution, which is a vitrified waste—that is, it is encapsulated in a glass form. In relation to the difference between a glass form and a Synroc product, probably the long-term resilience of the Synroc waste is going to be higher but the vitrified waste is already qualified from a safety case point of view for the requirements that have been established by regulators around the world.

Senator LUDLAM: But is Synroc going to be a more resilient product?

Dr Paterson : One of the advantages of Synroc is that as we develop the technology—and I do not want to overanticipate this—we might be able to get higher waste loadings than is the case with currently vitrified products.

Senator LUDLAM: What do you mean—more waste into a given kilogram?

Dr Paterson : More waste per kilogram of the material, but Synroc is now entering what I call the real engineering phase and full demonstration with radiological materials. This has been done on a small scale around the world, but this is the first time that it has been done on full scale so it would be wrong of me to overanticipate all of the outcomes so I am sketching a scenario rather than an economic assessment.

Senator LUDLAM: Yes, I understand and you have undertaken to provide us with some estimates on cost. Apart from anticipated potential greater density of radioisotopes per kilogram, in what other ways is Synroc superior to the vitrified form in which the waste is coming back to Australia?

Dr Paterson : Over the long term the diffusion lengths of those materials in a Synroc material will be shorter over time than for the vitrified material.

Senator LUDLAM: Just spell that out for the layperson. Firstly, what do you mean by 'longer term'?

Dr Paterson : What we are talking about here is a waste solution that potentially could be available for the full requirement for an intermediate level product.

Senator LUDLAM: Tens of thousands of years?

Dr Paterson : Which would be tens of thousands of years because they are based on rocks that are millions of years old.

Senator LUDLAM: When you say 'diffusion pathway', you mean?

Dr Paterson : So let us assume that I am a radioisotope and I am in a rock or I am in a glass. I am saying that if I am in a rock I am going to go less far than if I am in the glass because the glass has got more places that I can move through.

Senator LUDLAM: It is still going to leak out of the material but it is going to take a lot longer to leak?

Dr Paterson : I think 'leak out' is an overstatement. The diffusion lengths over billions of years in some of these rocks are shorter than a metre, so that is a really short length over that period of time.

Senator LUDLAM: Why we would dump a bunch of vitrified glass bricks in the outback if you believe ANSTO might be onto a commercial scale solution that would trap it more effectively over those long periods of time?

Senator Ronaldson: I think there is a fair bit of commentary in there. I think Dr Paterson can answer some sensible questions—

Senator LUDLAM: Yes, it has been quite a useful conversation. What is this intervention about?

CHAIR: It is not a chat room. We have some deadlines. I am not looking to—

Senator LUDLAM: We were doing reasonably well until the minister intervened.

CHAIR: We are doing quite well, but I am up against some time constraints.

Senator LUDLAM: I understand. I am trying to—

CHAIR: So do not get into a chat. Just keep it to the questions.

Senator LUDLAM: If you could just call the minister to order, we are doing quite well—

Senator Ronaldson: If you stick to questions that Dr Paterson can answer, I think we will be able to—

Senator LUDLAM: I am happy to rephrase it and see if we can move this along. If ANTSO is working on a solution that you believe is superior to vitrified glass, for what purpose would we be proceeding with a remote waste facility for a product you believe is inferior to Synroc?

Dr Paterson : I think 'inferior versus superior' is the wrong discourse. It is whether it is fit for purpose and meets the safety requirements. I believe the vitrified solution which is coming back from France and from the UK is the best-in-class, fit-for-purpose solution that is available today—which is when we have the obligation to take the waste back. I would not characterise it in any way as superior or inferior.

Senator LUDLAM: I understand we have an obligation to take it back. I think taking it back is probably the least worst option. We do not presently have an obligation to dump it at a remote site, though, do we? We could hold on to it for a period of time while you develop—

CHAIR: Are these not matters for government? Is there not a tender process—

Senator LUDLAM: Okay, you can dodge it that way.

CHAIR: No, that is not fair. This is ANSTO. They are here. You know what their charter is. Their charter is certainly not in the areas you are talking about.

Senator LUDLAM: I will just come back to some budget line items and then I will finish up. Can you provide us with an update—I know you touched on this earlier. There is $22.3 million for radioactive waste storage outlined in the budget. How much of that is accruing to the site you are putting together at ANSTO as opposed to forward planning for a remote site or some other solution?

Dr Paterson : The funding contained in the current budget has two elements. One is the repatriation of waste from the UK. That is not going to create any new facilities at ANSTO but is intended, in the best of all possible worlds, to go directly to a national waste repository. That would be the best outcome. Depending on when the national waste repository and store is completed, there are plausible scenarios within which the UK waste return might go there directly without having to come to an interim store at ANSTO. The second part, the $22.3 million over three years, is for interim radioactive waste storage. That is to ensure that we are able to store the waste that is currently on the site and that is being generated in our current operations—to ensure that it is adequately handled until the national waste store and repository are ready for use.

Senator LUDLAM: Can you clarify this, because that is different from how I understood the Commonwealth was proceeding? There is a national site selection process underway that Minister Macfarlane has carriage of. I think we take that on tomorrow morning, from memory, so I will not ask you to speak in too much detail about that. But that is not meant to conclude with site selection until the middle of next year, and then licensing approvals, construction and operation would take another year or more after that. That is pushing us well into 2016 or 2017 if it runs according to the minister's timetable. Are you suggesting that waste from the UK could go straight there? That would imply delaying its return.

Senator Ronaldson: I might get the secretary to advise you what the process is so that we are clear.

Senator LUDLAM: This is different from what has been described to us in the past. My understanding has been that the material from Europe was coming to be temporarily stored at Lucas Heights and then transferred.

Dr Paterson : The French waste return is due to come back to Australia in the latter part of this year. That will go to an interim store which has received an operating licence from the regulator and is ready to receive that waste. The regulator has not authorised, at this point, the return of UK-denominated waste to that interim store. It is certainly ANSTO's preference that, if the timing were propitious, we would return the UK waste directly to a national radioactive waste store.

Senator LUDLAM: Do we have any contractual obligations in terms of timing like we did with the French material?

Dr Paterson : We have a series of obligations with the UK and some negotiating positions. There is considerable flexibility at this point.

Senator LUDLAM: You are decoupling the return of the French material later this year from the material that, I think, originated from Dounreay or Sellafield originally? When is the latest that we could bring it back?

Dr Paterson : I think your summary is correct. I do not have a latest date because there might be negotiations that could change those dates.

Senator LUDLAM: Will that cost us money? I understood we could have renegotiated the French material but it was likely to have a cost implication.

Dr Paterson : All of the implications of the UK actions that we have taken have reduced the cost to Australia.

Senator LUDLAM: Would negotiating for an extension of time before repatriation cost money?

Dr Paterson : We would always seek to look at the costs from the perspective of a responsible approach to the waste and the appropriate minimisation of costs.

Senator LUDLAM: Are there any plans for community consultation regarding the new facility—which you have said has received its licences for receiving the French waste—at least? Can you tell us what consultation there has been regarding operation of that facility and transport to and from that facility; at least in the immediate environment in Sutherland Shire?

Dr Paterson : There has been ongoing consultation with all of the stakeholders. ARPANSA has also conducted two requests for public engagement and consultation. The consultation has been extensive and we will continue to consult with all of the stakeholders.

Senator LUDLAM: Could you provide for us, on notice, details of what occurred and some sample copies of the materials that were distributed at those meetings? I appreciate that those have been done. I am sure they were valuable for residents. Finally, has ANSTO changed any security arrangements following the September 14 security incident where a number of—

Senator Ronaldson: Mr Paterson can take on notice material provided and distributed by them but not by others, clearly.

Senator LUDLAM: That is fine—material by either ANSTO or ARPANSA, if you have got copies.

Dr Paterson : We will consult with ARPANSA and, if they are happy for us to submit it, we will do that.

Senator LUDLAM: I am presuming that if it was distributed at a public meeting it is not going to be top-secret.

Dr Paterson : The difficulty would be that I do not want to act on behalf of the regulator, because—

Senator LUDLAM: I understand. Finally on security—and again on notice if you would prefer, or I could take this to the AFP I guess—have there been any changes to site security following that incident in September of last year where a number of men were intercepted by police on site?

Dr Paterson : There have been some changes to the security arrangements on site. The previous safety supervisory function, which was called SOS, has been replaced with an outsourced function.

Senator LUDLAM: Since that event you have outsourced an element of your security?

Dr Paterson : Correct. Our site control room has now got a different set of management arrangements. I think it is important to be very clear that the incident that you referred to was not on the ANSTO site; it was off the ANSTO site. And there was at no time a suggestion that there was an attempt to enter the ANSTO site.

Senator LUDLAM: I understand that. On notice, if there are any further details you would like to provide, particularly about the subcontracting arrangements—I will leave it there.

CHAIR: Dr Paterson, we thank you and your officers from ANSTO for coming today and providing the testimony that you have. As I said, I encourage any senator here to go to the facility; it is beyond impressive. I wish you well as you continue through your construction phase there because, with an ageing population, the work you do is going to be very important for medical intervention for many Australians and indeed many people around the world.

Senator Ronaldson: We are very lucky to have this level of expertise in this country.

CHAIR: Somewhat blessed, Minister, yes. Thank you all very much. You do not mind if we table your opening statement, do you?

Dr Paterson : We would be very happy to put it in.