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Thursday, 29 March 1984
Page: 871

Senator CHANEY —My question is addressed to the Minister for Resources and Energy. I refer him to reports which have appeared in the media over the past two days about a paper said to have been prepared by him which aims to change the Australian Labor Party's uranium policy when it is discussed at the July national conference. I preface my question by saying that the Opposition welcomes any move which would bring some rationality into the current policy which is completely devoid of both logic and principle. In view of the likely liberalisation of the policy at the conference, will the Government act immediately at least to allow companies which wish to negotiate in the market- place for new contracts to do so? Has he noted the reply of the Deputy Prime Minister in the House of Representatives yesterday, when Mr Lionel Bowen relied on the existing spot price as a reason for dismissing the relevance of new contracts? Does the Minister accept that the current spot price is not a significant factor when it comes to prospects for long term contracts with so little of Australia's uranium being traded on the spot price basis?

Senator WALSH —The significant point of Senator Chaney's question-I think he would agree-is the question of the issuing or granting of negotiating determinations to potential suppliers. That, as he knows, of course, is administratively a matter for the Minister for Trade and not for me.

Senator Chaney —You represent him.

Senator WALSH —I represent him, yes. I will refer the question to him. But I would not expect that the Minister would be issuing such new determinations prior to the review of the Party's policy on all matters at the National Conference, which is now only three and a half months away. I would agree that the spot price at any particular time is not necessarily a reliable indicator of the prices that are likely to prevail when delivery is actually made, which for uranium contracts is frequently anything from five to 15 years from the time of signing to final delivery. However, an indicator of the general weakness of the market is the fact that stocks currently held are equal to five to six times present consumption and that production is still in excess of consumption, in other words, that high level of stocks is still accumulating.

Senator Jessop —What about by 1990?

Senator WALSH —If every uranium mine in the world closed down as from next year, the world would have run out of uranium by 1990. That, approximately, is the position and that gives some indication of the magnitude of oversupply of the product. No other commodity, even those which are heavily recessed, such as tin and copper are at the moment, carries stocks anything like five to six years' annual consumption. The projections of demand in the 1980s and the 1990s have been substantially reduced.

For all these reasons, the market is extremely slack. This confirms the judgment made by the Government last year that on commercial grounds alone there would be no room, almost for the rest of this century if not for the rest of it, for any uranium in Australia other than that that can be produced by the two existing mines and Roxby Downs, should the joint ventures make a decision to go ahead.

Senator CHANEY —I have a supplementary question. If there is no commercial possibility of making contracts, on what basis in logic does the Government deny companies the opportunity of going out to sell the uranium that they have under their control, given that if the Government is right they will not be able to sell it but if the Government is wrong the basis which the Minister has put before us is clearly wrong?

Senator WALSH —Subject to confirmation by the Minister for Trade I state now that there are two companies with negotiating determinations which have the right to do just what Senator Chaney has said; that is, the two present miners. So far as I know they have not submitted any applications for endorsement of additional contracts, but I will check that with the Minister for Trade and see whether he has anything to add to what I have already said.