India trade deal reignites Australia’s uranium wars

Prime Minister Anthony Albanese’s lucrative trade deal with his Indian counterpart has ratcheted up tensions over an allied state and fueled both uranium advocates and anti-nuclear campaigners.

The agreement signed with Indian Prime Minister Narendra Modi on Thursday will allow Australian companies to sell uranium ore to the rapidly expanding Indian market.

As India seeks to decarbonise and massively increase its power supply to support its ambition to become an AI powerhouse, Australian miners are scrambling to meet rising uranium demand and prices.

But despite being home to the world’s largest uranium reserves, Australia is only the fourth largest producer of the radioactive ore.

This is because uranium mines are currently only operating in South Australia and the Northern Territory. New uranium mines are banned in all other states.

Western Australia’s traditionally mining-friendly Labor government has banned the development of new uranium mines since 2017, but the resources industry and the Liberal-National opposition have stepped up campaigns to overturn the moratorium.

Tania Constable, director general of the Minerals Council, says the opportunity for India to deliver a potentially massive nuclear production program will add further momentum towards removing “outdated and ideologically driven bans on uranium mining”.

“This includes state mining bans in NSW, Queensland and WA, as well as outdated federal laws that are not based on sound science,” he says.

Modeling by RMIT professor Sinclair Davidson, commissioned by the Minerals Council in 2024, found uranium could contribute $2.1 billion to the WA economy and create more than 1,000 direct jobs by 2050, assuming Australia’s global market share remains relatively stable.

Moreover, according to the Minerals Council, each gigawatt of coal-fired power that India replaces with nuclear power will prevent approximately 9.6 million tonnes of CO2 from entering the atmosphere each year.

Jonathan Fisher, managing director of Western Australia-based uranium explorer Cauldron Energy, says the benefits of lifting the ban will go beyond economic benefits.

Along the same lines as Australia, Western countries will face a uranium supply shortage in the 2030s and will need a significant production increase to meet their energy needs.

“You can’t underestimate how strategic uranium supply is for our partners like the US, UK and Japan,” Mr Fisher told AAP.

“That’s what I call the Trump card, right? If you go to the United States and say, ‘Look, we’ll export you uranium, but you’re going to remove those ridiculous tariffs because uranium and energy security are much more important,’ that’s the biggest leverage we can apply.”

Australia’s three operating uranium mines are all located in South Australia: Boss Energy’s Honeymoon mine; Heathgate’s Four Mile mine; and BHP’s giant Olympic Dam mine, which contains just under a third of the world’s total uranium reserves.

Federal Resources Minister Madeleine King said that the Olympic Dam alone could meet India’s export needs.

“The bans in different states are certainly a matter for the states,” he told ABC Radio National on Friday.

But Mr Fisher says Australian producers have already reached the maximum.

“If we want to help India now, Australia needs to increase its production because we will not stop supplying the US, Japan and the UK,” he explains.

Mr Fisher says more supply could be made by working existing mines harder, but the biggest opportunity is to lift bans in WA, Queensland and NSW to expand the scope of mining.

He says it’s only a matter of time before the WA government lifts the ban.

WA Premier Roger Cook says the government is sticking to its pledge to not mine new uranium in the 2025 election.

“There are companies that have permission to mine uranium in Western Australia that have not yet found the commercial conditions under which that will happen,” he told reporters, referring to four existing mining licenses transferred in 2017.

Only one of these projects is still current: Deep Yellow’s Mulga Rock project.

But Mr Fisher says that to make this work, Deep Yellow has to significantly change its approvals, and its main focus is on the Tumas project in Namibia, where the government is much more tolerant.

“The Prime Minister has made this comment before, that it is not yet economical to extract uranium in Western Australia,” Mr Fisher says.

“Frankly, this is absolute nonsense.

“When the ban was implemented in 2017 the price was $20 per pound. Yes, it was uneconomic back then. Today it’s approaching $100 and let me tell you, it’s economical to mine in Western Australia.”

RBC Capital Markets analyst Alistair Rankin predicts the price will rise to $110 per pound in the long term.

The global uranium market is facing a structural contraction as AI hyperscalers and new large-scale nuclear reactors drive demand, he wrote in a research note.

WA Opposition Leader Basil Zempilas promises to lift the ban if elected.

Meanwhile, the LNP government in Queensland opposes lifting the uranium ban.

Mining Minister Dale Last said Queensland was working to exploit the state’s critical mineral reserves but uranium mining was not part of that plan.

Any decision to open up uranium mining would be politically worrying and lead to an uphill battle on the left wing of the Labor Party.

Steve McCartney, WA branch secretary of the Australian Manufacturing Workers Union, supports cooperation with India that creates safe, skilled jobs but “not at the expense of worker safety, communities or the environment”.

“Uranium mining carries serious long-term risks and any proposals need to be met with the highest levels of scrutiny, consultation and transparency,” he says.

“Instead of just digging more holes and exporting raw materials, we need to add value to our resources and create jobs here.”

Mr Albanese’s transformation from anti-nuclear advocate to uranium exporter has unsettled nuclear disarmament activists just in time for the ALP national conference.

Before becoming Labor leader, the Prime Minister campaigned to prevent the sale of uranium to countries that had not signed the Nuclear Non-Proliferation Treaty, influenced by his mentor and strident anti-nuclear activist Tom Uren.

Nuclear disarmament campaigner John Hallam said the decision to sell uranium to non-nuclear-weapon India should be met with “utter disbelief”.

“There has been strong resistance in Australia for decades to the sale of uranium to anyone, especially governments that might engage in nuclear war,” he says.

Ms King said there were strict administrative regulations on uranium exports and that India, like all Australian uranium importers, could only use it for peaceful purposes, as overseen by the International Atomic Energy Agency.