Australia reconsiders Russia uranium deal

By Rob Taylor

CANBERRA (Reuters) - Australia said on Monday it was reconsidering a deal to sell nuclear fuel to Moscow after Russia's military incursion into Georgia.

Australia's previous conservative government agreed in September last year to expand a small-scale 1990 deal to sell uranium to Russia on condition it was not sold on to Iran.

"When considering ratification, the government will take into account not just the merits of the agreement, but recent and ongoing events in Georgia," Foreign Minister Stephen Smith told parliament.

Former prime minister John Howard, signing the new treaty with then President Vladimir Putin at a meeting of Asia-Pacific leaders in Sydney, had said "stringent" controls would ensure uranium was not used in nuclear weapons.

But lawmakers considering whether the treaty should enter into force said on Monday that now Prime Minister Putin was unlikely to abide by the terms of a treaty and safeguards for the use of Australian uranium in Russia's civilian nuclear industry.

"I don't know if you've looked on the TV into Vladimir Putin's eyes. He is one tough son of a gun and I don't think that he cares about what we think," committee chairman Kelvin Thomson from the centre-left Labor government told parliament.

"Recently he's taken South Ossetia and another province off Georgia, and there's no real comeback over that," Thomson said.

Smith called in Russian ambassador Alexander Blokhin last week to express concern over events in Georgia and instructed officials on Monday to hand a letter to Russia's embassy warning the uranium deal was being re-considered.

Russia, China and India are all anxious to buy Australian uranium to develop civilian nuclear energy. Australia has 40 percent of the world's recoverable uranium.

The Labor government is refusing to sell nuclear fuel to India because it has not signed the Nuclear Non-Proliferation treaty. Australia is one of 35 International Atomic Energy Agency board members and already sells uranium to 36 nations.

Environmentalists, including the Australian Conservation Foundation, say the Moscow deal is no longer appropriate after Russia's military thrust into Georgia.

John Carlson, the chief of nuclear watchdog the Australian Safeguards and Non-proliferation Office, told the committee Moscow was unlikely to breach the treaty because despite its own domestic reserves, it needed Australian uranium to meet future demand for electricity.

"If Russia abrogates a safeguards agreement, clearly the state concerned, Australia, plus all others with similar agreements, would terminate supply," Carlson said.

($1=A$1.17)

(Editing by Jeremy Laurence)