Nuclear divisions | Features | The Australian

Expansion of uranium mining is giving Kim Beazley the policy jitters and opening the door for others to take the initiative, writes Tom Richardson
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April 10, 2006
MIKE Rann is a self-proclaimed fan of Stanley Kubrick's 1964 film classic Dr Strangelove, or How I Learned to Stop Worrying and Love the Bomb. It's a fitting cinematic choice for the South Australian Premier, who is spearheading a campaign that could be subtitled "How the Labor Party Learned to Stop Worrying and Love Uranium".
In the wake of the federal Government's historic uranium export agreement signed last week by Chinese Premier Wen Jiabao - and with the prospect of a similar deal with India - the ALP has been besieged by speculation over when, or even if, it will overhaul its widely condemned policy limiting uranium mining in Australia.

While federal Labor leader Kim Beazley seems frozen on uranium policy, Rann is making the running after beginning his career as a staunch opponent of nuclear power. Rann now stands to be the beneficiary of what will almost certainly become the world's biggest uranium mine, Olympic Dam, which mining giant BHP Billiton last year acquired in a takeover of WMC.

Export licences must be granted by the commonwealth, but the South Australian Government has final say over exploration and mining in its backyard. The state ALP maintained its opposition to new uranium mines at its last annual conference, but it was a case of forfeiting the battle before the inevitable war timed for the party's national conference in April next year.

Rann recently upped the ante, calling the national ALP policy "anachronistic and therefore ... likely to be changed". A year out from the conference, uranium mining is already proving one of the party's most divisive issues. Beazley insists the general public is "very cautious" about the nuclear industry, saying Labor will "hasten slowly" to work out its policy position.

Beazley's softly-softly approach is rankling with some of his colleagues, who fear a debate will further divide a party already reeling from a spate of bloody factional brawls over preselections. Four Labor frontbenchers have come out in support of a change to allow state Labor premiers to approve new mines to meet Chinese demand.

But Beazley insists "there is more than enough uranium around and slated for production to deal with any level of demand that arises from China in the medium term".

Many expect the party to opt for a default position at next year's conference, whereby "each state can make up its own mind".

"I would expect a fallback position: if South Australia wants to dig up their uranium, let them; if Western Australia wants to leave it in the ground, they can," said one South Australian source.

Ian Hore-Lacy, head of the Melbourne-based Uranium Information Centre, says change in the ALP is long overdue, particularly with "obvious prospects for mining being held up in Queensland and WA".

"Obviously there's an expectation of change - the policy is so ludicrous, it's unsustainable ... The industry is conscious it makes Australia a bit of a laughing stock," Hore-Lacy says.

In 1977, the ALP adopted a policy of total opposition to any mining, processing and export of uranium, with then-leader Bill Hayden saying: "A Labor government will repudiate any contracts signed by non-Labor governments." When the Hawke government was elected in 1983, Labor adopted its three mines policy, allowing no further expansion beyond the existing uranium mines at Ranger and Narbalek in the Northern Territory, and the fledgling Olympic Dam project at Roxby Downs. The policy allowed the ALP to have its cake and eat it, ostensibly appearing anti-uranium, but able to reap the benefits of uranium production.

But the relatively small Narbalek deposit was quickly mined out, and the project was closed in 1988.

The ALP maintains its opposition to any new mines, but Beazley has declared he will not shut any mines approved by state or federal Liberal governments. The previous South Australian Liberal government opened a mine in Beverley in 2000, and granted construction approval to the Honeymoon project, near Broken Hill.

Labor divisions over uranium have never been resolved, but it is only now, with world uranium prices and international demand increasing, that the wounds are once again exposed. WA, Victoria and NSW favour the status quo, but some in the South Australian and Northern Territory governments have made no secret of their opposition to the three-mines policy.

South Australian Treasurer Kevin Foley slams it as "idiotic", while Rann says: "There's no real issue in the South Australian party, because we've got the world's biggest uranium mine."

Significantly, last week Queensland Premier Peter Beattie, whose opposition to uranium has been driven by a desire to protect the state's coal exports, signalled a softer stance, saying: "I don't want to see anything that would undermine Queensland's coal ... but obviously if the Labor Party changes its view on uranium we would follow suit."

Martin Ferguson, the federal Labor resources spokesman, has articulated the need for industry development, saying he has noticed a change in perception, both "in the community and among some of my colleagues in the party".

"In the 1970s, uranium mining was identified as akin to a campaign against nuclear war," Ferguson says. Now, he argues, the debate has turned to delivering greenhouse-friendly energy.

While Ferguson is open to debate about the future of Labor's no-new-mines policy, he argues that "Australia doesn't have to have a change in ALP policy to be the largest exporter of uranium in the world".

The expansion of Olympic Dam will see to that. But Ferguson believes giving BHP Billiton carte blanche to expand while not allowing other players into the market will "create serious questions in people's minds".

"If you are the biggest exporter with the biggest mine in the world, is it acceptable to say: 'That's good for BHP, but not for other smaller companies'?" he says.

"I personally have always had an open mind on this issue ... Obviously it's more important for SA and the NT than for NSW and Victoria because they're resource-rich states. Uranium mining, like any opportunity, is about growth and jobs. Olympic Dam creates an opportunity for thousands of jobs and a tripling of production size; that's nothing to be sniffed at."

Hailing from the Labor Left, Ferguson, a one-time Miscellaneous Workers' Union secretary and ACTU president, says the uranium debate has "historically been argued along factional lines".

But others in the party are lobbying for change, with Australian Workers' Union national president Bill Ludwig pushing for uranium development, saying the union had "no in-principle opposition to nuclear power, provided it is done in a responsible way".

While the AWU is a right-wing union in most states, in SA it traditionally votes with the Left, and is yet to publicly express a position on uranium. The state's AWU secretary Wayne Hanson says: "I don't think uranium is anywhere near the sensitive issue that it was in the 20th century ... whether it's three mines, or five mines, or more, the stuff is still being mined, isn't it?

"I'm not convinced yet that we can come up with all the necessary safeguards to address the ramifications of using uranium, but the fact is I'm more concerned about the workers in the industry," Hanson says.

BHP Billiton is still awaiting environmental approvals from state and federal agencies for Olympic Dam, but it anticipates an expansion from its present 4500 tonnes of yellowcake a year to 15,000 tonnes by 2010. The new open-cut mine stands to be about 3km long, 2.8km wide and 1km deep, enough to swallow the entire Adelaide CBD and more.

"Out there will be the world's biggest open-cut mine, worth hundreds of billions of dollars," Rann said on a recent visit to the site.

"This is like witnessing the beginning of another Broken Hill - only better."

Long-time observers, including Liberal stalwarts, cannot believe their ears. Roger Goldsworthy, the man who signed the deal giving the Roxby project life, is convinced Rann has achieved a genuine conversion.

In 1982, Goldsworthy negotiated an indenture with Western Mining, who then ran the mine at Olympic Dam, giving the company a 50-year lease and exclusive rights of entry to the land.

The 1979-82 Tonkin Liberal government also pushed unsuccessfully for the latent Beverley and Honeymoon mines to be opened, and argued for a uranium enrichment plant, which never eventuated. Then-Labor leader John Bannon labelled the Olympic Dam mine "a mirage in the desert" and the prospect of a uranium-led boom "pie in the sky". Another strident critic in the early 1980s was Bannon's press secretary, Mike Rann.

"He was doing his best to can the project," Goldsworthy says.

"If we'd been able to press on in 1982 with those other mines, they'd be up and operating now and we could well have had an enrichment plant up and running as well ... It's been a damn hindrance (and) it's put the state back 25 years in terms of further development."

In 1982, Rann penned a 32-page booklet Uranium: Play It Safe espousing the prevailing wisdom in South Australian Labor: "Underground uranium mines have proven the worst source of radiation contamination for miners ... Obviously if an immensely dangerous substance like plutonium - an essential ingredient in the manufacture of nuclear weapons - got into the wrong hands, world peace could be threatened."

Rann now dismisses such views as the product of youthful political naivete, fairly arguing that he is not the only public official to have changed his mind over more than 20 years.

Goldsworthy agrees, noting that Rann appears to have recognised changing public attitudes to uranium mining.

"Politicians tend to follow the public mood and the public has come largely to accept that this is a very valuable mine ... Often if you lose an opportunity, it's gone. In this case it's come back 25 years later," Goldsworthy says.

"The state Labor Party has come good, no doubt about that."

There are signs that even the Left of the ALP is changing the tune it has sung for almost three decades. South Australian Left powerbroker Mark Butler strongly argues for an open and structured debate. "I personally wouldn't be sticking my hand up to oppose a new policy just because that was what the Left did 25 years ago," Butler says.

"The debate is already on, and the national conference is 13 months away ... The sooner we can put the issue to bed one way or another, the sooner we can get on with the issues that affect the day-to-day lives of the electorate.

"I still think safety and proliferation issues are very big hurdles, and we haven't had enough information about them yet, but I think the big fact that's changed is the capacity for nuclear power to contribute to a reduction in fossil fuel emissions, particularly in China and India ... that's probably the big issue that wasn't on the agenda 25 years ago."