Melbourne: Sinosteel Corp., a Chinese mineral trading company, won Australian federal government approval to invest in PepinNini Minerals Ltd.’s A$160 million (Rs241,210 crores) Crocker Well uranium project.
The approval includes the Mt. Victoria uranium project that’s also in South Australia state, the Sydney-based company said on 4 April in a statement. Should a mine be developed it will be the first Australian uranium project financed by China, PepinNini has said.
Australia’s government allowed China, Asia’s biggest energy consumer, to explore for uranium last year as it seeks to expand investment to tap soaring demand for the nuclear fuel. Australia has 41% of global uranium reserves though it meets only 21% of demand due to the state-level bans on new mines.
“This approval facilitates the progression of the strategic alliance previously announced between PepinNini and Sinosteel to jointly co-operate in the development and operation of the Crocker Well and Mt. Victoria,” PepinNini said in the statement.
Sinosteel will invest A$41.2 million in the company, PepinNini said in September, and will own 60% of a joint- venture company to exploit the two deposits. Beijing-based Sinosteel has the option to take all of the uranium produced should a mine be developed.
Sinosteel, China’s second biggest iron-ore trader, agreed in February to link up with China National Nuclear Corp., the nation’s largest nuclear power plant builder, to accelerate exploring for and developing overseas uranium resources.
China plans to boost its nuclear energy use fourfold by 2020 and could tap Australia for nuclear fuel worth A$100 billion for power generation.
Prices for uranium, which is used to power plants that supply 16% of the world’s electricity, have surged more than fivefold in the past three years. Higher coal, gas and oil prices and pressure to cut greenhouse gas emissions, blamed for global warming, are driving increased use of nuclear power.
Australia’s Prime Minister John Howard has urged the states, controlled by the opposition Labor Party, to end the bans on new uranium mines.