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Canada-India uranium tensions thaw as Cameco strikes export deal

India's Prime Minister Narendra Modi and Canada's Prime Minister Stephen Harper shake hands in Ottawa.

India's Prime Minister Narendra Modi and Canada's Prime Minister Stephen Harper shake hands in Ottawa.

Photo by Reuters

15th April 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Canada on Wednesday unveiled a C$350-million deal to supply more than seven-million pounds of uranium concentrate to India, signalling a new era for the two countries’ bilateral relations.

Canadian uranium producer Cameco announced that it had inked a supply agreement with the Department of Atomic Energy of India to provide 7.1-million pounds of uranium concentrate under a long-term contract through 2020.

The contract, Cameco's first with India, was hailed as a significant milestone after Canada banned uranium and nuclear hardware exports to India in the 1970s, when New Delhi was accused of using Canadian technology to build a nuclear bomb. India was accused of using a Canadian reactor given as a gift in 1956, to produce the plutonium for its first atomic bomb, detonated in 1974.

However, relations started to thaw in 2013, with the signing of the Canada-India Nuclear Cooperation Agreement, which effectively meant that Ottawa no longer saw New Delhi as a nuclear pariah but as a safe, responsible nuclear power despite its refusal to sign the Nuclear Non-Proliferation Treaty (NPT).

“Canada and India have a long-standing and mutual interest in expanding our trade relationship, particularly in the area of energy cooperation. This contract is a clear signal that our countries are open for expanding business partnerships together,” Canadian Prime Minister Stephen Harper said in Ottawa.

The contract was signed during an official visit to Canada by India’s Prime Minister Narendra Modi, who was making stops in Ottawa, Toronto and Vancouver during his visit to Canada.

India was the world's second-fastest growing market for nuclear fuel. The country operated 21 nuclear reactors, providing 6 000 MW of nuclear capacity, meeting about 3% of the country's electricity needs. Another six reactors totalling 4 300 MW were under construction and scheduled to come online by 2017. By 2032, India expected to have 45 000 MG of nuclear capacity.

"This contract opens the door to a dynamic and expanding uranium market. Much of the long-term growth we see coming in our industry will happen in India and this emerging market is key to our strategy,” Cameco president and CEO Tim Gitzel noted.

The signing of the contract was a clear signal of Canada’s increased energy cooperation with India and reflected the Canadian government’s efforts to promote greater trade and investment with India.

However, not everyone was happy about the announcement. MiningWatch Canada said in a statement that by signing the deal on the eve of the NPT review conference to be held in New York City in two weeks’ time, Canada was undermining and discrediting the key international treaty prohibiting the proliferation of nuclear weapons.

“India’s nuclear weapons programme is very active, as demonstrated by a series of nuclear test explosions. Moreover tensions between India and Pakistan, a country with its own nuclear arsenal, are running very high. The attitude of Canada is irresponsible and alarming,” an Indian participant at the World Uranium Symposium Shri Prakash commented.

“Despite rules specifying no military use of Canadian materials, some uranium from Canada could well end up in Indian bombs. At the very least, Canadian uranium will free up more Indian uranium for weapons production purposes," Dr Gordon Edwards of the Canadian Coalition for Nuclear Responsibility added.

With bilateral merchandise trade of nearly C$6.33-billion last year, on top of bilateral services trade of more than C$1.5-billion in 2013, a market of more than 1.2-billion people, and a predicted economic growth of 7.5% this year, India represented exciting opportunities for Canadian businesses.

Canada was the second-largest producer of uranium globally, with exports valued at more than C$1-billion a year. India was currently the fourth-largest energy consumer in the world and was expected to more than triple its electricity supply within the next 25 years.

In little more than a decade, India was expected to have the fourth-largest economy in the world.

India was Canada’s largest trading partner in South Asia and a priority market under Canada’s Global Markets Action Plan.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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