UPDATE: Australia's Opposition Would Export Uranium To India If Elected

Australia's main opposition Liberal-National coalition of center-right parties said Tuesday it will open up uranium exports to India if it wins power in the federal election on Aug. 21.

Tony Abbott, leader of the coalition, told reporters that Australia's relationship with India has been "badly mishandled" by the ruling Labor government, and allowing uranium exports would be one way to repair ties.

The ruling Labor government, led by Prime Minister Julia Gillard, opposes uranium exports to India, which isn't a signatory to the nuclear non-proliferation treaty.

Indian lawmakers have been vocal in their disappointment about Labor's stance.

The relationship has also suffered in recent times from a number of diplomatic dust ups, notably a series of racist attacks on Indian students studying in Australia, which have cast a shadow over the country's international education market--a key export sector.

"The Gillard Labor government's position is clear. We will only supply uranium to countries that are signatories to the nuclear non-proliferation treaty and have signed a bilateral agreement with Australia," Australia's Resources and Energy Minister Martin Ferguson said Tuesday.

"Labor supported the additional safeguards and International Atomic Energy Agency monitoring now in place for India's nuclear power industry through the Nuclear Suppliers Group arrangements between the U.S. and India," Ferguson added.

Exporting uranium to India is a long-held policy goal of the conservative coalition. Former conservative Prime Minister John Howard had planned to open up uranium exports to India in 2007, before his government was defeated by Labor in the last general election.

"India is one of the coming super powers. It is obviously going to have a very important place in our region as well as in the world," Abbott told reporters.

"One of the best things that we could do to boost our relationship with the region is to sell them uranium," he said, adding: "If it is good enough for the Americans, it should be good enough for us."

India and the U.S. agreed a civilian nuclear pact in 2008, which will not only allow the country to access sophisticated technology from countries such as the U.S., France and Russia, but also to buy uranium to fuel its plants.

Key beneficiaries of a coalition election win, and subsequent push for uranium exports to India, are likely to include Rio Tinto PLC and BHP Billiton Ltd. Rio Tinto owns 68% of Energy Resources of Australia Ltd., operator of the Ranger uranium mine in Northern Territory, while BHP owns the Olympic Dam uranium mine in South Australia.

Opinion polls show Abbott's conservative coalition has a chance of defeating Labor at this month's ballot, although a Newspoll on Monday put Labor narrowly in front.

Analysts say the election will be won or lost in key marginal seats, particularly in Queensland state, with both sides of politics hosting their official campaign launches in the capital, Brisbane, and dedicating significant campaign time to the region.

Australia has almost 40% of the world's uranium resources and along with Canada is a major global supplier, exporting 9,339 metric tons in 2009 valued at A$1.07 billion.

India, among the fastest growing economies in the world, is looking to expand overall electricity generation capacity to bridge its peak-hour shortage, which widened to about 13% in May from about 12% a year earlier.

It is looking to non-conventional sources of energy such as nuclear, wind and solar to shoulder part of the energy burden caused by its expanding economy.

Nuclear power is currently less than 3% of the country's total generation but has the potential to become a cost effective, low carbon source of electricity in the long term.

Nuclear Power Corp. of India Ltd., or NPCIL, is so far India's only nuclear power plant operator. The federal government restricts private firms and other state-run companies from setting up such projects for security and safety reasons.

-By Rachel Pannett, Dow Jones Newswires; 61-2-6208-0901; [e-mail]

(David Winning in Sydney contributed to this article)