No. Date THE HON. ANDREW PEACOCK M.P.

M58 18 July 1979

NUCLEAR SAFEGUARDS POLICY : CONTROL ARRANGEMENTS  ON URANIUM CONCENTRATES YELLOWCAKE)

The Foreign Minister,  Mr Andrew Peacock, announced  today that the Government had decided that the export of  uranium will be permitted from Australia without a requirement  that Australian ownership be retained until it is converted to

a form suitable for fuel fabrication or enrichment.

He reaffirmed his statement of 27 June that there was  absolutely no question of watering down the Government1s nuclear  safeguards policy.

Mr Peacock recalled that the Ranger Uranium EnvironÂ­ mental Inquiry in its first report drew attention to the fact  that the full intensity of International Atomic Energy Agency  safeguards does not apply to uranium until it is in a form  suitable for fuel fabrication or enrichment,  i.e. is in the  form of UF6 (uranium hexafluoride),  U02 (uranium dioxide) or,  for certain reactors, natural uranium metal. The inquiry saw  this as providing opportunities for States to divert yellowcake  to weapons production. As a result the Government decided in  May 1977 that one of a range of requirements in any future sales

arrangements for exports of Australian uranium should be that  the uranium be in a form which attracts full International-  Atomic Energy Agency safeguards by the time it leaves Australian  ownership^ Â· '  As Vindicated at the time, this measure was additional

to those proposed by the Ranger Inquiry. The Inquiry saw the  simplest means of dealing with the situation as being to require  that no retransfer take place without Australian consent. Mr Peacock observed that prior consent to such retransfers was  one of the fundamental requirements of the Government1s safeÂ­ guards policy. It is included in the agreements which Australia  has already negotiated and will be included in future' agreements.

Mr Peacock said that a number of practical difficulties  have since become apparent,  the most important of which derives  from the Westinghouse anti-trust case. The Government's decision  was taken before the anti-trust suit by Westinghouse Electric

Corporation for treble damages had proceeded to judgment in the  United States against certain Australian companies. As a  result of the judgment:,, the requirement that Australian uranium  remainv.inlÂ£u0'tralian?0wnÂ£rship:-'would havfe placed shipments of  uranium overseas by those Australian companies at risk of

seizure in execution of the judgment. Mr Peacock said that  this requirement of the Government's safeguards policy had \  therefore created unnecessary difficulties unrelated to the  field of safeguards.

No.

MINISTER FOR

FOREIGN AFFAIRS

NEWS RELEASE

Date THE HON. ANDREW PEACOCK M.P.

2 Ã¢ÂÂ

Mr Peacock said that following negotiations on Â·   safeguards agreements with other Governments ; l  a practical  framework for implementing the Government's safeguards  policy as announced in 1977 had emerged. The Government is '

satisfied that effective means are available to ensure that  Australian yellowcake will not be diverted to non-peaceful  purposes. "What is important",  he said, "is that there is an  adequate framework of control - the question of where ownership

lies does not assist materially. This framework of control  will include:

. Australian Safeguards Office requirements '  governing physical protection during  transport, storage and processing;

. Australian Safeguards Office requirements  for notification of the movements of  nuclear materials;

. inter-governmental arrangements or  agreements with processor countries;

. bilateral nuclear safeguards agreements with the country of the ultimate consignee".

Mr Peacock saidr that a statement about the Government1s  decision will also be made in Parliament soon after it resumed  for the Budget sittings.

In conclusion, Mr Peacock said that the Government  was convinced that the framework of control that he had  referred to would prove to be effective. It would fully  maintain the integrity of Australia's stringent nuclear

safeguards policy.

