|Australia possesses nearly 40 per cent of the world's known uranium reserves [Reuters]
Australia's ruling Labor Party has approved plans to open up uranium sales to India, clearing the way for talks on a bilateral nuclear agreement and resolving an issue that has caused diplomatic tensions between the two nations.
Sunday's vote at the party's annual policy conference in Sydney overturned its own ban on selling uranium to countries such as India, that are not signatories to the nuclear Non-Proliferation Treaty (NPT).
Australia already sells uranium to China, the US, Japan and Taiwan.
Prime Minister Julia Gillard announced her intention to open sales in November and successfully pushed the new policy through the conference, despite an often heated debate and chants from protesters who remain opposed to nuclear energy and weapons.
The policy change does not need to be approved by parliament, and the conservative opposition supports the sales.
"We should take a decision that is in our nation's interest, a decision about strengthening our strategic partnership with India in this the Asian century," Gillard said before the vote.
"The [nuclear non-proliferation] treaty does not require that signatories sell nuclear fuel only to other signatory countries."
Australia, which has no nuclear power stations of its own, possesses nearly 40 per cent of the world's known uranium reserves, but supplies only 19 per cent of the world market.
India, Asia's third-largest economy, has long complained about the Australian ban and wants more access to uranium to meet an ambitious target for nuclear energy, with plans to build 30 nuclear power stations in the next 20 years.
The move to allow sales to India comes three years after the US also agreed to support Mumbai's civil nuclear programme, overlooking the country's shunning of the NPT.
"Let's just face facts here, our refusal to sell uranium to India is not going to cause India to decide that it will no longer have nuclear weapons," Gillard said.
Australia's uranium industry welcomed the policy shift, which it said could lead to more Indian investment in the country's mining projects.
"Chinese, Japanese and Russian companies are seeking out these opportunities and we would expect Indian companies will do the same," Australian Uranium Association chief executive Michael Angwin said.
He said India would potentially buy up to 2,500 tonnes of Australian uranium a year by 2030, although the first sales could still be some years away, as it could take several years to negotiate a nuclear safeguards agreement.
Before selling uranium, Australia negotiates nuclear safeguards agreements with customer nations to ensure nuclear
material can only be used for energy and not for nuclear weapons.
Australia now has four mines: BHP Billiton's Olympic Dam, potentially the world's biggest; Energy Resources Australia's Ranger mine; the Beverly mine, owned by US company General Atomics; and Honeymoon mines, owned by Uranium One and Mitsui & Co.
Canberra has forecast uranium exports to rise from around 10,000 tonnes a year to 14,000 tonnes in 2014, worth around A$1.7bn ($1.74bn).
Sunday's party vote was a victory for Gillard, but exposed deep divisions within the government over nuclear energy, with Transport Minister Anthony Albanese leading opposition to any sales to India or expansion of exports.
Albanese said since Japan's Fukushima nuclear disaster in March, most nations, including Germany, Switzerland and Italy, were winding back their commitment to nuclear energy.
"Under these circumstances, it is absurd that we should be expanding ours," Albanese told the conference.
Former anti-nuclear campaigner and rock singer Peter Garrett, whose band Midnight Oil railed against nuclear energy,
said Labor needed to honour its support for the NPT.
"Labor has a great disarmament tradition," Garrett, who is now Australia's schools education minister, told the conference. "Where is our vision here? Where is our commitment to a nuclear free future?"