Australia has signed a controversial deal with Russia that will see it supply uranium to the region to fuel Russia's nuclear power plants, the Associated Press has reported. However, Australia has stipulated that Russia must not sell the uranium to third parties, in particular Iran, or use it for military purposes.

According to the Associated Press, Russian president Vladimir Putin, who signed the deal with Australia’s prime minister John Howard, has said that Russia is hoping to construct 30 new nuclear power plants over the coming 20 years in order to meet increasing electricity demand, a move that would only be possible with the acquisition of Australian uranium.

However, the international community and a number of environmental groups have reportedly expressed concerns that Russia’s close ties with Iran may lead it to sell the uranium to the region so that it can pursue its controversial nuclear program. In particular, there are fears that Iran may use the fuel to develop nuclear weapons.

There are particular concerns that if Russia acquires uranium supplies from outside sources such as Australia, it will be free to use its own reserves for other purposes, which may include selling it to third parties such as Iran.

According to the BBC, however, Mr Putin has staunchly disputed such claims. I simply don’t understand what people are talking about, Mr Putin said, as cited by the BBC. We are buying uranium from Australia for purely economic reasons.

Furthermore, Mr Howard has attempted to allay international fears regarding the uranium’s use, claiming: Any uranium that is sold to Russia will be sold under very strict safeguards, as cited by the BBC.

Australia controls 40% of the world’s uranium reserves. The region has no nuclear program of its own, but in 2006, signed a deal to supply China with $250 million worth of the fuel, the BBC revealed.