Australia and China are negotiating changes to a uranium supply agreement to accommodate expansion plans proposed by BHP Billiton Ltd. (BHP) for its Olympic Dam mine, according to a document mistakenly made public in parliament late Wednesday by Foreign Minister Stephen Smith.

BHP Billiton proposes to export a concentrate to China for the extraction of uranium and copper there, in lieu of building the full uranium and copper production capacity at Olympic Dam, according to the document.

The current nuclear transfer agreement between the two nations is focused primarily on uranium supply through uranium ore concentrates. It allows for uranium extraction from other ores and concentrates, but only for non-nuclear purposes.

Hence, an amendment or supplementary agreement is required to ensure Australian uranium is satisfactorily accounted for during the extraction process from copper concentrate, and that any uranium extracted becomes nuclear material subject to the provisions of the nuclear transfer agreement.

An initial round of negotiations to change the agreement was held in Beijing Jan. 15.

Australia and China first signed a treaty on the transfer of nuclear material on April 3, 2006. The first Australian uranium was exported to China late in 2008, under a policy that only allows its use for civil nuclear energy purposes. China wants to import more uranium from Australia as it expands its nuclear generation capacity.

Trade Minister Simon Crean said it was embarrassing the document containing information that negotiations are under way has become public, but he doesn't expect he will receive any feedback on the breach of confidentiality.

"But if there are concerns we'll deal with them," he told reporters Thursday.

All that was issued Wednesday was a schedule of bilateral and multilateral treaty negotiations, he added.

On May 1, BHP Billiton issued a draft environmental impact statement to seek government approvals for a huge 5-stage expansion of the Olympic Dam mine over 11 years to eventually yield 750,000 metric tons of copper, 19,000 tons of uranium oxide and 800,000 troy ounces of gold, compared with the current output of 170,000 tons of copper, 4,144 tons of uranium oxide and 80,517 ounces of gold.

-By Ray Brindal, Dow Jones Newswires; 612-6208-0902; ray.brindal@dowjones.com