By Rob Taylor
CANBERRA (Reuters) - Australia looked set to expand uraniummining on Sunday with conservatives poised to win elections inresource powerhouse Western Australia state and demolish thecoast-to-coast grip of the centre-left.
State Labor Premier Alan Carpenter was bravely tipping ahung parliament with four of the 59 seats still in doubt afterSaturday's election, but analysts said the two conservativeopposition parties would likely form a coalition government incoming days.
"It has not been the sort of night and the sort of day thatwe had hoped," said Carpenter, who called the election fivemonths early to capitalise on disarray caused by a conservativeleader caught sniffing the chair of a female staffer.
A day before Carpenter called the poll, the pro-uraniumLiberal Party dumped its troubled leader Troy Buswell, who wasdogged by lurid reports of his chair-sniffing behaviour, andreplaced him with veteran Colin Barnett.
"I believe that the people of Western Australia haveexpressed their trust in myself and my colleagues. They havegiven us an opportunity and if that comes to pass we willaccept that opportunity," said Barnett.
Labor was tipped to win 27 of the 59 seats in the state'sLegislative Assembly, while the conservative Liberal Party wastipped to take 25. The conservative Nationals, representingmostly farmers, were likely to win four seats and others three.
Nationals leader Brendon Grylls was to meet Barnett onMonday, when ballot counting resumed, to negotiate on forming acoalition and press pre-poll demands that a quarter of statemining and petroleum royalties go to help rural voters.
Western Australia is at the centre of Australia's resourceboom with vast iron ore and offshore oil and gas projects, butthe state's centre-left Labor government opposes uraniummining, meaning eight major deposits remain unexploited.
REFORM
The state accounts for a third of the A$1 trillion (459billion pound) national economy on the back of theinternational resource boom, and a third of global iron oreexports, but has only a tenth of Australia's 21 millionpopulation.
If Labor falls in WA, it will be the first time the partyhas lost a state-level election in a decade.
Prime Minister Kevin Rudd has painted Labor's dominance atstate and national level as a chance to erase a century ofconstitutional and fiscal overlaps in health and education.
A Labor loss in WA places at risk Rudd's reform dream,which was central to his sweeping national election win lastyear.
Rudd said he would try to work with either side to ensurehis ambitious agenda did not stall.
"We have got a hung parliament in Western Australia and Ilook forward to working with either Mr Carpenter or Mr Barnett,whoever ends up being premier, to reform the federation. That'sthe important thing," Rudd told reporters.
Conservative politicians in the national parliament saidthe 6 percent swing in WA, when tied to a recent vote in theoutback Northern Territory, showed voters nationally werebecoming jaded with Rudd and Labor after only a year.
"The economy has deteriorated over the last 6-12 months andwhat you've seen is that people are worse off since theelection of Kevin Rudd," senior conservative lawmaker JoeHockey told Australian television.
But two national by-elections on Saturday in strongconservative seats also showed anti-conservative swings, withone MP scraping home and another losing decisively to anindependent.
With voters upset over a slowing economy and high officialinterest rates against a backdrop of international economicuncertainty, it was not a good time for governments of anycolour, media commentators said.
The WA conservatives went into the election supportinguranium mining and said they wanted to see a project up andrunning within five years, raising industry hopes that newmines could help meet booming worldwide demand for nuclearenergy.
Barnett also warned mining giants BHP Billiton and RioTinto they could face higher royalty payments if BHP's hostile$145 billion takeover bid for Rio succeeded, arguing it was notin the resource-based state's interests to have such a dominantmining force.
Australia has 40 percent of the world's known uraniumreserves, but only three operating mines, Ranger, owned by RioTinto Ltd unit Energy Resources Australia, Olympic Dam, ownedby BHP Billiton, and Beverly, owned by a local unit of GeneralAtomics of the United States.
Australia is the world's second largest uranium supplierbehind Canada, but has more than twice Canada's reserves.
Rudd's national government supports uranium mining, but itis up to each of the six states and two territories to approvenew mines. Only South Australia and the Northern Territorycurrently allow uranium mining.
($1 = A$1.22)
(Editing by David Fogarty)
