Fran O'Sullivan: I can smell the uranium on your shares

John Key. Photo / Janna Dixon

No-one could have smelt the uranium on John Key's shares if he had ensured they were tucked into his blind trust in the first place.

It's unfathomable that Key didn't just flick his parcel of Jackson Mineral shares into the Aldgate Trust on becoming prime minister.

If that had occurred he would not have found himself on the end of the ultimate television rail road when TVNZ's Guyon Espiner hit him with a "gotcha" on Sunday's Q&A programme by "revealing" the Australian company wasn't just mining gold, as Key just indicated to him, but now had substantial interests in mining uranium.

Instead of being forced onto the back foot Key could have responded:

"That may be so... but the administrator of my blind trust makes all the decisions now. I have no idea whether he flicked Jackson Minerals or held onto them ( Off the record: "I had thought the company was a bit of a dog - glad to hear they are doing - OK')."

Blind trusts are typically set up to help politicians avoid any conflict of interest. The politician grants control of business assets to an executor or administrator.

In theory this ensures the politician cannot acquire personal gains by virtue of his/her position.

In fact, blind trusts can have considerable commercial downside as former PM David Lange found to his cost in 1987.

In October 1987, I joined the press posse accompanying Lange to the Vancouver Commonwealth Heads of Government meeting.

Back then as political editor of the Auckland Sun, I - like now - also had a strong interest in business and economics reportage.

It was Lange's practice to slip a bit of rest and reccy into his offshore missions.

And I certainly had no qualms at being asked to spend 3-4 days lounging about the Hilton hotel on Hawaii's 'big island' on my way home (there were no direct Air NZ flights then).

Hilariously, the PM had been like a cat on a hot tin roof ever since we left Vancouver the previous Friday night.

That day the US sharemarket made its first major dip.

All the talk stateside was about whether the market was finally about to crash.

But the PM couldn't find the administrator of his blind trust to get him to immediately liquidate his portfolio. The late Sir Frank Renouf was off somewhere with this then wife Lady Susan - a renown socialite. The PM got increasingly agitated as it became clear as the narrow window for "Frank the bank" to liquidate his NZ portfolio ahead of the American markets opening on Monday October 19 disappeared in front of him. He took a hit.

In Key's case, Espiner's long curving ball began with the allegation that the PM had a conflict of interest when it came to mining NZ's conservation estate.

Key batted that one away easily enough by pointing out the company didn't operate in NZ - "it's in my pecuniary interests - I can go and look at it but if I sold it, it would be for a very tiny amount of money."

The PM was referring to the disclosure that he - and the other 119 MPs - make each year which sets out their direct pecuniary interests.

Espiner then said the mining firm - Jackson Company - had "significant interests in mining uranium in Australia and Argentina" through a company called Cauldron.

He asked Key: "I mean is that something that you - as the leader of a nuclear free country would be concerned about, or is this not something you've looked into?"

Key said if Jackson Company had done a merger it was the first he'd heard of it.

When Espiner asked whether Key felt the need to divest himself of mining interests, the Prime Minister said he could "do it if people want" but reiterated that the shares had always been listed in his pecuniary interests.

Click here for the full interview

By the time the 6pm news rolled around the lead story blared: "The PM has been forced to sell shares in an Australian mining company after TVNZ's Q&A programme pointed out its links to uranium mining.

Two problems:

First, NZ doesn't have any substantial uranium reserves and exploration and mining of uranium minerals is not permitted. Hard to see any issue there.

But it's not as if we haven't gone hunting for uranium before.

In 1944 a bunch of scientists set out with their geiger counters to secretly explore the South Island. After the US dropped the Hiroshima and Nagasaki bombs, NZ passed an Atomic Energy Act to give the state full ownership and control of uranium.

In 1959, the UK Atomic Energy Authority and Buller Uranium signed a confidential agreement to investigate Buller Gorge deposits - but the concentrations of uranium oxide were too low to support underground mining operations.

Pity.

In Australia, major mining companies - such as BHP Billiton, Energy Resources Australia - are deeply involved in uranium exploration.

Australia now earns more than A$1 billion annually from exporting uranium ore concentrate. By 2014, that figure is expected to be A$1.7 billion.

There are tight controls: Australian uranium is produced only for export and is used only for peaceful purposes in civil nuclear power stations outside of Australia and is trumpeted as a contributor to global climate relief.'

The reason Australia doesn't have a suite of nuclear power stations is it burns cheap coal for power.

But NZ is stuck in a 1980s cul de sac: Nuclear equals bad.

Secondly, is the PM now expected to order the administrator of his blind trust not to invest in any company that could be mining uranium simply because New Zealand has anti-nuclear laws?

If so, that rules out many companies with diverse interests. Bizarre really.