PRIME Minister Malcolm Turnbull believes an Australian nuclear industry is "worth looking at very closely".
Mr Turnbull made the comment on radio station 5AA in Adelaide after indicating he would support examining the potential of nuclear power as part of the nation's energy mix.
Both South Australia and Western Australia export uranium, but Queensland - the other state with major uranium resources - remains opposed under the Labor Party's long-standing policy.
Mr Turnbull said considering Australia mined uranium, it was perfectly reasonable to question why the country did not process it and turn it into fuel rods to be leased overseas.
He said once the nuclear fuel rods were spent, they could then be returned to Australia for storage in a "very stable geology in remote locations".
Mr Turnbull's comments followed a recent Minerals Council of Australia-commissioned report that showed the uranium industry could grow from $600million a year to $9billion a year if new reserves were opened up.
That report followed a federal Treaties Committee report that endorsed the sale of Australian uranium to India on several conditions, including that India created a truly independent nuclear regulator.
Mr Turnbull said he was sceptical about having dozens of nuclear power stations in Australia, but "playing that part in the nuclear fuel cycle I think it something that is worth looking at closely".
Greens senator Scott Ludlam said attempting to divert the conversation to nuclear was the desperate act of an industry scrambling to remain relevant.
He said Australian uranium was in the reactors that melted down in the Fukushima nuclear disaster.
"That's surely all the evidence anyone needs that nuclear is a technology that should be left in the 1950s," he said.