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Nuclear News - 12/01/99
RANSAC Nuclear News, 01 December 1999


A.  HEU

    1. Plant Operator Mulling Russian Deal, Associated Press(12/01/99)
    2. USEC To Continue As U.S. Government Agent For TheMegatons-To-MegawattsProgram, USEC Press Release (12/01/99)
B.  Plutonium Disposition
    1. Plutonium Hot Potato To Canada, Christian Science Monitor(11/24/99)
    2. Uranium Institute News Briefing  [Plutonium Disposition],The Uranium Institute Online (12/01/99)
C.  DOE
    1. Russian, Norwegian Naval Officers Visit DOE to Discuss RadiologicalWorker Safety during Russian Nuclear-Powered Submarine Dismantlement,DOE (11/24/99)
D.  Nuclear Power Industry
    1. Uranium Institute News Briefing  [Russian Nuclear Power],The Uranium Institute Online (12/01/99)
E.  Y2K
    1. Russia's Pacific Fleet Sees No Y2K Computer Chaos, Reuters(11/30/99)
F.  START
    1. U.S. Spread Too Thin, Bradley Says, Candidate Calls for LessForeign Intervention, Washington Post (11/30/99)
G.  Arms Control – General
    1. Russia Gives Rare Chemical Arms Facts, Wants Help, Reuters(11/30/99)

A. HEU

1.
Plant Operator Mulling Russian Deal
        Katherine Rizzo
        Associated Press
        December 1, 1999
        (for personal use only)

WASHINGTON--A deal to help keep nuclear peace hasn't been profitablefor the operator of the nation's uranium enrichment plants, which has beenwarning that it might decide today to end the arrangement.
 
The board of the U.S. Enrichment Corp. was expected to vote in a morningteleconference whether to stop handling recaptured uranium from Russia'sdismantled nuclear warheads.
 
Its decision has implications for both global security and the economyof southern Ohio, where the company runs the Portsmouth Gaseous DiffusionPlant in Piketon.
 
USEC spent the last several weeks making a case to the government foras much as $200 million worth financial aid to make up for a drop in worldwideprices for low-enriched uranium, the grade used as fuel by nuclear powerplants -help the Clinton administration did not rush to offer.
 
Today is a contractual deadline for USEC to notify the government ifit wants to stop handling the Russian uranium at the end of next year.Delaying a decision would obligate the company to remain part of the dealthrough 2001.
 
USEC is under contract to pay Russia to convert highly enriched uraniumfrom Soviet nuclear warheads into low-enriched uranium. USEC is the federalgovernment's agent for the transaction, which was set up to keep Soviet-erawarhead uranium away from rogue nations and terrorists.
 
More than a year ago, when USEC was being transformed from a governmententity into a private corporation, Russia's minister of atomic energy saidhe was worried about whether USEC would want to continue handling the Sovieturanium after the company's privatization.
 
Minister E.O. Adamov warned that opposition to nuclear nonproliferationagreements would increase in Russia's legislature if problems emerged withthe USEC arrangements.
 
USEC has maintained that it wants to continue doing business with Russia,but does not want its shareholders to subsidize national security.
 
USEC's plants in Piketon and in Paducah, Ky., also are dealing withthe issue of whether current and former employees unknowingly handledplutonium-laceduranium during the Cold War  and developed cancers and other illnessesas a result.
 
The Energy Department on Tuesday sent to Piketon the first wave ofwhat will eventually become a 20 -person investigative team to examinepast operating practices and contamination.
 
The investigation that could lead to compensating workers for healthproblems.

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2.
USEC To Continue As U.S. Government Agent For The Megatons-To-MegawattsProgram
        USEC Press Release
        December 1, 1999
        (for personal use only)

For Immediate Release:  December 1, 1999
Contact:   Charles Yulish (301) 564-3391, Elizabeth Stuckle(301) 564-3399

Bethesda, MD – USEC Inc. (NYSE:USU) announced today the decision bythe Board of Directors that the Company will continue to serve under existingterms as the U.S government’s Executive Agent for the purchase of Russianenriched uranium fuel derived from Russian nuclear warheads.

In making the announcement, William H. Timbers, President and ChiefExecutive Officer, stated, "The Board has extensively considered many factors,including near-term enrichment pricing, opportunities for improving thebalance of supply in the market, and the potential for positive changein these factors. The Board of Directors and management have determinedthat it is in the long-term interests of the Company to remain as the ExecutiveAgent.

"While there are quantifiable costs to USEC and its shareholders associatedwith the Executive Agent activities, the company would incur greater economiccosts in the long run from not being the manager of this program. As theExecutive Agent, USEC is the best equipped, best financed and most experiencedentity to purchase this material and integrate it into the market in amanner that minimizes market disruption and ensures the reliability andcontinuity of economic supply to electric utility customers.

"This decision also takes into account recent statements by Russia thatthey are prepared to engage in market-based pricing contract negotiationsfor the post-2001 period," Timbers added. "For the next two years, USECmust pay $88 to $91 per unit for Russian material, while the market pricefor sales is only in the low $80 range."

The Company has been in discussions with the U.S. government since March,seeking financial support that would restore the commercial economics ofthe contract for the remainder of the current contract period, which expiresat the end of 2001. Those discussions have not yet led to a mutually acceptablesolution.

Taking these developments into consideration, management now believesthat the Company’s fiscal year 2000 earnings will be in the $110-$115 millionrange, compared to the $120 million earned last year. This difference isdue to increased costs associated with the Russian contract, partly offsetby increased sales and cost reductions. The absence of government financialsupport for the Russian contract will continue to have a negative impacton earnings until market-based pricing is established under the contract.

"USEC management is committed to enhancing shareholder value," Timbersstated. "To meet the expectations of our shareholders, the relationshipbetween our cost structure, including the purchase price of enriched uraniumfrom Russia, and the market price of our products must come into betteralignment. We will decisively pursue this objective," Timbers asserted.

This news release includes certain forward-looking information (withinthe meaning of the Private Securities Litigation Reform Act of 1995) thatinvolves risks and uncertainty, including certain assumptions regardingthe future performance of the Company. Actual results and trends may differmaterially depending upon a variety of factors, including, without limitation,market demand for the Company’s services, pricing trends in the uraniumand the enrichment markets, deliveries and costs under the Russian contract,the availability and cost of electric power, the Company’s ability tosuccessfullyexecute its internal performance plans, the refueling cycles of the Company’scustomers, and the impact of any government regulation. Additional informationregarding the foregoing factors is contained in the Company’s filings withthe Securities and Exchange Commission.

USEC Inc. is the world leader in the sale of uranium fuel enrichmentservices for commercial nuclear power plants. A global energy company,USEC has its headquarters in Bethesda, Maryland, and operates productionplants in Kentucky and Ohio.

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B. Plutonium Disposition

1.
Plutonium Hot Potato To Canada
        Ruth Walker
        Christian Science Monitor
        November 30, 1999
        (for personal use only)

US may ship fuel rods beginning Dec. 2. Activists oppose Ottawa's hopeto burn weapons-grade fuel.

To its defenders, the Parallex project - an experiment to dispose ofplutonium from Russian and American warheads - is a "swords into plowshares"initiative in the noblest peacemaking traditions of Canadian foreign policy.

As early as Thursday, the first small sample of weapons-grade plutoniumis allowed to leave Michigan for the Chalk River research reactor in Ontariofor a three-year "test burn."

This test could open the door for Canadian commercial nuclear powerplants to be running, within about 10 years, off excess military plutonium.

But to critics, the attempt risks bringing Canada into the dangerousplutonium trade and turning the country into a dumping ground for the world'snuclear waste. And the prospect of even the test shipments has caused alarm.

"What I find most perplexing is that our government is promoting thisas a nonproliferation measure," says Kristin Ostling, national directorfor the Campaign for Nuclear Phaseout in Ottawa. She calls the project"about the worst thing Canada can do to promote nonproliferation."

Environmentalists, citizens' groups, the police and firefighters'associations,and others have protested the shipment. The Mohawk Indians have threatenedto block the route.

Disposal problem

At the heart of the controversy is disagreement over how best to dealwith excess weapons-grade plutonium. The US can easily dispose of its owninventory in commercial reactors, but will ship its sample to Chalk Riverto help keep the Canadian option open for Russia. Russia, meanwhile, withits limited reactor capacity, could take 25 years to dispose of its excesson its own.

No date has been made public for the shipment of the US sample, butit could occur as early as Dec. 2. The Russian shipment is seen as likelyto occur in the spring.

The Canadian scenario involves mixing the plutonium with natural uraniuminto so-called mixed-oxide fuel pellets, or MOX. These pellets are a sortof higher-octane nuclear fuel than natural uranium, which Candu reactors,designed and marketed by the Crown corporation Atomic Energy of CanadaLtd. (AECL), of Mississauga, Ont., normally run on. Hence the need forthe Chalk River test.

But opponents of the MOX project argue that a better solution isvitrification,encasing the plutonium in a sort of glass log, or keeping it buried undermilitary guard.

Critics of that option counter that vitrified plutonium can be madeback into nuclear weapons, unlike plutonium put into MOX pellets. "Vitrificationdoes not destroy plutonium," AECL spokesman Larry Shewchuk says.

He adds, "There is no risk to the public in the transport of this material,"which will travel in 45-gallon drums, by truck and by freight container.It will be so solidly packaged that "no accident scenario" is credible.

"The worst thing you can do with plutonium is make it part of internationalcommerce," says Gordon Edwards of the Canadian Coalition for NuclearResponsibility.Any time nuclear materials travel from one point to another, particularlyinternationally, there is opportunity for what is delicately known as"diversion."

Why is Ottawa persisting with a project so unpopular with at least avery vocal part of the public?

Prime Minister Jean Chrétien is widely seen as a prime cheerleaderfor the Canadian nuclear industry. Even on tour in earthquake-ravaged Turkeyrecently, he continued to talk up the AECL's bid to build a reactor there,insisting it would be "perfectly safe."

Moreover, critics say AECL sees the Parallex project as an opportunityto demonstrate the capacity of CANDU reactors to run on other fuels, amarketing plus.

Who would profit

Mr. Shewchuk, of the AECL, dismisses this argument. "What makes themattractive is that they run on natural uranium, which is a cheap sourceof fuel - in line with coal." Nor is there much money in all this for AECL,he adds. "It would be the utilities" that would benefit from any large-scaleMOX imports.

The US is expected to chip in a few billion dollars up front to helpwith the cost of handling Russian plutonium. "But in the long haul, theRussians and the G-7 [the group of seven major industrialized nations]will have to work it out," says Franklyn Griffiths, a political scientistat the University of Toronto. "The US won't pay for everything." But theRussians are insisting on a full market price for this "national treasure."

"If you really want to contain nuclear proliferation, you should dosomething to strengthen Russia's materials-controlling capacity," ProfessorGriffiths says. This means such basics as "better perimeter fences" atnuclear sites, "locks on doors, things like that."

Meanwhile, Canada's own security standards have been called into question.Tom Clements of the Nuclear Control Institute in Washington has releaseda statement criticizing lax security procedures he observed while touringthe Chalk River site. "It would be easy ... to carry a weapon or explosivedevice onto the ... site."

"I don't know anyone in their right mind who would be against destroyingnuclear weapons," says Shewchuk. He says that after holding open housesalong the transport routes to inform the public about the Parallex project,"9 out of 10 of the people who walked up to us afterward said, 'I thinkthis is important research.... Keep going.... We support you.' "

He adds that the scientist preparing the Russian test sample in Moscowis one who earlier in his career helped develop the nuclear arsenal ofwhat was then the USSR. "His entire research life has come full circle."

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2.
Uranium Institute News Briefing  [Plutonium Disposition]
        The Uranium Institute Online
        December 1, 1999
        (for personal use only)

[NB99.48-14] It will cost the US just over US$4 billion to deal withits surplus plutonium, according to a life-cycle cost estimate of the DOE'splutonium disposition programme, inclusive of US$265 million already spenton the programme. The US$4.07 billion total cost covers the siting, constructionand operation of three plutonium disposition facilities, costs associatedwith burning MOX in commercial reactors, disposing of plutonium in a geologicrepository, developing and demonstrating the technologies, transportingthe plutonium and disposition products, start-up, deactivation anddecommissioning.A credit of US$565 million has been allowed for the value of the MOX fuel.(SpentFUEL, 29 November, p1)

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C. DOE

1.
Russian, Norwegian Naval Officers Visit DOE to Discuss RadiologicalWorker Safety during Russian Nuclear-Powered Submarine Dismantlement
        Department of Energy
        November 24, 1999
        (for personal use only)

A delegation of Russian and Norwegian naval officers visited the Departmentof Energy on November 15 to discuss radiation worker protection and safetyissues associated with Russian Navy nuclear-powered submarine dismantlementand radioactive waste management. The visit was part of the Departmentof Defense/Department of Energy Arctic Military Environmental Cooperationinitiative. Through this national security initiative, the U.S. helps dismantleRussian strategic nuclear weapons formerly aimed at the United States.The initiative also minimizes opportunities for the proliferation of nuclearweapons and weapons-usable nuclear material. Russian nuclear powered submarinedismantlement efforts generate large amounts of radioactive waste causingthe potential for high exposure to workers and the possible spread ofradioactivecontamination to the environment if not properly monitored. The EnergyDepartment is providing radiation monitoring equipment and training forRussian nuclear submarine dismantlement, storage for spent nuclear fueland radioactive waste resulting from the dismantlement, and technologiesfor subsequent waste handling. The Energy Department and Russia will usea Norwegian system to monitor spent fuel from the Russian nuclear submarinesthat have not been defueled and are awaiting dismantlement. Media Contact:Chris Kielich, 202/586-5806

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D. Nuclear Power Industry

1.
Uranium Institute News Briefing  [Russian Nuclear Power]
        The Uranium Institute Online
        December 1, 1999
        (for personal use only)

[NB99.48-9] Russia: Rostov-1 is likely to be commissioned during 2000,but there are no funds available to complete Kalinin-3 or Kursk-5, accordingto Leonid Melamed, the executive director of Rosenergoatom. Constructionon Rostov-1 has been suspended for the last 8 years but Rosenergoatom expectsto get a licence to continue construction before the end of 1999. 2.5-3billion roubles is still needed to complete the reactor - not includingthe cost of the fuel. (Ux Weekly, 29 November, p4; see also News Briefing99.05-4)

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E. Y2K

1.
Russia's Pacific Fleet Sees No Y2K Computer Chaos
        Reuters
        November 30, 1999
        (for personal use only)

VLADIVOSTOK, Russia (Reuters) - Russia's Pacific Fleet, which includesatomic submarines, said Tuesday it had taken  measures to preventthe Y2K computer bug from accidentally launching its nuclear weapons.

Officials have played down any worries over Russia's nuclear arsenal,the world's second largest, saying it is protected from the Y2K bug, whichexperts worry could scramble systems that cannot read the two final zeroswhen the date changes to 2000.

``Security systems, systems which control armaments, including nuclearweapons, use sophisticated technology which will not be affected by computermalfunctions,'' Yuri Bogun, a spokesman for the Pacific Fleet, told Reuters.

``The year 2000 problem will not affect the fleet. ... We have takensome measures, which although not typical, are very good,'' he said fromthe fleet's headquarters in Russia's far east.

Bogun said all the fleet's departments would work overnight on New Year'sEve to ensure the Y2K bug does not scramble its computer systems when theclock strikes midnight on December 31.

Russian officials have said the vast nation would not suffer computerchaos in the New Year, shrugging off some foreign forecasts that it couldsuffer power and energy cuts.

Russian and U.S. military personnel have also agreed to spend New Year'sEve sitting side by side in a missile command center in Colorado to preventeither side thinking the other has launched any of the missiles in theirmassive nuclear arsenals.

Moscow has been criticized for its slow response in waking up to therisks of the millennium bug and a recent State Department report said Russiansacross 11 time zones could face a dark, cold new year.

Deputy Prime Minister Ilya Klebanov, charged with handling the problem,said earlier this month that Russians would notice nothing more than theresults of the odd ``non-critical'' system malfunctioning.

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F. START

1.
U.S. Spread Too Thin, Bradley Says, Candidate Calls for Less ForeignIntervention
        Mike Allen
        Washington Post
        November 30, 1999
        (for personal use only)

MEDFORD, Mass., Nov. 29—Bill Bradley called today for the United Statesto reduce its unilateral overseas interventions and instead work with theUnited Nations and other international organizations to build securityin a world that lacks the Cold War's predictability.

"We cannot give an open-ended humanitarian commitment to the world,"Bradley said, charting his foreign policy in a discussion with Tufts Universitystudents. "The United States has been spread very thin over a wide territoryin the world and has not had the impact that we seek to have in placesthat we do get involved."

Bradley contended that America has neither the resources nor the wisdomto soothe every hot spot. "The key is to get multilateral efforts to interveneearlier, before things reach the point where only there is a military option,"he said. "That requires partners in the world to do this, alliances withinternational organizations."

In a rebuke to Vice President Gore, his rival for the Democratic presidentialnomination, Bradley also said that the United States had "missed a realopportunity" in responding to overtures from Russian leaders in the yearssince the fall of communism. He said the Clinton administration focusedtoo much on encouraging Russia to adopt domestic economic reforms, insteadof pushing for deep reductions in nuclear arms and other weapons.

Though carefully measured, Bradley's comments placed him firmly to theleft of Gore and other presidential candidates on foreign policy issues.While Republican frontrunner George W. Bush and other GOP candidates havealso criticized the Clinton administration's foreign interventions, Bradleydiffers from them in calling for greater reliance on the United Nationsand other international organizations.

Bradley's call for more extensive and far-reaching negotiations withRussia on arms control and other issues is also distinctive. He said todayhe would work to negotiate a new missile-reduction treaty with Moscow,even though the START II treaty reducing nuclear warheads has never beenratified by the Russian parliament. "I am in favor of moving beyond STARTII, even in the absence of ratification by Russia, to negotiations on STARTIII," he said, giving a goal of reducing arms stocks to 1,000 to 2,000warheads for each side.

Bradley opposes the immediate deployment of a national missile defense,a step that would require renegotiating or breaking the antiballistic missiletreaty with Russia. He favors ongoing research but is concerned about thediplomatic consequences of deployment. Gore has said he wants to negotiatewith Russia about the deployment of the system while Bush has said he wouldbuild it even over Russian objections.

Bradley endorsed an open world trading system, but said the World TradeOrganization should give labor organizations and environmentalists a rolein shaping the rules of international commerce, allow such groups to file"friend-of-the-court" briefs in trade disputes and let such organizationsparticipate in subcommittees within the WTO.

But the former senator's most striking comments concerned U.S. interventionsabroad, an area where the Clinton administration has built a long andcontroversialrecord with missions in Haiti, Bosnia, Kosovo and elsewhere. Robert Kagan,a specialist in foreign policy at the Carnegie Endowment for InternationalPeace, said Bradley "wants to wrap overseas intervention around Al Gore'sneck in the same way that Republicans in Congress have wanted to wrap itaround President Clinton's neck."

Speaking at the Fletcher School of Law and Diplomacy, which was foundedin the midst of the Great Depression in an effort to boost internationalismat a time of isolationism, Bradley described "a disturbing paradox, wherewe're more powerful than ever before, but we're also more vulnerable toa variety of threats."

"The great risk of nuclear holocaust with the Soviet Union has receded,"he said. "But there are a multitude of smaller threats--from troublemakingdictatorships like Iraq, to poorly safeguarded nuclear warheads in Russia,to the increasingly dangerous situation on the Korean peninsula to transnationalterrorists."

Bradley declared that "in this new world, the next president has aneven heavier burden, which is to try to create a comprehensive frameworkfor peace and security and prosperity." He said the United States mustwork through international institutions to "help mold this internationalsystem."

He said that too many United States policies, and even its militarystrategy, are remnants from those days when enemies were clear and friendswere obvious. "The choices are no longer so stark," he said.

Bradley said he would work to restore one mindset of the Cold War, when"men and women of goodwill in both parties joined together to do what wasin America's best interest."

"There was an old saying that political division stopped at the water'sedge," he said. "Sadly, that consensus has vanished. Foreign policy hasbecome more of a political football, or is made to score domestic politicalpoints. I deplore that. One of the things that I will try to restore ifI become president of the United States is a bipartisan foreign policyconsensus."

Drawing an implicit contrast with Bush, Bradley said he was comfortablewith international affairs and had needed no crash course. "I've been thinkingand speaking and writing about foreign policy for more than 20 years,"he said.

In a swipe at the administration, Bradley said, "To lead, a presidentmust have the support of the American people and to get that support, hemust always be straight with them."

Bradley had planned to give a formal foreign policy address today, butpostponed that to an undetermined time for reasons his staff would notdisclose. Instead he simply outlined the framework of his policy in whathe called "a whirlwind tour of the horizon." Then he answered questionsfrom the students, joking that he would move to the next questioner ifhe didn't know the answer or thought the inquiry was stupid. At one point,he said that when he was 9 or 10 years old, he had designed his own bombshelter, marking spaces for a cot, his favorite books and his basketball.

Walter Mead, senior fellow at the Council on Foreign Relations, saidBradley's approach distinguished him at a time when the other candidateswere promoting "an aggressive style of national leadership."

"Bradley is saying that United States influence in the world is greatest,and costs the least, when the United States cooperates with other leadingpowers," he said.

However, Ted Galen Carpenter, the Cato Institute's vice president fordefense and foreign policy studies, said he saw "a fundamental contradiction"in the idea of a more robust United Nations and a more passive United States,given the country's dominance in that organization.

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G. Arms Control – General

1.
Russia Gives Rare Chemical Arms Facts, Wants Help
        Reuters
        November 30, 1999
        (for personal use only)

MOSCOW, Nov 30, 1999 -- (Reuters) Russian experts have made an unprecedentedpitch for $100 million in foreign funding to help convert chemical weaponsplants to civilian use and published many details about the deadly industryfor the first time.

The experts gave their assessment in the latest edition of the journalSynthesis, published quarterly by the Organization for the Prohibitionof Chemical Weapons, based in The Hague. A copy of the article was madeavailable to Reuters on Monday.

Russia is in the depths of an economic crisis and has little cash tohelp get rid of stored chemical weapons - the world's largest stockpileby far - under a global convention. It can afford still less to convertplants at 24 sites across Russia to other purposes.

"The demilitarization of the facilities in accordance with the conventionwill cost Russia about $110 million," the experts wrote. "The Russian governmentcan provide only 10 percent of the necessary budget, so financial assistancefrom other countries is crucial."

The experts also said Russia stood to lose many millions of dollarsif the plants were scrapped.

Regional governors had already urged Moscow last month to find moremoney to destroy chemical stores, describing the situation as catastrophic.

The article by Svetlana Utkina, Alexander Gorbovsky and Alexander Zhuchkov- all senior government officials - was published in the week the OPCWholds an executive council meeting in The Hague where delegates will considera Russian request to convert three World War Two vintage factories.

The report describes where these three plants are and what they produced- mustard gas and an arsenic-based additive called lewisite to stop mustardgas freezing in winter. It also gives for the first time details on theother 21 sites.

FIRST TIME RUSSIA OUTLINES FULL CHEMICAL PROPOSAL

The authors say of the total of 24, six plants are to be destroyed.Eight others are so old they have long since stopped producing chemicalweapons and do not need to be razed, but need permission to carry on producingcommercial chemicals.

The remaining 10, which produced non-toxic ingredients and more modernchemical agents such as VX and sarin nerve gas, will be converted to civilianuse once funds are available and the OPCW agrees. A rolling list of requestswill be submitted.

"As far as we know this is the first time they have come out and saidexactly where their production facilities are and what they made there,"a Western diplomat told Reuters.

"When they came up with their first conversion requests they were justone-offs," he said. "Now they have a whole proposal."

The article outlines a five-point plan and says: "The choice of approachhas been determined by the extremely difficult economic situation in Russia."

It said it would cost Moscow more than $300 million in lost profitsto scrap former arms plants which produced commercial chemicals beforeRussia ratified the Chemical Weapons Convention two years ago. Destroyingthe plants would also hurt Russian chemical companies and lead to morelosses of $1 billion.

"For example, the former aminomercaptane production facility inNovocheboksarsknow produces acetonanile, which is used as a rubber stabilizer," it said."This facility is the main domestic producer and its closure would paralyzethe rubber industry."

Russia is the world's fourth largest producer of synthetic rubber afterthe United States, Japan and Germany.

The experts said the conversion program would provide jobs for morethan 5,000 "highly qualified specialists" and open up opportunities forforeign investment in an important sector.

"Besides the significant economic advantages, the joint ownership ofproduction will ensure the irreversibility of the conversion," the Russianofficials said.

The Western diplomat said the aim seemed to be to start with older plantsand then move on to the main nerve gas factories.

"This has a short term and long term aim," the diplomat said. "If itachieves a bit of either they will be quite happy."

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