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Nuclear News - 7/26/2006
RANSAC Nuclear News, July 26, 2006
Compiled By: Cameron McNamee

A.  Nuclear Terrorism
    1. India signs international convention against nuclear terrorism, Xinhua News Agency (7/25/2006)
    2. An American Hiroshima?, James Goodby, Patriot News, Harrisburg, PA  (7/23/2006)
B.  Japan
    1. Downhill path from fear to proliferation, Robyn Lim, Japan Times (7/23/2006)
C.  Russia - US
    1. Russia, U.S. set to start talks on uranium exports - ministry, RIA Novosti (7/25/2006)
    2. U.S. - Russia program for plutonium fizzles, H. Josef Hebert, Associated Press (7/23/2006)
D.  Nuclear Security
    1. Senior official reprimanded in DOE computer theft case, H. Josef Hebert, Associated Press (7/20/2006)
E.  Pakistan
    1. Pakistan launches huge nuclear arms drive: Satellite images reveal major building site US and China embroiled in buildup of rival arsenals, Randeep Ramesh & Julian Borger , The Guardian (7/25/2006)
F.  Iran
    1. Mideast fighting threatens to complicate diplomacy over Iran's nuclear program, Brian Murphy, Associated Press (7/25/2006)
    2. Iran prepared for nuclear talks without preconditions - official , RIA Novosti (7/23/2006)
    3. Iran to produce some nuclear fuel on its territory - council, RIA Novosti (7/20/2006)
G.  Russia
    1. Nuclear GAZPROM, Sergei Dmitriyev , Moscow News (7/21/2006)
    2. Russian Navy to deploy nuclear missile carriers in 2007, ITAR-TASS (7/20/2006)
    1. China, SKorea push for nuclear talks as NKorea slams 'imbecile' Rice, Jun Kwanwoo, Agence France-Presse (7/25/2006)
    2. Kim's card: why China is reluctant to step up the pressure on Pyongyang , Anna Fifield and Richard McGregor, Financial Times (7/25/2006)
    3. Six-party talks on N.Korea at ASEAN forum unlikely - Russia source, RIA Novosti (7/21/2006)
I.  Libya
    1. Kadhafi says Libya was close to building nuclear bomb, Afaf Geblawi, Agence France-Presse (7/25/2006)
J.  India - US
    1. As Congress' vote on U.S. - India nuclear deal looms, critics step up opposition, Foster Klug, Associated Press (7/25/2006)
    2. The sound of one hand clapping; India's nuclear ambitions, Economist (7/22/2006)
K.  Nuclear Non Proliferation Treaty
    1. Rogue states play nuclear catch-up to test treaty's teeth, The Canberra Times (7/24/2006)
L.  Official Statements
    1. Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps, Amir Abbas Fakhravar, U.S. Senate Committee on Homeland Security and Governmental Affairs Website (7/20/2006)
    2. Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps,  Ilan Berman, U.S. Senate Committee on Homeland Security and Governmental Affairs Website (7/20/2006)
    3. Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps, Michael Ledeen, U.S. Senate Committee on Homeland Security and Governmental Affairs Website (7/20/2006)
    4. Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps, Ray Takehy, U.S. Senate Committee on Homeland Security and Governmental Affairs Website (7/20/2006)
    5. Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps, Jim Walsh, U.S. Senate Committee on Homeland Security and Governmental Affairs Website (7/20/2006)
    6. Testimony to the U.S. House Subcommittee on Oversight and Investigations - U.S. Nonproliferation Strategy, Mark Haynes, CQ Congressional Testimony (7/20/2006)
    7. Testimony to the U.S. House Subcommittee on Oversight and Investigations - U.S. Nonproliferation Strategy, John F. Kotek, CQ Congressional Testimony (7/20/2006)
    8. Testimony to the U.S. House Subcommittee on Oversight and Investigations - U.S. Nonproliferation Strategy, Chairman Dana Rohrabacher, CQ Congressional Testimony (7/20/2006)
M.  Iran - DPRK
    1. Iranians present at N.K. missile launches: U.S. , The Korea Herald (7/22/2006)

A.  Nuclear Terrorism

India signs international convention against nuclear terrorism
Xinhua News Agency
(for personal use only)

India has signed International Convention for the Suppression of Acts of Nuclear Terrorism, the Ministry of External Affairs announced Tuesday.

India signed the convention on July 24 at the UN Headquarters in New York, the ministry press release said Tuesday.

"India is already a Party to the other 12 international terrorism conventions and protocols and attaches high priority to the formulation of international legal instruments to combat terrorism," the statement said.

India shares the objective of the International Convention for the Suppression of Acts of Nuclear Terrorism, which demonstrates the resolve of the international community to deny terrorists access to nuclear materials and enhances international cooperation in devising and adopting practical measures to prevent nuclear terrorism, the ministry said.

Indian economic hub Mumbai had been hit by serial bomb blasts on July 11, killing about 200 people and injuring about 800.

The convention was adopted by the UN General Assembly on April 13, 2005 by a consensus resolution and opened for signature since Sept. 14, 2005.

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An American Hiroshima?
James Goodby
Patriot News, Harrisburg, PA
(for personal use only)

The city governments of New York and Washington are outraged because the Department of Homeland Security has cut their grants for programs designed to deal with a terrorist attack.

This is only the tip of the iceberg. In our current fiscal situation, the federal government is not providing enough resources to prevent an American Hiroshima in the next decade.

Today, America is at greater risk of suffering a nuclear attack on one or more of its major cities than during the Cold War.

Consider the following:

The 9/11 Commission reported in 2004 that "al-Qaida has tried to acquire or make nuclear weapons for at least 10 years." The sole purpose of this sustained effort is to destroy an American city. Nuclear deterrence will not affect al-Qaida's plans. Keeping atom bombs out of Osama bin Laden's hands is the only way to save American lives.

Sen. Richard Lugar, R-Ind., asked 85 experts to tell him what they thought the chances are that a nuclear bomb might be used against the United States at some point during the next 10 years. The experts told him there was a 20 percent chance. Considering the hundreds of thousands of fatalities that would result from an attack on any big American city, 20 percent is a high level of risk.

Black markets are the most likely source of a nuclear bomb for a terrorist organization.

For several years A.Q. Khan, a Pakistani scientist, ran a secret network that sold nuclear materials, bomb design and hardware to North Korea, Iran, Libya and perhaps others. It was rolled up late in the game. Too late, in the case of North Korea.

North Korea and Iran have shown the world that the nuclear nonproliferation treaty means little or nothing to them. Others will follow their lead if they get away with it. More nuclear weapons in more hands adds up to a greater risk that an atom bomb will get into the hands of terrorists.

America's borders are porous. Police found an expertly constructed tunnel running between a warehouse in Tijuana, Mexico, and one in San Diego. We were told that it was used for smuggling marijuana, but it could have been used to smuggle nuclear materials into the United States.

No one can say otherwise.

These are the elements of a "perfect storm" and they all point to a catastrophe. They also point to an inescapable conclusion: Our government needs to seal potential leaks and intercept any leaks that might occur long before deadly nuclear weapons reach our borders.

Sen. Lugar and Sen. Barack Obama, D-Ill., have introduced a bill to help strengthen the ability of America's friends and allies to detect and interdict illicit shipments of weapons and materials of mass destruction. This bill should be adopted by Congress and funded generously.

Are we Americans worried about nuclear terrorism?

Of course we are. Terrorism ranks third or fourth among the top concerns of Americans. An NBC News/Wall Street Journal poll conducted in September 2005 reported that 75 percent of the respondents thought the United States was not adequately prepared for a nuclear, biological or chemical attack.

Americans have a realistic view of the mortal threat they face, and they look to their government to deal with it. Shouldn't this be reflected in our government's policies and budgets?

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B.  Japan

Downhill path from fear to proliferation
Robyn Lim
Japan Times
(for personal use only)

Why have some of Japan's leaders been talking about the need to acquire the ability to attack North Korean missiles on the launchpads? It's because they know that the United States, despite its overwhelming air and maritime power, cannot credibly threaten North Korea. That is because North Korea holds Seoul hostage by threat of artillery and rockets. Thus Pyongyang's dangerous nuclear and missile brinkmanship is potentially destabilizing.

Moreover, North Korea has given Japan a strong case for developing nuclear weapons with which to deter China, without Japan's having to say so. So East Asia could be on the brink of a spiral toward dangerous nuclear confrontations over which the U.S. would have little influence.

Currently, Japan has no ability to target North Korean missile launch sites. Thus talk from Chief Cabinet Secretary Shinzo Abe about future preemptive strike options is partly domestic politics. Abe, by representing himself as tough on North Korea, wants to cement his claim as successor to the prime minister's post when Junichiro Koizumi steps down in September. But more than domestic politics is involved.

If Japan were serious about acquiring the ability to hit a North Korean missile on its launchpad, the weapon of choice would probably be a highly accurate "land attack" cruise missile of the Tomahawk variety. These missiles can be launched from surface ships, aircraft and submerged submarines. The Tomahawk was developed in the 1980s to give the U.S. president some conventional options so that in a crisis with Moscow he would not have to choose between nuclear Armageddon or capitulation.

But if Japan were to start thinking about acquiring such a land attack cruise missile, it would be doing so in a very different strategic context -- not an environment in which two nuclear-armed superpowers had reached strategic parity and knew that a collision between them would be simply too dangerous, but one posing a much more multidimensional threat.

Many questions arise from Japan's talking openly about acquiring preemptive strike capabilities. Would Japan need to attack North Korean missiles with nuclear warheads, or would nonnuclear weapons be sufficient? If Japan could be confident of taking out North Korean missiles with conventional warheads, this could add to the case that Japan still has no need for nuclear weapons.

And what about China? China is North Korea's quasi-ally, and targets Japan with nuclear weapons. Japan might think that it could deter China with conventionally armed cruise missiles. But China is so big that it would be a sponge for such missiles.

So if Japan starts to think it needs offensive conventional weapons, it could be a slippery slope toward acquiring nuclear weapons. And Japan, by acquiring nuclear weapons pointed at North Korea, would then be able to deter China without needing to say so. True, missile defense meets Japan's strategic needs because it is nonnuclear and defensive. But there is no guarantee that it is going to work. And as presently configured, missile defense will not work against the sophisticated cruise missiles that China has been developing with Russian help.

In 2003, then Japan Defense Agency chief Shigeru Ishiba talked publicly about the need for preemptive strike options. He also hinted that Japan might ask Washington to sell it the Tomahawk, which Britain has been allowed to purchase. That issue went on the back burner because of opposition in Japan's ruling coalition. But it will be back on the front burner now that North Korea has again behaved provocatively.

So if Japan now formally asks the U.S. to sell it Tomahawk land-attack cruise missiles, what would that mean? Many observers would conclude that in vastly changed strategic circumstances, Japan is no longer willing to rely for its nuclear security on the U.S. umbrella and the prospect of missile defense.

Moreover, the alternative to extended deterrence is not conventional capability, as many people seem to think. To the contrary, the end of extended deterrence would very likely usher in nuclear proliferation in East Asia.

If America were to refuse to sell the Tomahawk to Japan, Japan could develop it anyway, possibly in cooperation with its friends in Taiwan. And an American refusal would make it obvious that there was not much trust in the U.S.-Japan alliance. That should not surprise us greatly. Nuclear weapons and the means of their delivery have a habit of disclosing the bedrock interests of states in a self-help and dangerous world.

Robyn Lim is professor of international relations at Nanzan University, Nagoya, and the author of "The Geopolitics of East Asia."

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C.  Russia - US

Russia, U.S. set to start talks on uranium exports - ministry
RIA Novosti
(for personal use only)

Talks between Russia and the United States on lifting restrictions on the supplies of Russian uranium to the U.S. will open in Moscow on Tuesday, an economics ministry official said.

"The talks with the U.S. will start today in Moscow," Maxim Medvedkov, head of trade talks department at the Ministry of Economic Development said.

He added that Russia would be represented mostly by officials from the Federal Agency for Nuclear Power.

Restrictions on imports from Russia of low-enriched uranium have been in force since the Soviet era. Russia is currently allowed to operate on the U.S. market without a 116% import duty only through the United States Enrichment Corporation (USEC), a special intermediary agent, under the HEU-LEU Conversion program.

The U.S. International Trade Commission voted on July 18 to keep the 116% import duty on Russian uranium products claiming that the lifting of anti-dumping restrictions would seriously harm the American economy.

Russian President Vladimir Putin earlier said Russia opposed U.S. discrimination against its nuclear companies and wanted to supply uranium directly.

"We disagree with the discriminatory restrictions that are currently in force in the U.S. for Russian nuclear companies, and would like to supply uranium for your [American] nuclear power plants directly, and not via an intermediary monopoly that was established, in our opinion, artificially," Putin said in response to a American question posed during a Web cast on June 6.

Russia and the U.S. have previously agreed to form a task force to draw up an action plan designed to resolve the anti-dumping issue.

Sergei Kiriyenko, the head of the Federal Agency for Nuclear Power, said on the sidelines of the summit of the Group of Eight industrialized nations in St. Petersburg earlier this month that Russia and the U.S. were not planning to prolong their HEU-LEU program for converting high-enriched uranium into low-enriched uranium beyond 2013, but that Russia would comply with all its obligations under the program.

He added that in hindsight, he did not think the Russian side should have agreed to sell low-enriched uranium to the U.S. through a go-between monopoly.

"We are not demanding any preferential treatment, any benefits or special conditions, but we are demanding equal rights and equal opportunities for competition on the U.S. market," Kiriyenko said.

Asked whether talks with U.S. negotiators in late July were likely to produce a breakthrough on the anti-dumping issue, Kiriyenko said: "Of course not. We wish it could, but there is a long way to go. There are no quick fixes."

He said the issue would take two or three years to resolve through the courts, or a year through negotiations, but that Russia would try to have the restrictions lifted by 2010. By this date, contracts for uranium supply beyond 2013 are to be signed, he said.

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U.S. - Russia program for plutonium fizzles
H. Josef Hebert
Associated Press
(for personal use only)

Hailed six years ago as a breakthrough in safeguarding Russia's nuclear materials, a U.S.-Russian plan to rid the world of tons of plutonium has foundered and achieved little.

Even though the United States has spent $1.4 billion, none of the plutonium has been removed from the weapons stockpile, nor is any expected to be destroyed anytime soon. In addition, Moscow recently acted on its own to change the program so it better suits Russia's energy goals.

With the Bush administration beginning talks with Russia for broader cooperation on nuclear energy, the troubled plutonium program sheds light on how difficult negotiations between the countries can become.

At the just-concluded summit of world powers, President Bush and Russian President Vladimir Putin promised continued discussions on the program, which calls on each country to eliminate 34 metric tons of plutonium from weapons stockpiles.

The program got under way with great fanfare in 2000 as an ``unprecedented'' initiative to curb nuclear proliferation. The United States and Russia would work on parallel tracks to take the plutonium from warheads, blending it with uranium so it could be used in commercial power-producing reactors.

The amount was a fraction of the militaries' plutonium stockpiles. While exact numbers are classified, the United States is believed to have about 100 metric tons and Russia about 145 metric tons.

The program was seen as a way to get Russia to start destroying its excess plutonium, removing the possibility of theft in a country with fewer safeguards than the United States.

Originally both countries were to build a plant to convert the plutonium to a mixed-oxide fuel -- a blend of plutonium and uranium. That led to a string of problems because Russia didn't want to pay for its plant, and there was a long dispute about who would be liable in case of worker injuries.

Russian officials said this year that they no longer were interested in turning the plutonium into the mixed-oxide fuel, but wanted to burn the plutonium in a type of reactor that, under some conditions, can produce more plutonium than it consumes.

Meanwhile, the estimated cost of the proposed U.S. conversion plant in South Carolina has jumped from $1 billion to $4.7 billion, and the cost of a second plant needed to take apart the plutonium pits removed from warheads has grown to $2 billion, four times what it was projected to cost five years ago, according to a House committee monitoring the program.

``Somebody ought to rethink the idea,'' said Rep. David Hobson, R-Ohio, chair of a House Appropriations subcommittee that this year eliminated money for the program. The full House went along.

A Senate committee, however, wants to keep spending on the South Carolina plant -- $335 million next year to start construction. But to reflect its displeasure with Russia, the committee eliminated $35 million that was to advance the Russian program.

Matthew Bunn, a nuclear non-proliferation expert at Harvard University, said the original program is on the verge of collapse.

``The idea of doing it in parallel, if not dead, is drawing its last breath,'' Bunn said.

Linking the programs was essential to non-proliferation efforts because it would push the Russians into a commitment to cut their plutonium stocks, he said.

``We've had a lot of diplomatic effort and spent a lot of money, and we haven't gotten rid of a gram of plutonium,'' Bunn said.

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D.  Nuclear Security

Senior official reprimanded in DOE computer theft case
H. Josef Hebert
Associated Press
(for personal use only)

Energy Secretary Samuel Bodman has reprimanded a senior official because
1,502 nuclear weapons workers were not told for nearly 10 months that their Social Security numbers and other information had been stolen by a computer hacker.

The action came as the department's inspector general blamed a breakdown in communications and poor management judgment for the failures to properly respond to the theft.

The IG report also said there was a "lengthy delay in the department's assessment of the impact" of the improper penetration of the National Nuclear Security Administration's computers at a service center in Albuquerque, N.M., last September.

The incident was not made public, nor were the individuals whose information had been compromised informed, until June.

"These employees were not well served this department," said Bodman, who apologized to them.

The senior official who was reprimanded was not identified.

NNSA Administrator Linton Brooks, who was interviewed extensively by the IG investigators and named in the report, has acknowledged that he learned of the computer file theft last September but did not tell his superiors at the DOE.

The IG report said Brooks, a former ambassador and nuclear arms negotiator, "took full responsibility" for the failure to inform Bodman and his deputy about the theft and acknowledged that he was the most senior official responsible for not following up to ensure the workers were notified of the theft.

The IG investigators identified seven other senior officials "who shared some level of responsibility for the way in which the matter was handled," said a summary of the report.

Bodman said there may be further disciplinary action, but he added that with the changes he has ordered based on the IG's recommendations "the department is putting this incident behind it and moving forward."

The NNSA is a semiautonomous agency within the department and oversees the nuclear weapons programs. The workers whose information was compromised worked for contractors at NNSA facilities around the country.

The incident was first made public at a June 9 congressional hearing. Bodman has said he and his top deputy first learned of the theft two days before the hearing.

At the time, Rep. Joe Barton, R-Texas, chairman of the Energy and Commerce Committee, demanded that Brooks, the No. 3 official at the Energy Department, be fired for not promptly informing his superiors of the theft.

The IG report said the "department's handling of this matter was largely dysfunctional" and blamed the communications breakdown on "questionable management judgments" and confusion among some managers about lines of authority as they involved the semi-independent NNSA and other DOE offices.

It's not known whether any of the information on the files has been used improperly. Nor has there been a great deal of information made public about the theft. Although the theft occurred from the NNSA's unclassified computer system and not the weapons-related classified system the full IG report remains classified and only a brief summary was released.

Brooks told the congressional hearing in June that the file contained names, Social Security numbers, date-of-birth information, a code where the employees worked and codes showing their security clearances.

The IG report called on the department to establish a clear and unambiguous policy on notifying employees of such thefts in the future.

It also said it needed to more clearly define who among various DOE offices some of which are duplicated within NNSA and other parts of the DOE is responsible for briefing the secretary and deputy in such matters.

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E.  Pakistan

Pakistan launches huge nuclear arms drive: Satellite images reveal major building site US and China embroiled in buildup of rival arsenals
Randeep Ramesh & Julian Borger
The Guardian
(for personal use only)

Pakistan appears to have embarked on a dramatic expansion of its nuclear arsenal with the construction of a new heavy water reactor capable of producing enough plutonium for up to 50 warheads a year, according to a report released yesterday by a US thinktank.

The report by the Institute for Science and International Security (Isis), is largely based on commercially available satellite images showing a large building site at a nuclear production complex at Khushab, in Pakistani Punjab.

Isis, a non-governmental nuclear watchdog, estimates that the huge rectangular building under construction and the circular structure inside it almost certainly represent the early stages of a 1,000MW reactor capable of generating more than 200kg (440lbs) of weapons-grade plutonium per year. When completed it would be 20 times the size of the existing reactor at Khushab.

The Khushab complex uses deuterium oxide, known as heavy water because of its chemical similarity to water, to produce plutonium and tritium, which is used as a booster in nuclear fission weapons.

The Isis report suggests the Indian government must know of the new reactor and may be seeking to increase its own plutonium production. In an agreement with the Bush administration, under review by Congress this week, India insisted several of its own nuclear reactors remain exempt from international safeguards.

"South Asia may be heading for a nuclear arms race that could lead to arsenals growing into the hundreds of nuclear weapons, or at a minimum vastly expanded stockpiles of military fissile material," the Isis report said.

The Pakistani army is thought to have about 50 uranium warheads. India and Pakistan, which have fought three conventional wars in less than 60 years, already have nuclear weapons and an arsenal of missiles capable of reaching far beyond each other's territory.

There has so far been no official reaction from Islamabad, although the Washington Post quoted an unnamed "senior Pakistani official" as acknowledging that an expansion of the country's nuclear programme was under way.

Ayesha Siddiqi Agha, a Pakistani writer on defence issues, pointed out that since Washington had proposed a nuclear deal with India, the Pakistani establishment had been keen to "match it": "The signal is that while India surges ahead, Pakistan has ways to pull them off balance. So this may be about restoring a psychological balance between the two."

Commodore Uday Bhaskar of the Institute of Defence and Strategic Analysis in Delhi suggested the timing of the report could be intended to influence the US Congress's debate on the Indian deal:

"My initial reaction is that one of the report's authors (David Albright) is a critic of the India-US nuclear deal and therefore this report has to be seen in the light of its passage through Congress. It may be true but there's a reason why the report appears now."

Mr Albright, a former UN weapons inspector who now runs Isis, denied there was any link between the timing of the report and the congressional debate. "It is a strange twist to the debate to see a potential Pakistani threat to India as an attempt to derail the India agreement in Congress," he said, adding that the publication was dictated more by the need to get the report out before the summer holidays began.

There is speculation in Delhi that the new plant may be a fresh sign of China 's commitment to a "strategic partnership" with Pakistan. The pair already have extensive military and diplomatic ties.

"China has supported Pakistan since the 80s and it remains the wild card here," Commodore Bhaskar said. "At the time of the Indo-US deal, there were clear indications that Beijing thought if Washington can assist India, China can aid Pakistan."

Mr Albright said Chinese assistance was a possibility.

"You always worry that some of this is coming from China. Can Pakistan really do all this on its own? You wonder," he said. "That would be very serious."

According to the Isis report, construction of the new reactor at Khushab began in March 2000 and could be finished in a few years.

"However, nothing suggests that Pakistan is moving quickly to finish this reactor," the report said, suggesting that there may be a bottleneck in the supply of heavy water or in Pakistan's fuel reprocessing capacity.

A satellite image showing the Khushab site said by Isis to be being redeveloped for weapons-grade production

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F.  Iran

Mideast fighting threatens to complicate diplomacy over Iran's nuclear program
Brian Murphy
Associated Press
(for personal use only)

Iran insists it will not be drawn into the Middle East fighting between Israel and Tehran's Hezbollah clients but may be unable to avoid fallout on the already difficult diplomatic struggle over its nuclear program hardening positions on all sides, experts on the talks say.

Outside Iran, the fighting could sharpen the resolve of Western powers and others that fear Iran wants to build a nuclear weapon and is using what it calls a civilian program as a cover for that ambition. Inside the country, hard-line forces might become increasingly unwilling to make concessions.

One of the immediate worries is that Iran could set off a regional arms race and bring new risks to an area brimming with tensions. The fighting in Lebanon and the Hezbollah rocket attacks highlight concerns that nuclear material, whether from Iran or elsewhere, could in the future find its way into the hands of militant groups like Hezbollah who want to destroy Israel.

"This will certainly be on the Western mind," said Ahmad Bakhshaiesh, a political affairs researcher at Azadi University in Tehran who has written extensively on the Iran's nuclear positions. "No one is saying this is possible or could even happen, but just the thought will likely increase the pressure on Iran."

Earlier this month, a private nuclear watchdog group, the Nuclear Threat Initiative, criticized world leaders for not following through on pledges to secure nuclear sources. The Washington-based group said tons of nuclear material remains "dangerously vulnerable to either outsider or insider theft."

The report did not mention Iran by name but called on leaders in the Group of Eight the world's richest nations to take stronger steps to close all gaps in nuclear security.

But some hard-line Iranian groups may use Israel's pounding of Hezbollah to strengthen their argument that Iran must never give up the option of developing nuclear weapons, said Nasser Hadian, a political analyst at Tehran University who closely follows the nuclear talks.

"In their minds, the region is so volatile that the only safety is to have the ability to produce a nuclear deterrent," Hadian said. "These voices have been getting louder in recent days."

Iran is considering a package of incentives, including advanced technology for peaceful nuclear reactors, in exchange for a long-term moratorium on uranium enrichment, which is used for nuclear power plants but can be retooled to create weapons-grade material. Iran said it would reply on Aug. 22 to the offer by the five permanent U.N. Security Council members and Germany.

But Iranian officials have given no clear signals they are willing to give up enrichment. The six nations have warned they are running out of patience and could seek a Security Council resolution that would demand Iran suspend uranium work.

Iran argues it is entitled to uranium enrichment under the Nuclear Proliferation Treaty and says it only seeks electricity-producing reactors. Washington and allies believe Iran's Islamic regime secretly wants to push ahead with a nuclear arms program.

"Any tension in the region does not have a positive effect on Iran's negotiating position on the nuclear issues. It will have a negative effect," said former Iranian Vice President Mohammad Ali Abtahi, who now runs a center for inter-religious dialogue.

Iran's 1979 Islamic Revolution inspired the founders of Hezbollah in the early 1980s, and Iran has been the group's main pipeline for funds and supplies. Iran denies it had any role in planning the cross-border raid two weeks ago that captured two Israeli soldiers and unleashed the worst Arab-Israeli fighting in 24 years.

Iran also dismisses Israeli claims it has provided Hezbollah with longer-range Fajr-class missiles that have reached deep into Israel.

One of Iran's top military officers, Maj. Gen. Seyyed Hassan Firuzabadi, said Saturday that Iran would never join the fighting in Lebanon.

"The crisis in Lebanon has not affected our nuclear dispute," said Kazen Jalali, spokesman of the Iranian parliament's National Security and Foreign Policy Commission. "Iran has never pursued nuclear weapons. So how could Iran provide Hezbollah with them?"

The dual crises the Mideast fighting and the nuclear showdown has brought some sweeping mood swings in Iran.

On nuclear technology, there's rare consensus. Even reformers who strongly oppose the theocratic state rally behind nuclear technology as an issue of national pride and self-determination.

But there are clear divisions over Iran's steadfast support for Hezbollah.

Many Iranians including those sympathetic to the suffering of Lebanese civilians question why Iran continues to open the vaults for Hezbollah when the domestic economy is sputtering and unemployment nearing 40 percent, according to some independent estimates.

"It makes me angry to hear the government praising Hezbollah and paying for Hezbollah when we have so many troubles right here," said Mohammad Faroudeh, a 40-year-old street sweeper. "I feel bad for the Lebanese, of course, but we can't forget Iranians."

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Iran prepared for nuclear talks without preconditions - official
RIA Novosti
(for personal use only)

Iran is prepared to hold negotiations on its nuclear program without any preconditions, Iranian Foreign Ministry spokesman Hamid Reza Asefi said Sunday.

Iran's nuclear program has been a source of major controversy since the beginning of the year, as many countries suspect the Islamic Republic of pursuing a covert weapons program under the pretext of civilian research, despite its claims to the contrary.

Asefi said Iran would not give up its legitimate rights in the nuclear sphere and believed all problems should be resolved through negotiations without any preliminary conditions.

Asefi said the refusal by six world powers acting as international mediators to participate in the negotiating process would not bring them any benefits. Asefi added that if the six world powers changed their policy on Iran's nuclear issue, the Islamic Republic would also change its approach.

The five permanent UN Security Council members and Germany have drafted a package of incentives to persuade Iran to halt work on enriching uranium, which could be used in both electricity generation and weapons production. EU foreign policy chief Javier Solana presented the offer to Tehran during a visit to Iran June 6.

The Iranian diplomat said the referral of the Iran nuclear file to the UN Security Council would not mean a day of doom for the Islamic Republic but expressed the hope that the dossier would be returned to the UN nuclear watchdog.

At their meeting July 12 in Paris, the foreign ministers of the six world powers said they regretted Iran had not given a positive answer to their proposal and said they were prepared to refer the Iran nuclear file to the UN Security Council, which could impose sanctions, if the Islamic Republic were found to be in breach of the Nuclear Nonproliferation Treaty.

The leaders of the G8 group of industrialized nations said at their summit in St. Petersburg July 15-17 they also supported a decision by the six world powers to return the discussion of the Iran nuclear issue to the UN Security Council.

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Iran to produce some nuclear fuel on its territory - council
RIA Novosti
(for personal use only)

Iran will produce some amount of nuclear fuel on its territory to satisfy the country's energy demands, the influential Supreme National Security Council said Thursday.

"Under Iran's legislation, 20,000 MW of nuclear energy will be produced in the next 20 years and some nuclear fuel will be produced in the country," the council said.

The council also said Iran was ready for talks as they represented the only reasonable and logical way of resolving the crisis around its nuclear program.

"Iran will have no other option but to review its nuclear policy if confrontation is chosen instead of talks," the council said.

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G.  Russia

Sergei Dmitriyev
Moscow News
(for personal use only)

Sergei Kiriyenko, Russia's nuclear energy chief, is to sign an order to merge the country's civilian nuclear companies into one state-owned enterprise (along the lines of Russia's gas giant Gazprom) in order to help it compete on the world nuclear market.

The work in this direction began after Russian President Vladimir Putin approved a plan to gather all civilian nuclear sector companies into a single, market-driven corporation just like France's Areva or Germany's Urenco.

Under the plan, the single state enterprise called Atomprom will be created on the basis of the many smaller, sometimes overlapping, state-controlled companies in the nuclear sector. Russia's Atomprom will compete on the world market not with national, but with transnational companies, such as Germany's Siemens and Japan's Toshiba Corporation.

The uranium mining division of Atomprom will include Russian miners Priargunsk, Khiagda and Dalur, and two abroad joint ventures. One of them is in Kazakhstan and another in Uzbekistan.

At the first stage of the assets unification, a mining company will be created. It will be based on the assets of the two largest Russian companies, which are working in the nuclear industry sector. It will be TVEL, the nuclear fuel monopoly, and Techsnabexport (or TENEX), Russian atomic exporting and importing company. They will own 50 percent of the new company's authorized capitals. The new mining company is to be establishment in approximately two months. However it is worth notion that TVEL is not going to transfer its property to the new company's management at the current stage. Whereas TENEX agreed to leave its foreign mining and trading assets to the new management. Nevertheless, the new company's mining policy will be centralized.

It should be noted that currently nearly half of uranium, used by Russia, comes from so-called "warehouse stocks." As experts say, these reserves will be sufficient for only 50 years. That is why, one of the main tasks of the new mining company will be to increase uranium extraction in Russia as well as abroad. In addition, TVEL needs some 9 thousand tons of uranium annually while it extracts no more than 3100-3200 tons of uranium in Russia.

The mining company is supposed to unite both export and import of uranium. However, creation of the mining holding is only a stage in creation of the united company on production of nuclear fuel within Atomprom, the future nuclear industry concern, based on Rosatom assets. All the uranium-extracting assets will be consolidated in the mining company, which will be owned by the united fuel company. As a result, one big fuel company will be formed, which will carry out a full uranium production cycle: from uranium extraction to production of fuel rod arrays.

TVEL Corporation is one of the world leading manufacturers of nuclear fuel. TVEL-labeled fuel keeps running 76 commercial (17% of global market) and 30 research reactors in 13 countries worldwide.

Foreign economic JSC Techsnabexport carries out export of goods and services, produced by enterprises of the Russian Federation Federal Agency for Atomic Energy as well as import of state-of-the-art technological, medical and other types of equipment. The unique feature of JSC Techsnabexport includes delivery of an entire range of nuclear fuel cycle products and services.

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Russian Navy to deploy nuclear missile carriers in 2007
(for personal use only)

The Russian Navy will deploy submarine nuclear missile-carriers of ``Borei'' class since 2007 built at the Northern Machine Building Enterprise (Sevmash), that will also begin the construction of floating nuclear power stations, Vice-premier, Defense Minister Sergei Ivanov told journalists on Thursday after he had visited Sevmash. The volume of the state order has been brought to the Soviet-era level, although the structure of the defense order is different now, he said.

``The Russian Navy will deploy strategic submarine missile- carriers of Borei class since next year,'' Ivanov declared. Three Borei submarines - Yuri Dolgoruki, Alexander Nevsky and Vladimir Monomakh, are being built at the Sevmash enterprise now, he said. The other projects under way include a multi-purpose submarine of the ``Yasen'' class, the overhaul of the Admiral Nakhimov nuclear cruiser, readjustment of an aircraft- carrier earlier called Admiral Gorshkov for the Indian Navy, Ivanov said.

The state order accounts for most of the funds used by Sevmash. Nonetheless, Sevmash managers well realize that we shall not return to the proportions of the Soviet-era defense order. Therefore, Sevmash has been producing facilities for civilian purposes - tankers, drilling platforms and it has launched the construction of a floating nuclear electric power station, Ivanov said. ``Because of a huge load of work ``Sevmash'' has been working in three shifts,'' Ivanov said. ``Actually, we have returned to the Soviet-era production volume, but in a more diversified form,'' Ivanov said.

Anyway, Sevmash will remain a center for building sumbarine nuclear fleet, he noted. There are two big enterprises for building and modernization of nuclear submarines - Sevmash and Zvezdochka, Ivanov said.

He has dismissed speculations of ``Sevmash'' being turned over to joint stock ownership as ``a crazy idea''. ``Sevmash is on the list of enterprises not subject to auctioning,'' Ivanov said. ``Even if someone with a fevered imagination thinks of that the realization of this idea is impossible,'' Ivanov stressed.

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China, SKorea push for nuclear talks as NKorea slams 'imbecile' Rice
Jun Kwanwoo
Agence France-Presse
(for personal use only)

China and South Korea said Tuesday they were pushing to hold six-nation talks on the North's nuclear ambitions at an Asian security forum here, where the issue promises to dominate the agenda.

North Korea raised the stakes ahead of Friday's ASEAN Regional Forum, describing US Secretary of State Condoleezza Rice, who is due to attend, as a "political imbecile" for criticising its recent missile tests.

Despite doubts that North Korea would agree to the meeting, China said that informal talks had been tentatively scheduled for Friday, although the plans had not yet been finalised.

"The time currently being planned is the afternoon of the 28th, but it is still under negotiation," Chinese deputy foreign minister Wu Dawei told reporters after arriving in Malaysia.

"At the moment, all sides are still making efforts but whether it will happen or not, nobody can tell yet," he said.

"I hope it will happen. It does not necessarily have to be six-party talks -- it can be a meeting between six foreign ministers," he said, referring to the participants -- the two Koreas, the United States, China, Japan and Russia.

South Korea also said Tuesday that discussions were under way to bring together the six foreign ministers, who are all due to attend the ASEAN Regional Forum, but that North Korea's participation hung in the balance.

"There have been discussions... that it is necessary for the foreign ministers of the six parties to discuss the early resumption of the six-party talks," South Korean Foreign Minister Ban Ki-Moon told journalists.

"But I am not certain that North Korea's foreign minister is interested in the process."

North Korean Foreign Minister Paek Nam-Sun is due to arrive in the Malaysian capital on Thursday. Ban said he is keen to have a bilateral meeting with Paek, but that the schedules have yet to be arranged.

"I would stress that North Korea's return to six-way talks is crucial to settling the issue of missile tests," he said. "I have proposed the meeting to my North Korean counterpart, but I have not yet had confirmation from him."

The United States and South Korea have shown interest in holding five-way talks if the North refused to join, but Wu reiterated China's opposition to meeting without Pyongyang.

"My feeling is, it is best not to do so, it will lead the six-party talks into more difficulties," he said.

North Korea has boycotted the three-year-old nuclear disarmament talks since November in protest at US financial sanctions.

Tensions rose after Pyongyang's July 5 test-firing of seven ballistic missiles in defiance of international appeals. UN condemnation and sanctions followed.

The North's official Korean Central News Agency (KCNA) on Monday accused Rice -- who called North Korea a "completely irresponsible" and "dangerous" state for launching the missiles -- of distorting the facts.

"Obviously, Rice made such an outcry in a bid to justify the US hostile policy to pressurize the DPRK (North Korea) with the ministerial meeting of the ASEAN Regional Forum at hand and draw regional countries into its pressure campaign," KCNA said in a commentary.

It said the North was under threat of attack from "the worst gangsters in the world" after the Bush administration listed it as part of an "axis of evil."

"It was none other than Rice who let loose a spate of such piffle over the launch of a few missiles as part of military training to cope with the US reckless moves for aggression and war," KCNA said.

"This cannot be construed otherwise than an outburst made by a political imbecile."

Malaysia's Foreign Minister Syed Hamid Albar said Monday the two Koreas would meet on the sidelines of the Asian forum this week but that the North was unwilling to join the six-nation talks.

"I think they feel that the sanctions, the banks, the embargo on the cash transactions is hurting them a lot," he said. "So all these things need to be addressed in order to bring all the parties back to talking."

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Kim's card: why China is reluctant to step up the pressure on Pyongyang
Anna Fifield and Richard McGregor
Financial Times
(for personal use only)

In the tense aftermath of North Korea's missile tests this month, an official of the reclusive state traveled to Beijing to meet Hu Jintao - a chance, one might have thought, for a robust exchange of views in the midst of a diplomatic storm.

But his encounter with China's president unfolded in an almost surreal fashion. Yang Hyong-sop, a vice-president of North Korea's parliament, was shown on Chinese television sitting stiffly in an over-stuffed armchair, straining to read from a piece of paper held high in both hands. Mr Hu, while calling for peace and stability on the Korean peninsula, did not use the word "missile" once.

North Korea's test-firing of seven missiles provoked a flood of familiar demands from around the world that China, its fraternal neighbour and main source of energy and food, "fix" the problem. But such calls rest on the assumption that Beijing has the ability to change Pyongyang's behaviour and is willing to use its leverage.

"Can China say jump and make North Korea jump? I don't think they can," says a Beijing-based diplomat. Many Chinese academics agree. "My basic assessment (of China's influence) is: not that much," says Jin Linbo, of the China Institute of International Studies in Beijing.

Beijing won global kudos in September when it persuaded Pyongyang to return to the so-called six-party talks, also involving the US, Russia, Japan and South Korea, to persuade it to drop its nuclear programme. Beijing's success bolstered the view, once held with particular conviction in parts of the Washington political establishment, that China held the key to resolving the nuclear issue.

But Pyongyang's defiance over the missile tests and the frustrating nuclear negotiations - now suspended and once again awaiting North Korea's return to the table - have been a sobering reminder of a more complex reality.

Like the US and Japan, China is opposed to North Korea gaining nuclear weapons, but it is an objective Beijing weighs against its other interests on the peninsula, to maintain the status quo and avoid instability on its borders. Beijing is conscious that any attempt to bring North Korea to heel would be risky: a paranoid Pyongyang could turn against its neighbour and deprive China of a vital buffer between it and South Korea, which is still host to about 27,000 US troops.

"When push comes to shove the difficulty that the Chinese have is related to a classic North Korean tactic - creating leverage out of weakness," says Scott Snyder, a Korea expert at the Asia Foundation currently at Stanford University. "The difficulty with the Chinese situation is that the means they have to try to use their leverage is also something that if not handled carefully can be used against them," he says. "The Chinese fear is 'what if Kim Jong-il does go and do something crazy and collapses on us?' And the North Koreans probably have ideas about what they could do to escalate that (fear) further."

In China itself, North Korea's recalcitrance is aggravating but comes as no surprise. The missile tests, conducted despite Chinese objections, and the frosty diplomatic encounters in their aftermath, provide fresh evidence of what has long been a wary, difficult relationship. "China does not expect North Korea to do so much - it knows the limits of the special situation on the Korean peninsula," says Mr Jin.

On the face of it, such an assessment seems strange, as North Korea's dependence on China has grown exponentially in recent years - the result of increasing international isolation, dwindling support from Russia after the collapse of the Soviet Union, and devastating floods and famine in the 1990s.

North Korea's trade with the outside world is estimated to have reached Dollars 4bn last year, with China accounting for Dollars 1.58bn of that, according to the Korea International Trade Association in Seoul. The Bank of Korea, the South's central bank, estimates that China accounts for 77 per cent of the growth in North Korea's trade volumes since 2000. Without this, North Korea would probably have recorded negative growth rather than its annual average of about 2.1 per cent.

Chinese products worth Dollars 1.1bn flowed into North Korea last year, and made-in-China goods now make up almost 80 per cent of goods on sale in North Korean markets. North Korea is running a Dollars 500m trade deficit with its giant neighbour, which is probably accounted for as energy and food subsidies, economists say. Chinese food aid overseas soared by 260 per cent year-on-year in 2005, with nearly all the growth coming from cereal shipments to North Korea.

"What are the Chinese getting in return?" asks Marcus Noland of the Institute for International Economics in Washington. "In almost every case the North Koreans are supplying natural resources - mainly low-grade coking coal and iron ore, but also ginseng and marine products like sea urchins."

"China is so resource-hungry and is the midst of such a commodity boom that even low-grade North Korean iron ore is worth something, it can be swapped for a bunch of used radios and TVs," Mr Noland says.

Meanwhile, Chinese investment in North Korea dramatically increased from Dollars 1.3m in 2003 to Dollars 90m in 2005, accounting for about 85 per cent of all foreign investment. Most of it comes from ostensibly private companies, although many analysts say the majority are at least partially state-owned. A recent International Crisis Group report estimated that more than 150 Chinese companies had started operating in or trading with North Korea since 2003.

China is steadily trying to encourage trading at border cities, particularly over the "friendship bridge" between Dandong and Sinuiju at the western end of the border. After Mr Kim's visit to China in January, there have been increasing signs that the Sinuiju Special Administrative Region project, frozen in 2002, is starting up again. Under the direction of central authorities, Pyongyang loyalists and foreign currency management groups are rapidly being moved into Sinuiju, one of a number of economic zones in North Korea designed to attract foreign investment while quarantining it safely in a small part of the country.

In the east, North Korea has been working with China and Russia to create a 10 sq km free-trade region in the Hunchun area, giving China access to the sea through the North Korean city of Rajin. A 50/50 Chinese/North Korean joint venture, the "Green Pathway" project is expected to cost about Dollars 77m and construction on a road has begun.

China, in short, has become North Korea's economic lifeline, but such patronage has not translated into instant political clout. And nor does Beijing seem willing to test too strenuously the limits of its influence.

North Korea's reliance on China is "very, very high", says Cho Myung-chul, who taught economics at Kim Il-sung University in Pyongyang before escaping to South Korea, where he now works at the Korea Institute for International Economic Policy.

"The US and Japan and others are saying that China should exert more influence over North Korea, but China is not that type of nation and has no experience or history of doing so," Mr Cho says. China's foreign policy was founded on the principle of "non-interference" in other states, a rule that has been bent in the past decade but not ditched altogether. Beijing believes the stance has served it well in repelling criticism by the west.

China and North Korea have long been fond of saying the two countries are "as close as lips and teeth", but such rhetoric masks a much more tense history. Kim Il-sung, Kim Jong-il's father, always played the Soviet Union and China off against one another. In the early nineties, North Korea's xenophobic siege mentality, a feature of the regime since its birth, was accentuated by Beijing's decision to establish diplomatic ties with Seoul. China's willingness to push ahead with market reforms also grated with its determinedly Stalinist neighbour.

"North Korea's media criticised China in a big way. They were very unhappy," says Li Duanqiu, a North Korean expert in Beijing. "They were trying to completely negate the benefits of Chinese economic reform."

Mr Cho, the economist, says North Koreans are generally distrustful of their larger neighbour. "Historical factors are one reason but also, the goals of the two countries are different - they are two different countries that need to cope with different national interests, so their foreign strategy is also different," Mr Cho says. "So North Koreans feel that they cannot completely trust China."

Pyongyang's record on economic reform alone is evidence enough of the limits of China's influence. For two decades, China has offered itself as an example of a single-party state with a thriving market economy and urged its neighbour to follow, but North Korea spurned such reforms. "I used to speak with them about China's reforms but they didn't want to listen," says Cui Yingjiu, a retired Beijing professor who studied economics with Kim Jong-il in Pyongyang in the 1960s.

Mr Cui and other Chinese academics detected a change in North Korea's attitude in the late 1990s, following the country's famine. Kim Jong-il's trip to a dazzling Shanghai in 2001 also influenced his thinking on the economy, they say, but only at the margins.

In July 2002, North Korea finally introduced some tentative market-based principles into its economy, allowing a degree of price and wage flexibility, permitting markets to expand and devolving management decisions to state companies.

Such changes require agile political and economic management, of the kind that China has displayed for decades but North Korea has not. As a result, the most obvious impact of these reforms has been triple-digit inflation and even wider social disparities, without a corresponding wealth effect.

Kim Jong-il's foremost political skill remains playing a weak diplomatic hand to maximum effect. In the same way that he does with the west, Kim Jong-il has cultivated uncertainty and an element of distrust in his ties with China to keep his neighbour off-balance. Such behaviour ensures that the supplies of oil and food continue to flow across the border, whatever else he may do.

China still worries about the worst-case scenario: that North Korea could collapse and leave Beijing with a costly, destabilising refugee problem. It is a fear that Kim Jong-il is happy to nurture and it seems to have effectively kept China at bay, regardless of what the US or Japan might think Beijing could or should do.

The danger for Beijing is that Kim Jong-il might unilaterally change the status quo that it has struggled so hard to maintain. When that moment comes, China might be finally left with no choice but to take on its troublesome neighbour.

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Six-party talks on N.Korea at ASEAN forum unlikely - Russia source
RIA Novosti
(for personal use only)

Moscow sees little chance for a resumption of six-party negotiations on the Korean peninsula's nuclear problem, especially a five-nation meeting without North Korea at an Asian security forum, a Foreign Ministry source said Friday.

The Association of South East Asian Nations will hold a ministerial meeting in the Malaysian capital, Kuala Lumpur, and the Asean Regional Forum July 24-28.

North Korea, which claims it has nuclear weapons, officially announced on July 5 that it had conducted test launches of ballistic missiles, including a long-range Taepodong-2, saying it was the country's sovereign right. Six-nation talks involving North and South Korea, Russia, China, Japan and the United States on resolving the problems around North Korea's controversial nuclear programs opened in 2003 but a round has not been held for over six months.

"There have been proposals to conduct negotiations in Kuala Lumpur - not specific proposals, however, but just an idea that was aired in Beijing on the level of experts," the source said.

He said a multilateral meeting on the problem in Kuala Lumpur was unlikely, adding, however, that "everything could yet change."
But he said Russia would hold bilateral contacts with all parties to the six-nation dialogue on North Korea's nuclear program.

President Vladimir Putin said in mid-July that an early resumption of negotiations was crucial for resolving the North Korean nuclear problem.

The ASEAN security forum in Malaysia will be attended by delegations from 25 countries, including the group of six nations on the North Korean nuclear problem. It is not clear yet whether the forum will also be attended by North Korea's Foreign Minister Paek Nam Sun.

ASEAN comprises Malaysia, Singapore, Thailand, the Philippines, Indonesia, Cambodia, Laos, Brunei, Myanmar and Vietnam. Russia is one of the 10-nation group's partners, along with the United States, Japan, India China, and European Union countries.

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I.  Libya

Kadhafi says Libya was close to building nuclear bomb
Afaf Geblawi
Agence France-Presse
(for personal use only)

Libya was on the verge of building a nuclear bomb before it decided in 2003 to abandon its programme to produce weapons of mass destruction, its leader Moamer Kadhafi said, according to the country's official news agency.

"Libya was on the point of building a nuclear bomb: that is no longer a secret," Kadhafi was quoted on Monday as telling a group of engineers. "The Americans and the International Atomic Energy Agency were well aware."

In a dramatic move that has seen his former pariah state returned to the international fold, Kadhafi announced in December 2003 that Libya was abandoning plans to build weapons of mass destruction.

Kadhafi, whose support for revolutionary causes led to his country being ostracised by the West for more than two decades, and fingered by Washington as a terrorist state, acknowledged that his hopes of building a pan-Arab nation had been illusory.

"We spent a lot of money on military projects but not on civilian projects and reconstruction; our hopes on setting up an Arab nation were immense but unfortunately all failed," he said, recalling that Libya had supported liberation movements in Africa, America and Asia, and the Irish Republican Army (IRA).

"This support was indispensable at that time. It was in the name of Arab nationalism, socialism and revolution. Now all that has changed and we have paid dearly for it," Kadhafi said.

Since Kadhafi's surprise 2003 announcement, a string of Western leaders have visited the north African country, with many eyeing its under-developed potential oil wealth.

The lifting of US economic sanctions on Libya opened a new era in relations -- especially since the Libyan government selected US oil companies Occidental, Chevron and Amerada Hess in January 2005 to prospect for Libyan oil and modernize its oil facilities. Libya has Africa's biggest oil reserves.

Last week, in another commercial deal with the West, Afriqiyah Airways of Libya signed a preliminary agreement to buy 12 Airbus planes for an estimated one billion dollars, with the option to purchase eight further aircraft, Airbus said.

Washington severed ties with Libya in 1981 and began imposing sanctions, two years after radical students ransacked the US embassy in Tripoli.

An alleged Libyan-backed attack on a Berlin disco popular with Americans in 1986 spurred the United States to launch air raids against Tripoli, killing 41 people.

Libya in 2003 accepted responsibility for the bombing of a US Pan Am jet over Lockerbie, Scotland in 1988 that killed 270 people, and agreed to pay families of victims 10 million dollars each in compensation.

Last May, Washington renewed diplomatic ties with Tripoli and formally removed Libya from a US list of states it says sponsor terrorism. It followed this in July by saying it had lifted sanctions on Libyan air transport.

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J.  India - US

As Congress' vote on U.S. - India nuclear deal looms, critics step up opposition
Foster Klug
Associated Press
(for personal use only)

As the House prepares to vote on a plan to share civilian nuclear technology with India, critics are mounting last-ditch efforts to scuttle an accord they say obliterates the global goal of stopping the spread of nuclear weapons.

Lawmakers are trying to attach conditions that, if adopted, could cause the deal to collapse. One possible proposal would require that India halt production of material that could be used to make bombs; another would call for President Bush to certify that India is cooperating to prevent Iran from getting nuclear weapons.

India probably would balk at such conditions, and supporters of the plan have vowed to fight any attempts to include in the legislation what they see as deal-breakers.

The plan, which was expected to be voted on Wednesday, would overturn decades of U.S. policy by allowing trade in nuclear fuel and technology with India in return for safeguards and inspections at India's civilian nuclear plants; military plants would be off-limits.

The Bush administration is asking Congress to make an exception for India in U.S. laws that bar nuclear trade with countries that have not submitted to full international inspections. India built its nuclear weapons program outside the Nuclear Non-Proliferation Treaty.

Supporters say the deal provides crucial energy to a friendly country that has a strong nonproliferation record, and it allows U.S. companies to crack a lucrative market. Critics say it ruins the global nonproliferation treaty and could start a nuclear arms race between India and its rival and neighbor Pakistan.

Speaking Monday night in New Delhi, Indian Defense Minister Pranab Mukherjee said: "Our nuclear doctrine affirms that India will not resort to (a) first strike and never use nuclear weapons against non-nuclear weapon states. India's nuclear doctrine has a purely defensive orientation."

While the accord has broad support from members of both political parties, lawmakers will soon leave for their summer recess. They return to a crowded legislative agenda and to November elections. The full Senate also must vote on the initiative.

In addition, the deal would have to clear the Nuclear Suppliers Group, an assembly of nations that export nuclear material.

As the House vote nears, several lawmakers sent a letter Monday to Secretary of State Condoleezza Rice questioning why the State Department has yet to submit a required semiannual report that details the activities of foreigners deemed to have dealt with Iran or Syria in nuclear trade.

The lawmakers suggested the department was stalling the report until the India deal had cleared Congress. Past reports, they noted, have accused India of proliferation.

Rep. Barbara Lee, D-Calif., said in a statement that it was "staggering that the State Department could be failing to provide Congress with information about illicit transfers of nuclear and chemical weapons-related technology and goods from entities located in the state of India."

State Department spokesman Tom Casey told reporters Monday that he believed the report would be released shortly. He said "there are no political considerations that are delaying its release" to Congress.

Critics also sought to link the Indian deal to a report by the Institute for Science and International Security that said Islamabad was building a nuclear reactor able to fuel up to 50 atomic bombs a year.

"If either India or Pakistan starts increasing its nuclear arsenal, the other side will respond in kind," said Rep. Ed Markey, D-Mass. "The Bush administration's proposed nuclear deal with India is making that much more likely."

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The sound of one hand clapping; India's nuclear ambitions
(for personal use only)

There are many Indian critics, not just foreign ones, of the government's nuclear deal with America

EVEN in their moment of triumph in Delhi in March, the smirks of India's diplomats were tinged with doubt: had they overplayed their hand? George Bush and Manmohan Singh, India's prime minister, had just concluded a deal that promised India American co-operation in civil nuclear energy, despite its testing of nuclear weapons in 1998. This, its supporters gloated, would end India's nuclear isolation and usher in a new era of Indo-American partnership. But the deal required Congress to change American law. India's negotiators worried that the administration could not persuade it to do so.

In fact, it seems that it will be able to. But now attention has turned to the political fall-out in India. The agreement does not need the approval of India's parliament, and has strong supporters. But it has met with hostility from many quarters: the government's allies as well as its opponents; influential scientists and mandarins within India's nuclear establishment; and some respected commentators.

In the next few days, or soon after returning from recess in September, America's Congress is likely to approve legislation giving Mr Bush authority to waive, for India, some provisions of the Atomic Energy Act. This would allow nuclear co-operation, even though India has never signed the Non-Proliferation Treaty (NPT), and has no intention of doing so now.

Proliferation experts campaigned against the agreement in Washington, DC, outraged at its content and timing, just as the world is trying to curb the nuclear ambitions of Iran and North Korea. But the bill is now likely to sail through Congress, after being endorsed late last month by the foreign-relations committees of both houses.

Each house, however, tinkered with the bill, producing different versions that will have to be harmonised. In St Petersburg this week, Mr Singh told Mr Bush that India was concerned about the changes, which seem to impose more onerous conditions than were promised in March and when the plan was first announced last July. He reminded Mr Bush that his government, too, is accountable to the legislature. Mr Bush reassured him that there would be "no shifting of the goalposts".

For many Indian observers, however, the goalposts were already in the wrong ballpark. The main opposition, the Bharatiya Janata Party (BJP), has accused the government of selling India short. This smacks of opportunism. The BJP would have jumped at such a deal had it been on offer when it was in government.

The Indian left is also hostile, and has suggested tabling a constitutional amendment to make such international agreements subject to parliamentary approval. The Communist parties, on which Mr Singh's coalition relies for a parliamentary majority, have taken especial exception to the bill's implications for India's ties with an old friend, Iran. One version of the bill now enjoins India to take a "full and active" part in restraining Iran's nuclear programme. India's Shia Muslims, deemed sympathetic to Iran, are strong in Uttar Pradesh, India's most populous state, where elections are due next year.

Non-proliferation "hawks" (in Indian terminology) worry that the agreement will give India the capacity massively to expand its nuclear arsenal, and so spark a regional arms race. Conversely, some Indian scientists, proud of what they achieved alone, argue that it will act to cap India's bombmaking, undermining its ability to build a "credible minimum deterrent". Homi Sethna, a former chairman of the Atomic Energy Commission, has said that India would be better off signing the NPT. An Indian nuclear scientist could scarcely say anything more damning.

The Indian government has argued that the deal is purely about India's energy needs. But critics say that, even on the most optimistic assumptions, nuclear power will contribute only about 4% of India's power-generation by 2020. They suspect an American ploy to win huge contracts for its nuclear-power industry, or, in the words of Brahma Chellaney, a leading strategic thinker, of using "an energy bait to gain a handle on India's main strategic asset, its nuclear-weapons programme".

Yet, in the same breath, the government also advertises this agreement as marking a "permanent reconciliation" with America. That, of course, is precisely why leftist critics do not like it, fearing the loss of India's non-alignment. Opinion polls, however, suggest that India is one of the few countries where America remains highly popular. This will encourage the government to ignore the howls of protest and press ahead with the deal's next stages: negotiating a detailed agreement with America, seeking approval from the 44-member Nuclear Suppliers Group of countries, agreeing on international safeguards, and returning to Congress with the completed package. The sequence of all this also raises Indian hackles. The government had said that the safeguards negotiations would follow a change in American law.

The congressional amendments have given the deal's Indian opponents an opening, and the debate in India is likely to heat up. An accord Mr Singh and his allies portrayed as an historic breakthrough, symbolising the end of decades of mutual Indo-American mistrust, has revealed just how deep that mistrust runs.

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K.  Nuclear Non Proliferation Treaty

Rogue states play nuclear catch-up to test treaty's teeth
The Canberra Times
(for personal use only)

THE EFFECTIVENESS of the United Nations Nuclear Non Proliferation Treaty is being severely tested by nation states with little experience of democracy and which are ruled by dictatorial regimes with dysfunctional socio-political agendas.

The treaty's compliance protocols are threatened from within by weapon-seeking member states such as Iran and the treaty drop-out North Korea. The greatest external threat is the possibility of the acquisition of "dirty bombs" or even "suitcase" bombs by international terrorist groups.

In June, 2005, Iranians elected Mahmoud Ahmadinejad as their president, replacing the more moderate Mohammed Khatami.

This regime change was marked almost immediately by defiant challenges to the authority of the International Atomic Energy Agency to monitor Iran's nuclear energy activities and to inspect its compliance with the terms of the treaty.

Will Iran follow North Korea's example and withdraw from the treaty? The portents for an IAEA- negotiated resolution of a potentially serious proliferations breach of the treaty by Iran do not look good. According to Iran's nuclear negotiators, UN Security Council sanctions will only reinforce the country's desire to build nuclear weapons. This could mean that Iran might become the world's second nation to withdraw from the treaty.

Such a scenario could present the UN Security Council with an immense challenge. A nuclear- armed jihadist country with a president who has an apocalyptic world view and a hatred for Israel and the US may prove to be the ultimate test of international diplomacy and conflict resolution.

Iran is unlikely to develop its own nuclear strike capability for the next few years. However, through its illicit trade in nuclear materials and components coupled with a mature missile technology, it already represents a major problem to the peace and stability of the Middle East region in general and to Israel in particular. Its alliance with Syria and its links with Hezbollah in Lebanon and Hamas in Palestine represent an existential threat to Israel.

Israel, together with Pakistan and India, is a non-signatory of the treaty and operates outside its regime. It may be the sixth-most powerful nuclear weapons state, having up to 250 nuclear bombs or warheads. Development of such a capability might have started as early as 1965 at Dimona in Israel's Negev desert region. At that time, the US, Britain and Russia were working to address the threat of nuclear proliferation while Israel was preparing to defend itself.

By the end of 1969, US president Richard Nixon and Israeli president Golda Meir had reached a secret and highly sensitive understanding of Israel's position. Dr Meir pledged that the Israeli weapon would be used only in a national emergency as a measure of last resort. It was accepted that Israel would not join the treaty or declare its nuclear status but that the country would in general terms comply with the treaty in the same way as the declared weapons states, which finally signed the treaty in 1970.

A severe test of this agreement between Israel and the US came in October 1973. Egypt and Syria launched an attack on Israel on Yom Kippur on October 6. At an Israeli war cabinet meeting in the early hours of October 9, it is rumoured that defence minister Moshe Dayan requested Israeli's nuclear-armed Jericho missiles be placed on high alert.

Apparently this crisis was averted through the actions of Henry Kissinger.

The unique status of Israel, Pakistan and India with respect to the treaty, as well as the non- compliance of Iran and North Korea, show up the weaknesses of the non-proliferation regime. For the treaty to become a cornerstone of global security, both its universality and its compliance mechanisms must be strengthened.

For example, the 1995 declaration that the treaty would be maintained in force in perpetuity seems to lack a measure of authenticity. Indeed, the US, France, Britain, Russia and China all have national policies and military doctrines that conflict with those declarations.

As well, while Britain, France and Russia have ratified the Comprehensive Test Ban Treaty, the US Senate has rejected ratification and China now hides behind the US refusal. The US still has about 5200 nuclear warheads and Russia 3500.

Maintaining order and security in an increasingly dangerous world must be top priority for the United Nations. The treaty can help only if the disarmament agenda of the weapons states is clearly demonstrable and the compliance protocol - including sanctions - of the IAEA and the UN Security Council can be applied when required swiftly and without political fear or favour.

For more than 30 years tiny Israel's nuclear might has exercised a measure of deterrence and stability in one of the world's most turbulent locations. Both the US and the UN understand this geo- political situation and will not seek change until the treaty really begins to bite and universal nuclear disarmament becomes a practical reality.

Leslie Kemeny is the Australian foundation member of the International Nuclear Energy Academy.

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L.  Official Statements

Testimony to the U.S. House Subcommittee on Oversight and Investigations - U.S. Nonproliferation Strategy
Mark Haynes
CQ Congressional Testimony
(for personal use only)

Mr. Chairman and Members of the Subcommittee, my name is Mark Haynes and I'm Vice President of Energy Development for General Atomics (GA). Thank you for asking GA to testify about one part of the nexus of nuclear energy, non-proliferation and the need and opportunity to re-build a U.S.-owned nuclear industry.

By way of brief background, General Atomics is a high-end technology company with a primary focus on defense and energy applications. We are the originators and manufacturers of the Predator series of unmanned aircraft; we are also major participants in Navy ship electrification, fusion energy research, next generation nuclear reactor technology, defense lasers, radars, sensors, stealth materials, maglev transportation and many other advanced technology research and development activities.

Fifty-one years ago, GA was formed by leading scientists from Los Alamos laboratory and elsewhere to harness the atom for peaceful commercial purposes. Most relevant to today's hearing is the fact that GA's roots were planted squarely in the area of innovative nuclear reactor development with an emphasis on safety and non- proliferation. Our first product, the TRIGA reactor (there are over 64 deployed in the U.S. and abroad), is the most common test, research and isotope reactor throughout the world. Our second reactor type, the high temperature gas cooled reactor (HTGR), was not fully developed before the decline of the nuclear market in the 1970s and the subsequent reduction of investment in nuclear technology development in this country. More recently, GA's particular HTGR design and its close technological "cousins" are key elements of nuclear programs in many nations, including a joint non-proliferation development effort by the U.S. and Russia that I will describe in more detail later in my testimony. Its development is compatible with DOE initiatives in advanced reactor development, being a central feature of DOE's Next Generation Nuclear Plant (NGNP) and complementary to DOE's Global Nuclear Energy Partnership (GNEP).

It is very important for decision makers on nuclear energy and proliferation issues to be aware that the past and the future of nuclear energy are rich with technological options. The broad nuclear industry, including General Atomics, is in firm agreement that the near term deployment of the next generation of light water reactors in the U.S. and abroad is vitally important to reinvigorate nuclear energy. In addition, the ultimate deployment of fast reactors, as is contemplated in the President's Global Nuclear Energy Partnership (GNEP), will almost certainly be an essential element of nuclear fuel cycle management as nuclear energy becomes more and more relied upon around the world. Nuclear technology will and must continue to advance to meet what seems certain to be a huge worldwide demand for economic reactors that can provide electric power and other energy forms. Our belief is that this can and must be done in a manner that improves safety and nuclear waste management and that eases proliferation concerns.

General Atomics has been asked to testify today on a third type of reactor: the High Temperature Gas Cooled Reactor (HTGR) and its potential implications in the nonproliferation area.


For the past several years, there has been a worldwide effort directed toward the development of a next generation of nuclear reactor technology. These so called "Generation IV" reactors are meant to substantially improve the existing generation of reactors in several areas. The Gen IV "vision" is to develop and deploy reactors that are safer, more efficient, more proliferation resistant, more economical, more secure and produce less waste. High Temperature Gas Cooled Reactors (HTGRs) are generally agreed to be the nearest term Gen IV reactors that squarely meet each of these Gen IV objectives. Indeed, in last year's Energy Policy Act, Congress authorized the Department of Energy to build a HTGR at the Idaho National Laboratory to demonstrate this reactor technology and its ability to produce hydrogen and/or electric power. HTGRs have progressed beyond paper studies and paper designs to the construction and operation of test and evaluation devices. There are two test units currently in operation in Japan and China and in addition, there is an extensive base of historic HTGR experience in the U.S. and Germany. The past and present experience in these reactors has made clear their advantages. The state of the reactor core design has advanced to the point where no large development program is required for deployment and the costs and risks are well understood.

One primary type of HTGR is the Gas Turbine Modular Helium Reactor or GT-MHR. Without getting into unnecessary technical detail, suffice it to say that the GT-MHR, like other HTGRs such as the Pebble Bed reactor, is cooled with helium instead of water, is moderated by graphite, contains no metal in the core and uses extremely robust ceramiccoated fuel particles. These and other design features lead to a reactor design that is: Melt-down Proof Safe - Even with the complete loss of all coolant and emergency circulation, the reactor core cannot get hot enough to melt the fuel. Further, because HTGR reactor cores are relatively diffuse and have a large heat sink capability, reactor operators have days to understand and react to problems, not minutes or seconds.

Nearly 50% More Thermally Efficient Than Existing Reactors - In addition to improving the economics of the reactor, this particular characteristic leads directly to decreased cost of electricity, substantially decreased production of high level waste and less waste heat being dumped to the environment. Very Flexible to Site - Because of their increased efficiency, HTGRs do not necessarily need to be located near a substantial body of water for cooling purposes. Hence, they can likely be deployed in arid areas of the world that are in need of nuclear energy. Moreover, inherent operational safety achieved by HTGR designs permits much reduced buffer zones between reactor sites and other activities. Capable of Burning All Types of Nuclear Fuel - The particularly robust ceramic coated fuel form allows almost anything that is fissionable to be burned in an HTGR including uranium, plutonium, thorium, and nuclear fuel waste products. This same characteristic makes these reactors very effective burners of surplus weapons grade plutonium and capable of burning existing spent nuclear fuel inventories. They provide an important complementary technology to transmuting fast reactors (the Advanced Burner Test Reactor) proposed as part of GNEP Capable of Providing High Temperature Process Heat for Central Plant Scale Hydrogen Production - Hydrogen seems certain to play an increasingly important role in reducing our dependence on fossil fuels as soon as adequate and affordable hydrogen production capabilities are developed. The present U.S. market for stationary hydrogen consumption is over 11 million tons per year, and is growing at about 10% per year. Over 180 million tons of hydrogen per year would be required to fuel the domestic light transportation fleet. It is likely that only efficient high temperature process heat from nuclear power reactors will be capable of satisfying such annual demand with no greenhouse gas emissions. The present development path to nuclear production of hydrogen requires process heat temperatures that exceed all reactor concepts except the High Temperature Gas Reactor.


We believe there are four ways in which HTGRs are relevant to non- proliferation:

1. Superior non-proliferation characteristics: The presence of significant quantities of fissile material in all reactor cores (HTGR or otherwise) and in spent nuclear fuel makes these sources susceptible to use for proliferation purposes. Enrichment of nuclear fuels to establish core criticality has the same, perhaps higher susceptibility. The highly visible signatures and difficult and expensive recovery and refinement processes necessary for proliferant materials extraction from reactor cores, enrichment processes and spent nuclear fuels provide the most important means of verifying non-proliferation compliance.

HTGRs have superior characteristics because their robust ceramic- coated fuel form increases processing and extraction difficulty and because the core of HTGRs is inherently more diffuse in terms of concentration of nuclear materials. Consequently, significant quantities of HTGR fuel would be more difficult to pilfer and more difficult to use for nefarious purposes. In addition, because the HTGR is designed to be built entirely underground, it will have arguably superior security and non-proliferation benefits compared to large, above-ground installations.

2. Joint Development Project with Russia: For the past several years, DOE's NNSA and several key Russian nuclear institutes and laboratories have been working to develop the Gas Turbine Modular Helium Reactor (GT-MHR) for the purpose of destroying surplus Russian weapons plutonium. The goal of this unique, 50 / 50 cost- shared program with Russia is to construct one or more GT-MHR modules to replace the existing plutonium production reactor at Seversk. The GT-MHR reactor(s) will burn Russian surplus weapons plutonium and produce electric power and heat for that city.

This program is successful for several reasons: First, there is a strong feeling of mutual respect and shared goals between U.S. and Russian personnel. Second, the Russians are genuinely interested in the HTGR as a potential commercial reactor because of its efficiency, safety, security and versatility, and particularly because of its ability to support efficient hydrogen production. This interest has been expressed at the highest levels of the Russian government. Third, because of the Russian interest in the technology, they are sharing half of the costs and hence, have a high degree of incentive. Finally, the business model mandates delivery and approval of work products before payment is made.

A valuable opportunity for U.S. non-proliferation efforts and international nuclear cooperation exists as the Russian non- proliferation program proceeds simultaneously with other gas reactor efforts in the U.S.: the Next Generation Reactor Project at the Idaho National Lab and the High Temperature Test and Teaching Reactor (HT3R) at the University of Texas Permian Basin. A parallel and collaborative development path in the U.S. and Russia for this reactor provides early implementation of technology that contributes to non-proliferation, global energy security and revitalization of the U.S. nuclear power industry.

Almost needless to say, we are extremely pleased to see the recent news that the President wants to move forward with a civilian nuclear energy agreement with Russia. Our own experience with our Russian counterparts has been very productive and we believe has served to strengthen the ties between our nations and lessen nuclear proliferation concerns. There is every reason to suppose that other similar arrangements could expand these positive impacts and serve to mutually benefit our industrial bases. 3. The Importance of Rebuilding a U.S. owned Nuclear Technology and Supply Industry: The U.S. nuclear technology and supply industry, once the clear world leader, has suffered a steep decline in the past 30 years and has been substantially eclipsed by the industries of other countries who maintain and nourish their commitments to nuclear growth. In most cases, these foreign nuclear capabilities are either owned outright or substantially supported by their respective governments.

The loss of U.S.-owned capability and technology is almost certainly very damaging to U.S. non-proliferation interests, especially in the context of growing world interest in expanded nuclear power capabilities. When the U.S. government goes to the international negotiating table, it should have a menu of "carrots" in addition to "sticks" to encourage favorable outcomes. Lack of a diverse U.S. owned industry and the relative scarcity of attractive products will no doubt drive some negotiating parties to develop their nuclear relationships with other nations that have stronger nuclear industries and valuable products. A strong U.S. nuclear technology and supply industry working around the world provides added value by strengthening foreign relationships and helping establish a more favorable balance of trade.

If true Generation IV reactors are the way the world will ultimately go, then the U.S industry needs to be positioned to compete in this arena. As I mentioned before, HTGRs are the most near term, most flexible and likely the most economic of the next generation ("Generation IV") reactors. There seems to be little doubt that importers of nuclear capability will seek out the most cost-effective and safest reactors available. Therefore, exporters must offer efficient and safe systems that are as proliferation resistant and secure as possible. HTGRs look very good in all these measures and should be regarded as a prime competitive opportunity by our country.

4. Nuclear Waste Management: The proper and secure management of spent nuclear fuel has important non-proliferation implications particularly because of its plutonium content. In fact, the President's Global Nuclear Energy Partnership (GNEP) is, in large measure, directed at addressing the long-term proliferation implications of nuclear waste through recycling and the burning of the plutonium and other waste products in fastspectrum Advanced Burner Reactors. Because of the nuclear characteristics of the core and their extremely robust ceramic coated fuel, HTGRs have excellent and unique characteristics in terms of their ability to burn almost any kind of fissionable material, including plutonium and the other most long-lived and toxic components of nuclear waste. Further, once waste products are substantially or completely burned in an HTGR, the ceramic fuel cladding serves as a built in and very long-lived waste package. So, our belief is that HTGRs can and should play an important role in the GNEP because in addition to their ability to economically produce electric power, hydrogen and high quality process heat, they might also provide another waste management option in addition to the proposed Advanced Burner Reactor.

Improved technology, including the GT-MHR, is of course not a one- stop solution to the complex array of proliferation issues that exist today and will continue to persist for an indefinite period. But many nations around the world including China, India, Russia, Canada, France, South Africa, South Korea, Lithuania, and Estonia, are moving quickly in the direction of substantially increasing their nuclear energy generating capacity. There seems to be little doubt that nuclear power will grow substantially worldwide whether or not the U.S. participates. As this growth happens, it is vitally important that the technology choices are the right ones. Reactor concepts that provide the most proliferation resistant power system and fuel cycle will make substantial contributions to inhibiting proliferation and assuring non-proliferation compliance on the part of user nations. Rebuilding a U.S. industry that can provide such systems to other nations is one of the best ways to discourage proliferation and assure compliance with non-proliferation protocols.

We believe that the U.S. government should implement a development plan with U.S. industry to address a variety of safe and economically attractive nuclear technology options. In the face of a steep increase of worldwide nuclear generating capacity, to do otherwise would be penny wise and pound-foolish. Such a plan would help assure that the U.S. was the major "player" in world non-proliferation negotiations and would increase our ability to respond to future uncertainties.

Thank you again for asking General Atomics to testify on this subject.

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Testimony to the U.S. House Subcommittee on Oversight and Investigations - U.S. Nonproliferation Strategy
John F. Kotek
CQ Congressional Testimony
(for personal use only)

Good morning. I'd like to start by thanking the Chairman, the Ranking Member, and distinguished members of the Committee for the opportunity to appear before you today to share our Council's views on the nonproliferation and national security benefits of a revived U.S. nuclear industry.

As the Committee is well aware, nuclear power in the United States has been on the decline. As a result, U.S. firms that once dominated the manufacture of nuclear reactors have largely been sold to foreign companies. For example, we now have only two domestically-owned reactor vendors - General Electric and General Atomics - and even those companies would have to rely heavily on foreign sources of materials and components if they were to receive an order for a new plant.

While the U.S. debates its nuclear future (and that debate has turned markedly pro-nuclear), the rest of the world has recognized nuclear energy's benefits and has moved forward aggressively. We see this in France, Japan, Russia and China, and also in places like Indonesia and Brazil. Countries all across the world are looking to expand their use of nuclear energy. Then of course there are Iran and others whose real purposes would appear to be other than peaceful. So the United States can't flounder in indecision and inaction anymore. The world is going nuclear and we must too or fall sadly, irrevocably behind as the world enters the second nuclear era.

Some would say that all we have to do is start ordering plants again and the U.S. will be back. Becoming a nuclear energy consumer again is good, but that alone doesn't put us back in the game. It matters whether we are in the nuclear business. Nations that are engaged in the nuclear energy business:

--sit at the non-proliferation table;

--can choose to develop less proliferation-prone nuclear systems;

--have the technology to address global climate change;

--have the keys to combating global poverty; and

--hold the catalyst to advances in science and technology.

An excellent example of the nonproliferation benefits of a domestic nuclear industry can be seen in the joint U.S./Russian program to disposition highly enriched uranium from dismantled nuclear warheads. U.S. companies like BWXT and USEC have played a major role in getting this material into the nuclear fuel supply and into U.S. reactors, thus rendering it unusable in a nuclear weapon. Without a domestic nuclear industry, we would be less able to engage in this and other programs that are helping to meet our global nonproliferation goals. So the Council contends it is not enough for the U.S. to simply become a producer of electricity using plants designed, constructed, fueled and serviced by foreign suppliers. We need American companies competing in this vital arena.

Because the U.S. has been on the sidelines and its lead in nuclear design, manufacturing, supply and service has been severely eroded, we are free to move beyond existing technologies. Certainly, U.S. companies can and should compete in the market for providing large-scale reactors based on existing technology. But the U.S. is in a unique position to also capture the markets for tomorrow's nuclear technologies.

The proposed Global Nuclear Energy Partnership, or GNEP, could provide just the boost our industry needs in order to develop and market new, advanced, proliferation resistant nuclear energy technologies. For example, one exciting technological opportunity is in right-sized, exportable reactors that can be manufactured in the U.S. and exported to the developing world. This is not far fetched. Advanced manufacturing borrowed from other industries where the U.S. still holds global leadership will allow the shift from large systems that rely on economies of scale but which must be built on site. Factory production, with its inherent efficiencies, could make nuclear power economic for smaller applications in developing regions. This would feed into a distributed generation approach which fits countries lacking a mature grid and other infrastructure. And by engaging with international partners to establish a guaranteed fuel supply and return system, we can dramatically reduce proliferation risk by eliminating the need for small countries to establish enrichment and reprocessing capabilities.

The U.S. can do this and there are powerful reasons why it should. It is easy to forget that we live in a world where more than 11/2 billion people do not have access to electricity. Without electricity, necessities like health care, education, and jobs suffer. As we are all too aware, terrorism most often takes root in countries where life is hard and much of the country is blanketed in darkness every night. Of the countries who the State Department says sponsor terrorism, none rank among the top fifty on the UN's list of the most developed countries.

As the world's most powerful and prosperous nation, the U.S. has a unique business opportunity, a chance to solve one of our most vexing national security problems, and some would say a moral obligation to help address the energy challenges facing the developing world. Boosting global access to energy is good for our economy, good for national security, and good for the world. If we want to win the war on terrorism, we must help boost global prosperity, and that requires access to energy. Securing affordable energy supplies for our world while protecting our environment will require greater use of inexpensive, low-emission energy resources such as nuclear.

Restoring a robust domestic nuclear energy industry will also have a positive effect on employment and on our nation's economy. Our Council is presently conducting a study of these economic and employment impacts, but it is safe to say they run in the billions of dollars and tens of thousands of jobs. We plan to complete our study later this year and will be pleased to share the results with the Committee.

With trade in nuclear energy, however, comes the prospect of nuclear weapons proliferation. As the President stated in a speech at the National Defense University in 2004: "The world must create a safe, orderly system to field civilian nuclear plants without adding to the danger of weapons proliferation."

To ensure that the U.S. will influence and manage proliferation risks during the next expansion of nuclear energy around the world, it is imperative that the U.S. be the promoter, enabler, and the lead supplier of this growth. The American Council on Global Nuclear Competitiveness was formed to alert policymakers and the public of the need to restore U.S. leadership in nuclear energy. The President took a bold step toward restoring this leadership earlier this year with the announcement of GNEP. We support the President's vision for GNEP, which if properly implemented and accompanied by an American-led, transforming technology leap, could restore America's preeminence in the nuclear enterprise. If GNEP is structured with an eye toward enhancing U.S. economic competitiveness, American industry could thrive.

The Council has been concerned, however, about our industry's ability at present to participate fully in GNEP. So the Council is recruiting leadership from the business world - as well as from U.S. national laboratories and universities - to respond to the enormous opportunities that a resumption of U.S. nuclear energy leadership could create. U.S. manufacturing, technology, financial, and other interests should seize the opportunity and rally to ensure that the President's vision is realized. And indeed, we are finding an encouraging number of U.S. companies interested in getting into the nuclear business or growing their nuclear portfolios. By restoring a robust nuclear industry, America can protect its environmental, economic, and national security interests and it can also reclaim leadership of the global nuclear energy industry, an industry created through American ingenuity more than fifty years ago.

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Testimony to the U.S. House Subcommittee on Oversight and Investigations - U.S. Nonproliferation Strategy
Chairman Dana Rohrabacher
CQ Congressional Testimony
(for personal use only)

The Committee on International Relations Subcommittee on Oversight and Investigations is called to order.

Today the subcommittee meets to discuss the issue of nuclear proliferation and technologies associated with nuclear energy. We will focus on the status of the Cooperative Threat Reduction Program funded through the State Department, the Global Nuclear Energy Partnership, and related topics. We will also consider the question of the viability of high-temperature gas reactors versus sodium fast reactors as alternative sources of energy. This concept holds great potential for future energy sources for our domestic consumption and may have nonproliferation implications as well.

There could hardly be a more urgent subject than nuclear nonproliferation, specifically keeping weapons of mass destruction out of the hands of rogue entities. As President Bush famously expressed it: "we will not allow the world's worst leaders to threaten us with the world's worst weapons." We meet to explore the wisest course for keeping such dangerous technology away from bad actors.

The question of sharing nuclear technology speaks directly to the recent Administration agreement with India, an agreement I support. And this general subject speaks to some of the major hotspots in the world today North Korea, Iran, Russia, etc. How we should proceed with this technology given the various challenges in various countries is what our panel will help us explore.

Specifically, our witnesses will address: should the US extend nonproliferation and threat reduction assistance to a greater number of nations, particularly as the focus of these efforts has shifted from concerns about the loss of control of Russian weapons and materials to concerns about the possible terrorist acquisition of weapons of mass destruction? Can the US afford to shift resources out of programs in the former Soviet Union or should it, instead, add to its total level of funding to assist more areas?

On the subject of energy: after a lull of about thirty years, the US is again moving forward on nuclear energy technology with programs such as the Global Nuclear Energy Partnership (GNEP) and the Next Generation reactors. As we have seen with recent nuclear energy proposals with Russia, India, and other global partners. There is an opportunity to place these technologies in foreign countries as well as gather the benefits in the US. On the international front these technologies can reduce the threat of nuclear proliferation as well as reduce the world's dependence on fossil fuels while enhancing US stature and influence.

I am especially excited about the benefits of nuclear high temperature gas reactor technology. This technology holds the promise of multiple advances over present water based technologies. The design is inherently safe, even without the extensive control and safety technology required with present reactors. The reactor can use plutonium as a fuel and reduce the amount in the spent output by ninety-five percent. The reactor can also burn spent fuel from other reactors, thus reducing the load on repositories such as Yucca Mountain and others around the world.

The temperatures at which the reactor runs will lead to the production of hydrogen, which can be used in future hydrogen based applications. The Department of Energy is working on sodium cooled fast reactor technology, which also has the promise to reduce the stockpile of weapons grade nuclear material. After a long dry spell in us nuclear technology, it's good to see a couple of promising solutions on the horizon which will be of interest to the world.

Whether the nuclear industry is capable of both addressing domestic energy needs and assisting in nonproliferation concerns will be considered. I believe that, in this sense, energy policy is foreign policy.

Our first witness today is a familiar face. Frank Record has served as the Acting Assistant Secretary of State of the Bureau of International Security and Nonproliferation since May 2006. Prior to that, he served as a senior professional staff member on this Committee from 1990-2004, where he worked international organizations, trade and security related issues. Since then, he's been at the Department of State and is now in this critical capacity. Welcome. Our outside witnesses include John Kotek, Manager of Nuclear Programs at the Washington Policy & Analysis, Inc.; Mark Haynes, Vice President for Energy Development and Washington Operations, General Atomics and Leonard Spector, Deputy Director, Center for Nonproliferation Studies, Monterey Institute of International Studies. Distinguished experts, all.

The subcommittee will be interested in learning our panelists' insight into this subject. We look forward to hearing from you.

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Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps
Amir Abbas Fakhravar
U.S. Senate Committee on Homeland Security and Governmental Affairs Website
(for personal use only)

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Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps
Ilan Berman
U.S. Senate Committee on Homeland Security and Governmental Affairs Website
(for personal use only)

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Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps
Michael Ledeen
U.S. Senate Committee on Homeland Security and Governmental Affairs Website
(for personal use only)

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Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps
Ray Takehy
U.S. Senate Committee on Homeland Security and Governmental Affairs Website
(for personal use only)

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Testimony to the U.S. Senate Subcommittee on Federal Financial Management, Government Information, and International Security - Iran's Nuclear Impasse: Next Steps
Jim Walsh
U.S. Senate Committee on Homeland Security and Governmental Affairs Website
(for personal use only)

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M.  Iran - DPRK

Iranians present at N.K. missile launches: U.S.
The Korea Herald
(for personal use only)

Washington accused Iranian officials Thursday of being present at North Korea's latest missile launches, escalating U.S. suspicions of military cooperation between the Islamic state and Pyongyang.

Assistant Secretary of State for East Asian and Pacific Affairs Christopher Hill, the U.S. envoy to stalled six-nation talks on the crisis, told a congressional hearing it "is our understanding" that one or more Iranian officials were present at the July 5 launches

The missile tests prompted a U.N. Security Council resolution barring countries from trading missile-related technologies and equipment with North Korea.

But Hill also offered an olive branch to Pyongyang by stressing that Washington is not out to topple President Kim Jong-il and is still willing to maintain contact with his isolated regime.

Thursday's charges against Iran came amid a tense diplomatic tussle over how to convince Tehran to halt its uranium enrichment program, which Washington fears is being used to create nuclear weapons.

They sparked wide interest at the congressional hearing, coming against the backdrop of fast-escalating violence between Israel and Lebanon's Hezbollah militia, which Washington accuses Iran of helping foment.

Iran's presence in the North was raised by Republican Senator George Allen, who asked Hill whether it was not "a great concern" that Tehran has military ties with Pyongyang.

"That is correct," Hill replied. "Clearly, North Korea has interest in commercializing this technology," he said, referring to its missile development.

Allen pressed Hill about reports that Syria, Venezuela and Myanmar were also involved in arms-related trade with North Korea.

"We have certainly tracked that, and we know that they have been engaged in these types of talks," Hill said.

Iran and North Korea are the two remaining regimes - the other being Iraq - of the "axis of evil" denounced by U.S. President George W. Bush in 2002.

North Korea is believed to have sold missile technology in the past to Iran, according to diplomats, but whether there was further cooperation remains unclear.

Iran's presence during the launches was first reported in Japan's Sankei Shimbun daily but has not been confirmed by either Iran or the North.

Japan and South Korea have said they will try to use next week's Association of South East Asian Nations regional security forum in Malaysia to push for North Korea's return to six-nation talks aimed at dismantling its nuclear arms.

Hill said Thursday that Washington remained committed to the multiparty format.

"We are not seeking regime change. We are seeking a change in this regime's behavior," he told the U.S. Senate's Foreign Relations Committee.

The diplomat added however that "the United States, one way or the other, is not going to accept a North Korea with weapons of mass destruction."

Hill also said Chinese leaders need to review their dealings with the "reckless" North Korean regime. "They understand that this problem isn't going to go away with patience," Hill said of Chinese policymakers. North Korea's nuclear program and missile development "require us to be aggressive" and cooperate on ratcheting up "economic pressure."

Earlier in the day, Hill said he will not visit Pyongyang unless it shuts down its Yongbyon nuclear reactor, according to the Washington Times on Thursday.

"We would consider a trip if it would serve our interest to do so," Hill said.

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