1. Iran to Limit Cooperation with Nuclear Inspectors
Thom Shanker & William J. Broad
New York Times
(for personal use only)
The government of Iran yesterday denounced as illegal a sanctions package approved unanimously over the weekend by the United Nations Security Council, and in retaliation announced that it would limit cooperation with the United Nationsï¿½ nuclear oversight agency.
President Mahmoud Ahmadinejad issued a defiant statement that ï¿½Iranï¿½s enrichment of uranium is a legal issue,ï¿½ maintaining that his nationï¿½s nuclear program was intended solely for energy production. In contrast, he said, the Security Councilï¿½s vote on Saturday imposing new sanctions on Iranian arms exports, the state-owned Bank Sepah and the Revolutionary Guard Corps ï¿½is not legal.ï¿½
ï¿½We are not after an atomic bomb because it is not useful and our religion does not allow us to have it,ï¿½ he said in statements posted on his Web site, www.president.ir/en/
A spokesman for the government, Gholamhossein Elham, said on state television that Iran would restrict its cooperation with the International Atomic Energy Agency in response to the sanctions vote. ï¿½After this illegal resolution was passed against Iran last night, it forced the government to act based on Parliamentï¿½s decision regarding the cooperation level with the agency and suspend parts of its activities with the agency,ï¿½ Mr. Elham said.
In the past, Iran has cut back on its cooperation with the inspectors of the International Atomic Energy Agency in retaliation for actions meant to press it into curbing its nuclear efforts. The cutbacks have made it hard to assess the nuclear progress of Iran, including its ability to make fuel for a nuclear bomb.
The cutback Iran announced yesterday means that it would no longer provide early information to the agency about the design of new facilities that are capable of making atomic fuel.
David Albright, a former United Nations weapons inspector and the president of the Institute for Science and International Security, a private group in Washington that tracks nuclear weapons, said the cooperation cutback could make it easier for Iran to build clandestine plants meant to enrich uranium for nuclear arms.
ï¿½To me, itï¿½s a serious retreat,ï¿½ he said in an interview. ï¿½They could build a backup centrifuge facility and not tell the I.A.E.A. It creates a situation where Iran could build a centrifuge facility in secret,ï¿½ in theory keeping it safe from attacks by the United States or Israel. But a European diplomat who closely follows the I.A.E.A.ï¿½s work said, ï¿½For now, itï¿½s not going to have much of an impact.ï¿½
ï¿½It sounds tough,ï¿½ he added, but in theory it will only make a difference in the future if Iran chooses to push ahead with the construction of clandestine fuel plants.
A number of world leaders called on Iran yesterday to return to talks and consider a package of incentives to end its uranium enrichment program. Javier Solana, the foreign policy chief of the European Union, said in Berlin that he would reach out to Ali Larijani, Iranï¿½s nuclear negotiator, ï¿½to see whether we can find a route to negotiations.ï¿½
Ban Ki-moon, the United Nations secretary general, appealed for renewed negotiations, and he urged Iran ï¿½to urgently take the necessary steps to restore the international communityï¿½s trust that its nuclear program is peaceful in nature.ï¿½
Iranï¿½s foreign minister, Manouchehr Mottaki, said in New York that his country would issue an official response to an offer by the United States and five other powers ï¿½ Britain, China, France, Germany and Russia ï¿½ to return to talks aimed at ending the stalemate over Iranï¿½s nuclear program. But he gave no indication that Iran would suspend its uranium enrichment, a prerequisite set by the other nations involved.
Tensions with Iran also increased yesterday over its seizure of 15 British military personnel in waters off Iraq. Senior Iranian officials said the government was considering charging them with illegally entering its waters. Prime Minister Tony Blair denied that the navy personnel had been in Iranian waters and said that Iran should be aware that Britain considered the seizure of the sailors and marines a very serious act.
A North Korean bank was threatening to derail a U.S.-North Korean financial deal that was crucial in getting the North to agree to disarm its nuclear program, a report said Tuesday.
The North has refused to return to the nuclear talks until about $25 million of its funds frozen at a blacklisted Macau lender are transferred to the Bank of China.
The fund transfer was supposed to happen last week, but the transaction has been delayed for reasons that haven't been fully explained.
On Tuesday, the International Herald Tribune reported that a British businessman, Colin McAskill, has threatened legal action if $7 million of the funds is moved to the Bank of China account. The money belongs to the Pyongyang-based Daedong Credit Bank, which McAskill has agreed to buy, the report said.
McAskill told The Associated Press that the report was accurate, but he declined to comment further on the record.
The $25 million was frozen in September 2005 after the U.S. accused the Macau lender, Banco Delta Asia, of helping North Korean launder money and handle counterfeit U.S. currency.
The move enraged the North Koreans, who boycotted the nuclear talks for more than a year. They recently returned to the discussions after the U.S. promised it would settle the banking issue. The funds were to be transferred to the Bank of China account, which would be used for humanitarian purposes.
But McAskill said the $7 million that belongs to the majority-owned Daedong Credit Bank was made from legitimate joint ventures between foreign companies and North Korea, the report said. McAskill was hoping to discuss the matter with Macau authorities, who took control of the bank, it said.
``Daedong's money must be separated from the political arena,'' he was quoted as saying. ``We wish to leave the money in Macau until we can make arrangements to transfer it to one of our normal correspondent banks.''
The U.S. has decided to cut off Banco Delta Asia from the American financial system. Once this becomes effective in mid April, it will be difficult for the Macau lender to move money out of U.S. currency accounts because most U.S. dollar transfers are processed in the U.S., the report said.
McAskill said Daedong Credit Bank wanted to beat the deadline by getting permission to move its money to a temporary account in another Macau bank, the report said.
1. Officials Hold Talks on U.S. ï¿½ India Nuclear Pacts
(for personal use only)
India and the US yesterday held talks on finalising the bilateral civil nuclear agreement with New Delhi insisting that full civilian nuclear cooperation, as promised in the July 18, 2005 deal, included access to reprocessing technologies.
The crucial talks, aimed at finalising a large part of the text of the 123 agreement, named after Section 123 of the Atomic Energy Act, will continue over at least the next two days.
The US team for the talks included Richard Stratford, director of Nuclear Energy, Safety and Security in the State Department, and other senior officials.
The Indian delegation included Gayatri Kumar, joint secretary (Americas) in the external affairs ministry, her predecessor S Jaishankar, who is now ambassador to Singapore and had led nuclear talks last year, and Raminder Singh Jassal, deputy chief of the Indian mission in Washington.
The 123 agreement, which will be the sole legal document that will govern the terms of civil nuclear commerce between India and the US, will be crucial in influencing the 45-nation Nuclear Suppliers Group to amend its guidelines in favour of global nuclear trade with India.
India is trying hard to ensure that the controversial portions of the Hyde Act passed last year like the ban on nuclear testing are not included in the 123 agreement.
The US legislation excludes the sale of equipment related to enrichment, reprocessing and heavy water production to India. India will make a strong pitch for being granted prior consent to re-process spent fuel that the US legislation denies.
A spokesman for the United States' embassy in New Delhi said the talks, involving delicate issues such as so-called dual use technology which can be used for civil and military aims, would continue through the week.
"They had an initial meeting on Sunday and are continuing talks today. Both sides are hoping to make progress on key issues," he said.
Differences between India and the United States persist over the re-processing of spent fuel and the assurance of a constant supply of atomic fuel even in the event New Delhi tests nuclear weapons.
Last week, the chief of India's Atomic Energy Commission and top nuclear scientist, Anil Kakodkar warned that India wanted "reprocessing rights up-front."
"Reprocessing is a non-negotiable right," he was quoted as saying by the Press Trust of India news agency. Another issue raised by Kakodkar was nuclear weapons test limits which India last conducted in May 1998.
The United States had signed, but did not ratify in Congress, a comprehensive test ban treaty. India has not signed the treaty. "India had declared a unilateral moratorium on nuclear tests, but that cannot become a bilateral legality," he added.
The civilian nuclear energy deal is the centrepiece of India's new relationship with Washington after decades of Cold War tensions and is part of the energy import-dependent nation's bid to increase its fuel sources to sustain its booming economy.
C U Bhaskar of the Institute for Defence Studies and Analysis said the importance of the deal was two-fold.
"One, it aims to bring India into the loop of global nuclear commerce after decades of isolation and second the deal will have a vital impact on India's efforts to move away from dependency on hydro-carbons," Bhaskar said.
1. Nuclear Energy Renaissance Ignites Uranium Boom
(for personal use only)
Uranium prices are closing in on $100 a pound -- a 10-fold increase in five years -- and prices could climb sharply higher yet as more governments embrace atomic energy despite dwindling supplies of yellow cake to power the reactors.
The spot price for uranium jumped $4 to $95 a pound (lb), according to weekly report from UxC, a leading publisher of uranium prices, a big leap from $60 in December and from around $9.50 in late 2002.
Years of under-investment in uranium mining caused by moribund prices and the anti-nuclear lobby has left the world short of the material used to fuel nuclear reactors.
"The environment is primed for a nuclear renaissance. People are focusing so much on supply-side issues that they are forgetting that this is a demand story and the big expansion of new-build programmes hasn't kicked off yet," Joel Crane, an analyst at Deutsche Bank in Melbourne, said.
With concerns of another Chernobyl-like radioactive leak and worries that enriched uranium will get into the hands of those keener to make weapons than fuel, there is still considerable opposition to nuclear energy.
But governments in Europe, United States, Russia and China and even environmental groups, including Greenspirit, are warming up to nuclear power because it is viewed as producing less greenhouse gases than fossil fuels.
Now industry is scrambling to meet the renewed demand, which is putting pressure on prices. Some see uranium surging another $50 a lb, and well above the 1970s high, when nuclear energy was last in vogue.
"In inflation-adjusted terms, the 1970s peak in uranium prices was at $120 a lb. Given the weaker dollar, strong demand and limited supply, we could see it peak at over $150," said Paul Carter, managing director of Argonaut Securities in Perth, Western Australia.
"Demand for the physical is driving the prices, but weakness in the dollar means people are willing to pay a little more in other currencies."
There are 435 nuclear reactors operating around the world, with a further 28 reactors under construction, 64 planned, and another 158 proposed. India, with seven new plants, and China, with five, are leading the charge into nuclear energy.
With prices moving higher, developers of reactors coming on stream in the next five to seven are looking to lock in prices right now for their "first fills" of uranium.
"All these first fills need to happen, and other reactors are running closer to capacity -- nearer 90 percent from maybe 70 percent -- which means increased fuel burn," Carter said.
A new reactor takes a first fill of uranium of around 600 tonnes, then consumes 200 tonnes per year.
In 2006, uranium production was an estimated 103 million lbs, or 46,720 tonnes, while consumption was 177,000 lbs, or just over 80,000 tonnes.
This year, uranium demand is expected at about 183 million lbs and production is expected at about 117 million, said Alice Wong, a vice president at Cameco.
"Since 1985 uranium consumption has exceeded mine production and you can see it increasing by wider margins. So you're looking at 20 years, or better, of consumption exceeding mine production," Wong said.
That difference has been met by utility stockpiles and from scrapped atomic weapons, but a treaty between Russia and the United States to convert weapons-grade material to low-enriched reactor fuel expires in six years.
"The big deal between Russia and the U.S. ends in 2013 and it is not quite clear what is going to happen after that," Steve Kidd, a director of World Nuclear Association in London, said.
Kidd was relatively sanguine about pressure on fuel supplies for reactors: "The market will be supplied one way or another but the question is at what price."
But Australian and New Zealand Bank analyst Andrew Harrington believes the falling supply from decommissioned weapons is big issue.
"The reduction in secondary supply will only get worse and the shortfall is unlikely to be met by capacity expansions," he said.
The timing for when the market will come back into balance will depend much on Australia and whether they will allow the opening of new mines.
Australia holds 40 percent of the world's uranium reserves and exports are allowed from parts of the country but not from mineral-rich Western Australia or Queensland under a policy that has its roots in the anti-nuclear movement of the 1970s.
New supplies could come Africa, led by Namibia, and in Canada, where Cameco's Cigar Lake project was expected to be in full production in 2012 producing 18 million lb of uranium annually. But it now faces delays from flooding.
"The timetable for the Cigar Lake start-up is little optimistic. It's pretty much underwater and it may be difficult to get it up by 2010." Argonaut's Carter said.
It takes some 10 to years or more to bring a mine into production, so there are few signs tightness in the market will ease anytime soon.
1. UN Pushes Ahead with Multinational Enrichment Plan To Prevent Nuclear Proliferation
(for personal use only)
Pushing ahead with efforts to set up a multinational framework for uranium enrichment to prevent nuclear weapons proliferation and the possibility of their falling into the hands of terrorists, the United Nations atomic watchdog agency is exploring with Russia the possible establishment of an international enrichment centre in Siberia.
International Atomic Energy Agency IAEA Deputy Director General Yury Sokolov led the UN side in talks this week with Russian officials at the Angarsk Electrolysis Chemical Complex, a manufacturer of low-enriched uranium, which Russia is proposing should be the site of an international centre.
Low enriched uranium is the fuel for nuclear power plants, but enriched to a higher degree it can be used to make nuclear weapons.
Mr. Sokolov told a press conference that the Agencyï¿½s main point of concern about proposals discussed with Russia was provision of a mechanism to ensure that States which have been isolated for political reasons continue to receive nuclear fuel. Russian officials told the press conference that the talks had made positive progress.
Russia is currently in negotiations with Kazakhstan to establish a joint enrichment facility at the Angarsk complex, which is north of Irkutsk in south eastern Siberia.
Both IAEA Director-General Mohammed ElBaradei and Russian President Vladimir Putin have proposed putting enrichment under multinational control to reduce proliferation risks. The system would provide assurance of supply to States considering developing nuclear power and avoid the need for them to build their own nuclear fuel production capability.
The so-called front end of the nuclear fuel cycle, when fuel is enriched, as well as the back end, when spent fuel is reprocessed, provide points that pose proliferation risks because material can be potentially diverted and used to produce weapons.
A cornerstone of Mr. ElBaradeiï¿½s proposal is a fuel bank of last resort that would offer users of the system the insurance of guaranteed delivery if their regular supplies were interrupted.
ï¿½The longer we delay in placing sensitive nuclear operations under multinational control, the more new countries will seek to build such facilities,ï¿½ he said in a speech last year, calling for a unified international approach ï¿½so that no one country would have exclusive control over the most sensitive parts of the fuel cycle.ï¿½
In September, the Nuclear Threat Initiative donated $50 million provided by United States billionaire Warren Buffet to the proposed fuel bank on condition that the contribution is matched by an amount of $100 million.
The proposals for international uranium enrichment centres come amid a revival of interest in nuclear power as a means of generating electricity and fears about the proliferation of nuclear weapons. Mr. ElBaradei is to present a paper about supply assurance to the next meeting of the IAEAï¿½s Board of Governors in June.
DISCLAIMER: Nuclear News is presented for informational purposes only. Readers are encouraged to visit the websites from which the source material originates. Views presented in any given article are those of the individual author or source and not of RANSAC. RANSAC takes no responsibility for the accuracy of information contained in any article presented in Nuclear News.