Dædalus, Winter 2010
Expectations for a worldwide expansion of nuclear energy have raised fears that
states could potentially procure sensitive technologies used to manufacture nuclear
weapons or explosive devices.1 To cope with this problem, some have advocated that
enrichment and reprocessing facilities be constructed and operated under multilateral
arrangements. Such an approach is generally viewed as effective in ensuring safe
and reliable access to nuclear fuel and services at competitive market prices while
strengthening the nuclear nonproliferation regime by removing incentives for countries
to develop indigenous fuel cycle capabilities.
All proposals for multinational fuel cycle facilities have thus far originated from
“supplier states.” If multilateral fuel cycle arrangements have attracted only limited
interest from “consumer states,” it must be in part because the existing market
for enrichment services has been operating reliably. Otherwise, potential buyers
would have more actively explored new ideas for ensuring fuel supply. Clearly, something
more than market reliability is at issue here. If some consumer states fear that
fuel supply could be disrupted for purely political reasons, others seem to fear
that multilateral supply arrangements could serve as a pretext for depriving them
of their rights to construct and operate fuel cycle facilities domestically.
This essay posits that further improvement to the reliability of fuel supply is
best achieved by giving priority to fuel leasing contracts, coupled with long-term
generic export licenses, and last-resort multilateral fuel supply arrangements. These
arrangements are easier to implement in the short term, rather than much more complex
multinational enrichment facilities. For neighboring countries starting nuclear
power programs, setting up a fuel procurement consortium would provide safer and
better fuel supplies than would their individual participation in a multinational
Regarding the back-end of the fuel cycle, the development of multinational spent-fuel
storage and geological disposal facilities will be relegated to the distant horizon
due to the prevailing “Not In My Backyard” (NIMBY) syndrome. This is regrettable.
Yet, as long as impediments to multinational spent fuel management remain high,
it is most urgent to strengthen the International Atomic Energy Agency’s (IAEA)
verification authority and improve the likelihood of prompt and firm UN Security Council
action when a state is found to be in non-compliance with its IAEA safeguards
or Nuclear Non-Proliferation Treaty (NPT) obligations.
Any utility that has invested in nuclear power plants (NPPS) must have the highest
assurance that nuclear fuel will be supplied in a timely manner and at a fair market
price, to ensure that the plants operate without interruption. Almost all non-nuclear-weapons
states (NNWS) have thus far relied on the international nuclear fuel supply market
to fuel their electrical NPPS. This dependence on the market is true
even for countries that rely on nuclear energy for more than 30 percent of their
total electricity production.
There is not a single example in history when a state with a Comprehensive Safeguards
Agreement (CSA) in force was obliged to shut down its NPP due to the
denial of nuclear fuel shipments. That said, today’s fuel supply industry is an
oligopoly. Many electrical utilities have not forgotten that during the mid-1970s
there was a cartel of uranium suppliers and a single supplier of enrichment services
to Western states that, at one point in time, either did not accept new orders or
imposed highly restrictive commercial conditions. The situation is much improved
today, with well-established competition between suppliers.
Yet the fact that states with less than impeccable nonproliferation records could
argue that they need to produce low-enriched uranium (LEU) domestically has recently
raised new proliferation concerns. Indeed, once a country operates a uranium enrichment
facility (for example, based on the gas centrifuge process) and has either an indigenous
conversion plant or a stockpile of UF6, it is technically in a position to produce
high enriched uranium (HEU) suitable for nuclear weapons. HEU cannot be
produced in a commercial enrichment plant (that is, one normally limited to producing
uranium with less than 5 percent U-235) under IAEA safeguards without being detected.
However, a commercial enrichment plant could potentially be quickly reconfigured
to produce HEU if the state where the facility is operating withdraws from the
NPT. There is also a risk that a small, undeclared replicate of the enrichment
facility (based on the same domestic technology) could be operated clandestinely.
Both Libya and Iran have been able to work for some 20 years on the development
of centrifuge enrichment without detection by the IAEA,
prompting increased international awareness that this is more than a theoretical
It is therefore urgent to develop a concept that would guarantee reliable access
to fuel for nuclear power reactors in NNWS while providing maximum protection
against the risks of nuclear proliferation. In my view, the best way to do so would
be for supplier states to provide what I have described as long-term “generic export
licenses.”2 These licenses consist of a bilateral agreement between the consumer
and supplier states whereby the latter would provide a binding, long-term export
license for nuclear fuel as long as specified nonproliferation, safety, and security
conditions are met by the recipient state, including:
The recipient state has not issued a notice of withdrawal from the NPT.
The recipient state has concluded with the
IAEA and INFCIRC/66-type safeguards
agreement for the NPP under consideration. This agreement would normally be subsumed
under the CSA, but would be implemented should the recipient state withdraw from
the NPT, so that any fresh fuel or spent fuel remaining in the recipient state
would invariably be subjected to IAEA safeguards.3
The recipient state has a CSA and an Additional Protocol in force.
The IAEA Secretariat has drawn the conclusion, on an annual basis, that
there has been no diversion of nuclear material placed under safeguards and that
there are no undeclared nuclear material and activities in the recipient state.
The IAEA Secretariat has not raised questions or found inconsistencies concerning
the recipient state’s nuclear program that have not been resolved within a period
of 12 months. Moreover, the IAEA Secretariat has found no indication of,
in its judgment, potential proliferation concerns.
The NPP meets IAEA safety standards and an adequate level of physical
It would be the responsibility of the IAEA Director General
to confirm that these conditions are met.
Multilateral approaches to nuclear fuel supply guarantees include multinational
fuel procurement arrangements, multinational enrichment facilities, and the establishment
of a nuclear fuel reserve.
Multinational Fuel Procurement Arrangements. It is virtually impossible
for an electrical utility envisaging the construction or operation of its first
NPP to diversify its fuel supply sources. Therefore, it will likely have to store
on-site a strategic reserve of fabricated fuel assemblies proportionally larger
than what is necessary for an electrical utility operating a significant number of
NPPS. Alternatively, it may be useful for states that are constructing their first
NPPS and that are within the same region, such as those belonging to the Gulf
Cooperation Council (GCC), to establish a common multinational
fuel procurement company. Given its size, such a company would be in a better commercial
position to diversify its fuel supply sources. Moreover, multinational ownership
would allow the company to limit the potential disruption of fuel supply for political
reasons. Collaboration in fuel procurement would be more feasible and economic than
participation in multinational enrichment facilities.
Multinational Enrichment Facilities. Contrary to conventional wisdom, it
is not necessarily in the interest of a state or company with a small nuclear program
to become a minority shareholder in a multinational enrichment facility (MEF).
Doing so would make the shareholder almost exclusively dependent upon one supplier,
with little possibility of benefiting from the competition of multiple suppliers.
Becoming a partner in a MEF is like getting married. Those entering such a project
ought to know that getting divorced will be difficult, long, and costly.
through a multinational fuel procurement company, a new nuclear electrical company
would be in a better position, if deemed appropriate, to participate in a
MEF to cover a fraction of its enrichment needs.
Multilateral Fuel Supply Guarantees. A nuclear fuel reserve, either owned
by the IAEA or made available to it (the Russian model, for example), could provide
an ultimate fuel supply guarantee. Such is particularly true in cases in which a
state that meets well-defined nonproliferation, safety, and security criteria (as
verified by the IAEA) is denied fuel deliveries by a supplier for purely political
reasons and is unable to procure substitute fuel elsewhere on the market.
objective of the consumer state is to minimize the risk of fuel supply disruption
for purely political reasons, it will need to ensure that the supplier state provides
the necessary export license in a timely manner. Fulfilling this requirement is fundamental
regardless of whether the electrical utility is a shareholder of a
MEF in another country.
The “Russian Initiative to Establish a Reserve of Low Enriched Uranium (LEU) for
the Supply of LEU to IAEA for its Member States”4 is a good example of such
a multilateral fuel supply guarantee. The Russian conceptual mechanism for guaranteeing
consumer states access to a physical reserve of 120 tons of LEU in the form of
UF6 is remarkable.5 The UF6 will be stored in Russia at the Angarsk International
Uranium Enrichment Center (IUEC), under IAEA safeguards and free of storage,
maintenance, or other costs for the IAEA. This fuel reserve will be made available
to any NNWS member of the IAEA experiencing a disruption of
LEU supply that is understood to be for political reasons “unrelated to technical
or commercial considerations.”6
The supply mechanism is made up of two agreements, both of which need to be approved
by the IAEA Board of Governors. The first agreement, to be concluded between Russia
and the IAEA, would provide that:
Russia undertakes to make the requested amount of LEU (in the form of
UF6) available to the IAEA and to deliver the LEU to the IAEA for
subsequent supply to the member state that has made the request to the
Russia undertakes to issue without undue delay all necessary authorizations and
licenses for the transfer of the LEU to the IAEA and for export and supply
of the LEU to the consumer state.
The second agreement would be a supply agreement between the IAEA and the
consumer state, based on a “Model Supply Agreement” (MSA) that needs to be
approved by the IAEA Board of Governors. Each supply agreement between a
specific consumer state and the IAEA, based on the MSA, would also have to be
approved by the Board on a case-by-case basis. The MSA would define the
conditions under which the supply of LEU would take place. The
conditions Russia has mentioned are:
The consumer state would have to be a NNWS member of the IAEA;
It must have “an effective Agreement with the IAEA requiring the
application of safeguards on all its peaceful nuclear activities”;
The IAEA has “drawn a conclusion that all nuclear material had
been accounted for”;
“That there was no indication of diversion of declared nuclear material”;
“That there would not be any safeguards implementation issues concerning the
State under consideration by the IAEA Board of Governors”; and
The consumer state would have to pay Russia the actual market spot price for
LEU delivered, so that Russia would most likely “replenish” its physical reserve
of LEU available to the IAEA.
Russia makes the supply of LEU available under the above conditions without
requiring the consumer state “to forgo any rights, including rights to develop a
country’s national fuel cycle capabilities.”7
Based on the first two conditions, the consumer state must be a NNWS member of
the IAEA with a CSA in force. It therefore excludes nuclear-weapons states
and non-NPT states (India, Israel, North Korea, and Pakistan). What is not clear
is the meaning of an “effective” safeguards agreement. Does it only mean “in force,”
or does it mean something more? For example, could it mean that the IAEA is able
to implement fully all provisions of the CSA, including Subsidiary
Arrangements conforming to the Board’s requests (for example, Code 3.1 relating
to the early provision of design information)?
Condition 3 implies that the consumer state has an Additional Protocol in force
and that the Agency has drawn the so-called broader conclusion that there is no undeclared
nuclear material (and activities) in the state as a whole. This conclusion implies
that “no indication has been found by the Secretariat that, in its judgment, would
give rise to a possible proliferation concern.”8 It is worrying that a Director
General’s report of May 21, 2009, describing the Russian Initiative to IAEA
member states, no longer mentions this requirement as an “eligibility condition.”9
Did the Russian authorities change their position in the time between May 6 and
Condition 4 relates to “indication of diversion of declared nuclear material,”
raising the question of what constitutes an “indication” and how such an indication
would be brought to the attention of the Board before it approves the state-specific supply contract. For instance, would a cumulative quantity of Material Unaccounted
For (MUF) of more than one significant quantity constitute such an indication?
This type of information is usually only reported, if at all, in vague terms in
the Safeguards Implementation Report (SIR) without naming the state in
Condition 5 is perfectly relevant. It should however be made clear that if a consumer
state were to call upon the Russian/IAEA LEU fuel supply guarantee, the Board
would require the Director General to make a full report to the Board on all nonproliferation-relevant
information concerning that state, before approving the specific supply contract.
In addition to the six Russian conditions mentioned above, the
MSA should provide,
inter alia, that the LEU delivered is to be used exclusively for the
fabrication of fuel assemblies, which will be loaded in specific electrical
One of the most difficult issues will be how to determine if a disruption experienced
by a member state is exclusively for political reasons “unrelated to technical or
commercial considerations.” Who is to make such a judgment? The IAEA has no
knowledge of the commercial provisions contained in nuclear fuel contracts, and
it is not competent to make an authoritative judgment on whether these provisions
have been met by either party. Under the supply contract it is likely that such
a judgment can only be made by a three-judge arbitral tribunal, a procedure that
can take months, if not years.
Schematically, there are three main steps in the management of spent fuel:
1. Storage after unloading at the NPP, first in a pond and then, possibly,
in dry storage casks;
2. Storage at:
- a centralized facility where the spent fuel will be stored for a number of decades;
- a facility close to a plant where the spent fuel will be conditioned in a form
appropriate for final (geological) disposal, either as spent fuel in appropriate containers or after undergoing some mechanical treatment (for example, being
cut into pieces) and encapsulation; or
a combined reprocessing and MOX facility, which mainly produces high-level
vitrified waste (HLW), mixed U and Pu oxide (MOX) fuel elements, and some
3. Disposal of the HLW or encapsulated spent fuel in a geological formation.
With respect to safeguards, steps 1 and 2a are the easiest to implement; step 2c
is the most difficult.
For a country embarking on a new NPP program, there are, in the current environment,
no economic or technical incentives to opt for spent fuel reprocessing, at least
not during the first decade of operation. By far the easiest and least cost-intensive
solution is to store the spent fuel for as long as possible at the NPPs.
This is the solution that has been implemented by most nuclear electrical utilities
in the world, but it raises the concern of having spent fuel containing plutonium
in facilities scattered all over the world, which is vulnerable to potential theft,
diversion, or misuse.
As is well known, spent fuel assemblies contain plutonium that can be recovered
through reprocessing and, depending on its quality, used to manufacture nuclear
weapons or explosive devices. It is highly unlikely that spent fuel under IAEA
safeguards could be diverted in any significant quantity from a NPP without being
detected. However, once a state has accumulated spent fuel assemblies and mastered
the reprocessing technique, it could, as the Democratic People’s Republic of Korea
did in January 2003, withdraw from the NPT and recover the plutonium
for military purposes.
For a new nuclear electrical utility, the most attractive alternative to storing
spent fuel at the NPP would be to conclude an “all-inclusive” fuel contract with
the supplier state. Under the contract, the supplier would deliver fresh fuel assemblies
(that is, procure uranium, conversion, enrichment, and fabrication services) and
take back the spent fuel after an agreed-upon cooling and storage period at the
NPP. For the consumer state, an all-inclusive fuel contract would have the great
advantage of eliminating the problem of having to manage HLW domestically,
thereby avoiding possible local opposition.
In addition, as a matter of good practice and to guarantee to the supplier state
that the necessary funds will be available to cover future spent fuel management
costs, the following mechanisms would be implemented. For each kilowatt-hour (kWh)
produced by the NPP, a specified amount of money (often expressed in USD
mills per kWh, or, “millage”) would have to be paid monthly into a dedicated escrow
account. This payment would cover all transportation costs of the spent fuel to
the supplier state as well as all costs incurred for the management, storage, conditioning,
and final disposal of the spent fuel assemblies after their return to the supplier
state. The account would have to be managed by an appropriate international organization,
such as the European Bank for Reconstruction and Development (EBRD), the International
Monetary Fund (IMF), or possibly the IAEA.
If the supplier state is allowed by law to retain the spent fuel without having
to return any radioactive waste to the recipient state, then the full amount of
the corresponding millage would be released by the fund (with accrued interest)
to the supplier state, after it has reimported the spent fuel. In some cases, however,
the supplier may be legally obligated to include a contract provision whereby the
recipient state would have to take back vitrified HLW, or any other properly conditioned
form of HLW, in a quantity (and toxicity level) equivalent to that of the fission
products contained in the spent fuel. This concept has been implemented by both
France’s COGEMA and British Nuclear Fuels (BNFL) for customers of their
reprocessing facilities. The return of HLW would take place after an agreed-upon
period of storage in the supplier state. That period could either be very short
or take up to 25 years or more. In such a case, only an agreed-upon proportion of
the millage would be paid to the supplier state. The remaining would be repaid (with
accrued interest) to the recipient state upon return of the
It is clear that the proposed fuel contract will be most attractive to the recipient
state if it completely resolves that state’s spent fuel and HLW management problems.
Such would likely be the case only in a recipient state that has not yet accumulated
a large amount of spent fuel from NPPs. When a recipient state has already accumulated
spent fuel from one or more research reactors, the removal of spent fuel by the
supplier state (under agreed-upon terms) would considerably increase the attractiveness
of the supply agreement. By contrast, if the supplier state were to request that
the vitrified HLW be sent back to the recipient state, this attractiveness
would be reduced.
An important side benefit of this scheme is to guarantee that all costs related to
the back-end of the fuel cycle would be included from the start in the price of
electricity produced by the NPP and not postponed (possibly for a half-century or
more). Regrettably, today only Russia is in a position to offer such fully integrated
services.10 At any rate, it would be safe and good management practice for any new
consumer state to initiate an R&D program for the final disposal of spent fuel and
HLW as soon as a decision to construct a first NPP has been made.
In order not to accumulate quantities of spent fuel containing plutonium in each
and every country operating NPPs, would there be some merit in considering
regional multinational spent fuel storage facilities? In other words, would such
be economically advantageous?
be better from a nonproliferation and security point of view?
To answer these
questions, one should consider three subcases depending on whether the spent fuel
is a stand-alone facility;
is coupled with a spent fuel conditioning facility; or
is coupled with a spent fuel conditioning facility located at a potential multinational
spent fuel and HLW geological disposal site.
Today, the states that have accumulated the largest quantity of spent fuel and
HLW are the United States, France, Russia, Germany, Japan, South Korea, Taiwan-China,
Canada, the United Kingdom, and Sweden. Among these states, Russia, France, the
United Kingdom, and Japan are storing spent fuel at their national reprocessing
facilities in addition to storing spent fuel on-site at their NPPs. Sweden has
built a stand-alone centralized storage pond 30 meters below the ground surface
(the so-called CLAB, designed to provide storage capacity for 30 to 40 years before
final disposal) located near the Oskarshamn NPP. Germany has constructed
interim storage plants for spent fuel in large casks at Gorleben (lower Saxony)
that were eventually supposed to be disposed of on-site in a deep salt geological
repository, as well as at Ahaus (Nordhein-Westfalen). The German government has
suspended shipments of spent fuel casks to Gorleben and Ahaus due to intense public
opposition. If the Swedish exception can attest to the lack of attractiveness of
stand-alone centralized spent fuel storage facilities, then the construction of
a regional multinational storage facility should not be anticipated anytime soon,
notwithstanding its intrinsic nonproliferation and security merits.
Constructing a new reprocessing plant cannot be economically competitive unless
it has a large annual capacity (for example, between 800 and 1,000 tons of heavy
metals) and guaranteed contracts with customers to fill that capacity over a long
period of time (20 years or more). Reprocessing spent fuel should not take place
as long as the owner of the fuel is not in a position to recycle the resulting plutonium
as MOX fuel (UO2-PuO2) or otherwise sell it for recycling
by another electrical utility.
States with significant experience with light water reactors should consider the
merits of burning in their reactors excess civilian (weapons-grade) plutonium (such
as the plutonium stored in the United Kingdom) or plutonium originating from dismantled
nuclear warheads. In order for the resulting MOX fuel assemblies to be competitive
with low-enriched fuel elements, it is likely that the owner of the excess plutonium
will have to pay the electrical utility to accept and recycle it in its
NPPs. In other words, the excess plutonium takes on a negative economic value.11
In his opening remarks to the September 2003 General Conference of the IAEA,
Director General Mohamed ElBaradei noted that “considerable economic, safety, security
and non-proliferation advantages may accrue from international cooperation on the
construction and operation of international waste repositories.” Indeed, “for many
countries with small nuclear programmes for electricity generation or for research,
the financial and human resource investments required for research, construction
and operation of a geologic disposal facility are daunting.”
Yet most national laws (except in Russia) are presently based on the principle that
every country needs to store and dispose of its own nuclear waste within its national
borders. The “All In My Backyard” (AIMBY) principle, which is currently deemed
to be politically correct, is in fact another version of the NIMBY syndrome,
defined as outright opposition to the importation of foreign waste for long-term
storage and disposal in one’s own country. This widespread policy should be reconsidered
and modified as appropriate since it is counterproductive from an economic, safety,
and nonproliferation point of view.
Whether dealing with the front- or back-end of the nuclear fuel cycle, it is important
to identify the characteristics of a multinational facility that would make it most
valuable from a nonproliferation and security perspective. When dealing with sensitive
fuel cycle facilities, such as enrichment and reprocessing plants, a first necessary
condition is to have at least three partners (or shareholders), none of whom has
a majority stake. A joint venture between two neighboring states with the host country
holding a majority share would likely not add much benefit from a nonproliferation
point of view. However, for a spent fuel storage or disposal facility (as is the
case of shared NPPs) such a condition would not be necessary. In order not
to spread sensitive enrichment technologies, multinational facilities should be
established on the basis of a “black box” for shareholders who are not technology
As a prerequisite, the IAEA should also confirm that the six conditions mentioned
on pages 8 and 9 have been met by the host country and the relevant facility. Foreign
partners will have to address the sensitive issue of how to cope with cases in which
the host country is either found in non-compliance with its safeguards obligations
or withdraws from the NPT.
As exemplified by North Korea and Iran, one of the greatest difficulties in deterring
states from violating their nonproliferation undertakings is their hope that, for
geopolitical or economic reasons, at least one of the five veto-wielding members of
the UN Security Council will oppose the adoption of effective sanctions. It is therefore
urgent to strengthen the IAEA’s verification authority and improve the likelihood
of prompt and firm Security Council action when a state found in non-compliance with
its IAEA safeguards or NPT obligations does not fully cooperate
with the Agency in promptly resolving any outstanding issues.
To guarantee a timely Security Council reaction in cases of non-compliance, the
Security Council should adopt a generic (that is, not state-specific) resolution,
under Chapter VII of the UN Charter, based on the model contained in Annex I of
my recent Carnegie Paper on “Concrete Steps to Improve the Nonproliferation Regime.”12
Such a generic resolution would establish, independently of any specific case, that
when a state is found by the IAEA to be in non-compliance with its safeguards
agreement, the following steps would automatically take effect:
The Security Council would, upon request by the IAEA, automatically adopt a
specific resolution under Chapter VII requiring that state to grant the IAEA extended
access rights, set out in a model Temporary Complementary Protocol (TCP).13
If the non-compliant state does not promptly and fully implement the TCP
the Security Council would then adopt a second specific resolution requiring the
state to suspend immediately all sensitive nuclear fuel cycle-related activities.
In case of further refusal to comply, the Security Council would adopt a third
Chapter VII resolution calling on all states to suspend forthwith the supply of
any military equipment and cooperation with the non-compliant state as long as it
remains in non-compliance with Security Council and IAEA resolutions.
These concrete steps by the Security Council would provide a strong disincentive
for states to defy legally binding Security Council resolutions without triggering
sanctions that could impact the well-being of ordinary citizens.
Are there enrichment or reprocessing technology holders interested in establishing
a multinational facility in a NNWS that does not already operate such a plant?
My impression is that the true answer is no, unless there is a strong economic advantage
to do so. The German government has been encouraged by international interest in
its proposed Multilateral Enrichment Sanctuary Project.14 I doubt, however, that
a technology holder like Urenco would find much commercial interest to participate
in such a complex project,15 even if the company would not likely admit this in
public to avoid criticism from German authorities.
Concerning the back-end of the nuclear fuel cycle, notwithstanding the obvious economic,
security, and nonproliferation merits of establishing a multinational geological
spent fuel and HLW disposal facility, unfortunately it seems that no government
would likely support such a project on its territory (even if a perfect geological
formation exists) as long as it has to face the NIMBY syndrome. For the
reasons explained in this paper, multinational stand-alone spent fuel storage facilities
are also unlikely to be built anytime soon.
The only NNWS that appears to be interested in constructing a new spent fuel
reprocessing plant is South Korea. The problem is that, according to the “Joint
Declaration of South and North Korea on the Denuclearization of the Korean Peninsula,”
which entered into force on February 19, 1992, it was agreed that “South and North
Korea shall not possess nuclear reprocessing and uranium enrichment facilities,”
and that “South and North Korea shall not test, manufacture, produce, receive, possess,
store, deploy or use nuclear weapons.” Now that North Korea has twice tested nuclear
devices,16 and, in April 2009, expelled IAEA inspectors tasked to monitor and verify
the shutdown status of Yongbyon’s facilities, it is uncertain how long South Korea
will continue to feel bound by the 1992 Joint Declaration.
The issue is complicated by the fact that South Korea wishes to recover nuclear
material contained in spent fuel through a process called “pyroprocessing,” to create
new fuel that can be used in next generation fast reactors. Some U.S. officials support
the South Korean point of view that “pyroprocessing is not reprocessing because
it does not produce pure plutonium.”17 Under its current nuclear cooperation agreement
with the United States, which remains in force until 2014, South Korea cannot reprocess
spent fuel without first obtaining U.S. approval. To make the project more acceptable
internationally, South Korea has unofficially indicated its willingness to consider
the construction of the pyroprocessing plant on its territory under a multinational
arrangement. Whether such a gesture would satisfy potential proliferation concerns
remains to be seen.
The case for multinational enrichment plants may be different since more states
have indicated a potential interest to participate in such facilities and reserve
the right to construct one domestically in the future. Among them are Canada and
South Africa, the latter of which operated an enrichment facility before dismantling
it after joining the NPT.
Kazakhstan has taken a 10 percent participation in the Russian International Uranium
Enrichment Center (IUEC) at Angarsk. Ukraine and Armenia have indicated that they
intend to take similar shares.18 It should be stressed that the IUEC is not, as
its name suggests, an enrichment plant, but rather a LEU storage facility located
on the site of the Angarsk Electrolysis Chemical Complex (AECC), which operates
the enrichment plant. Participants in the IUEC (of which Russia will retain a
majority share) will have guaranteed access to the uranium capacity of the
AECC. It is not clear why a country like Armenia – which has only one NPP19 in operation
and no large uranium resources – is interested in participating in the IUEC, unless
the venture is part of a broader commercial and financial agreement with Russia.
The cases of Iran and Brazil also bear mentioning. There have been some indications
in the past that Iran would be willing to allow the participation of foreign partners
in its uranium enrichment facility at Natanz. While the rights and obligations of
foreign partners of a prospective multinational enrichment facility at Natanz have
never been discussed, it is likely that Iran would retain the right to develop,
produce, and install its own centrifuges in that facility without providing access
to the centrifuge manufacturing workshops. Iran might welcome foreign technology
holders to help in the development of more efficient centrifuges, but it is doubtful,
given present circumstances, that any of them would find a commercial interest in
doing so. Since the Natanz enrichment plant can in no way be commercially competitive
with other such facilities, there is little economic incentive for foreign entities
to become partners. The only possible motivation would be political, if such a move
can be seen as increasing the confidence that Iran’s nuclear program is being developed
exclusively for peaceful purposes.
Conversely, it is quite understandable that Iran has so far shown limited interest
in becoming a partner in the IUEC at Angarsk. Iran might fear that participating
in such a project would increase the international pressure for it to suspend or
even abandon its domestic enrichment program. Iran has also indirectly been a shareholder20
of the large EURODIF enrichment plant in France since the late 1970s but has never
been able to obtain LEU from that facility. This highlights that the
real issue at stake is the guarantee to obtain necessary export licenses not only
from the state where the enrichment takes place, but also from the country where
the fuel fabrication plant is located (if it is not the same).
In Brazil, the Navy and the Nuclear Energy Commission (CNEN) began developing
centrifuge enrichment technology in the early 1980s. They are operating small centrifuge
cascades at the Aramar Experimental Center, inaugurated in 1988. The facility is
presently under IAEA safeguards, but Agency inspectors have no access
inside the cascades.
More recently, Brazil has constructed the Resende Nuclear Fuel Facility, a centrifuge
enrichment plant managed by Nuclear Industries of Brazil (INB) and the Brazilian
Navy. The capacity of the facility will increase progressively and is expected,
by 2015, to cover the needs of the country’s two NPPS, Angra 1 and 2.
The enriched uranium that will be necessary to fuel Brazil’s nuclear propulsion
submarines will likely be produced in another enrichment facility.21
Brazil’s enrichment program has raised concerns that it could weaken the nonproliferation
regime, not least because Brazil is the only NNWS aside from Argentina that is
currently operating uranium enrichment facilities without having signed an Additional
Protocol. Reported difficulties experienced by IAEA inspectors in carrying
out inspections of Brazil’s enrichment facilities and the involvement of the Brazilian
military establishment in the country’s enrichment program only further add to concerns.
The February 2008 agreement between Argentina and Brazil to set up a bi-national
uranium enrichment holding will in no way allay proliferation concerns, whereas
ratifying the Additional Protocol certainly would. Ratification of the Additional
Protocol would also lift the remaining obstacle to the Nuclear Suppliers Group’s
(NSG) adoption of a policy requiring suppliers to authorize the transfer of
enrichment and reprocessing technologies only to states with an Additional Protocol
The existing commercial market for the supply of nuclear fuel is working well. Backup
mechanisms similar to the Russian Initiative or reliance on a physical reserve of
LEU owned by the IAEA would further improve fuel supply guarantees.
Fuel leasing contracts coupled with long-term generic export licenses should also
constitute a strong incentive for states that are starting to construct NPPs
for electricity production to rely on the international fuel market, rather than
on the expensive development of sensitive fuel cycle facilities domestically.
The most convincing evidence that the supply of fabricated fuel assemblies to operating
NPPs will not be disrupted for political reasons can be found in un Security Council
Resolution 1737 (December 27, 2006). Indeed, although Iran does not meet the conditions
required by Russia under its “Guaranteed Reserve of LEU Initiative” and is not
complying with IAEA and Security Council resolutions, Resolution 1737
provides that “all States shall take the necessary measures to prevent the supply
. . . of all items, material, equipment, goods and technology which could contribute
to Iran’s enrichment-related . . . activities . . . except the supply, sale or transfer
of . . . low enriched uranium . . . when it is incorporated in assembled nuclear
fuel elements for [light water] reactors.”
Establishing multinational spent fuel storage and disposal facilities remains a
valuable long-term objective. Truly multinational enrichment facilities located
in NNWS may also provide some nonproliferation and security benefits depending
on the circumstances, but the priority should be placed on the bilateral and multilateral
arrangements described above, which can be implemented rapidly.
Above all, it is urgent to strengthen the IAEA’s verification authority and improve
the likelihood of prompt and firm UN Security Council action when a state is found
to be in non-compliance with its IAEA safeguards or NPT obligations and does not
fully cooperate with the Agency in promptly resolving any outstanding issue. Rapid
implementation of the concrete steps and the fuel supply and spent fuel management
measures described in this essay is crucial for the future success of the