MOST IMPORTANT ARTICLES AND DOCUMENTS:
http://putinfreakshow.blogspot.com/2006/12/most-important-articles-and-documents.html
HEU-LEU AGREEMENT MAIN LINKS:
http://www.nti.org/db/nisprofs/russia/fulltext/heudeal/heufull.htm
http://www.world-nuclear.org/trade_issues/tbriefings/heu/index.htm
http://en.rian.ru/russia/20060422/46788042.html
http://en.rian.ru/russia/20060407/45436007.html
US-Russia HEU Agreement: INTRO
The major political changes which took place in the former Soviet Union after the mid 1980s, culminating in the break-up of the country into its constituent republics in 1991, led to the end of the nuclear arms build up which had taken place since the early 1950s.
Nuclear disarmament treaties entered into by the USA and Russia since the late 1980s have resulted in considerable quantities of high enriched uranium (HEU) becoming surplus to military requirements.
Much of this material is suitable for conversion to civilian use as fuel for existing commercial nuclear reactors, by blending it with other uranium to produce low enriched uranium (LEU), suitable for fabrication into ordinary nuclear fuel.
HEU used in this way is a source of enrichment and conversion services, as well as of natural uranium equivalent.
The major impact to date on the commercial nuclear fuel market has come from an agreement between the US and Russian governments for the delivery of LEU derived from 500 tonnes of ex-military Russian HEU to the USA for use in nuclear fuel.
(See table): Click on it for an enlarged view.
Note: Deliveries actually made during 1997 and 1998 were 13.4 tonnes HEU (4020 tU) and 14.5 tonnes HEU (4350 tU) respectively. However, the balance of the 1997 quantity was delivered in early 1998. The balance of the 1998 quantity was expected to be delivered in 1999 (in addition to the 1999 quantity).
http://www.world-nuclear.org/trade_issues/tbriefings/heu/index.htm
How Yeltsin modified the disastrous HEU Agreement into LEU:
RUSSIAN-U.S. HEU AGREEMENT
The phrases underlined have been canceled!
The Governments of United States of America and the Russian Federation, hereafter referred to as the Parties,
Desiring to arrange the safe and prompt disposition for peaceful purposes of highly enriched uranium resulting from (the dismantlement of nuclear weapons in Russia bearing in mind existing agreements in the area of armscontrol and disarmament), the reduction of nuclear weapons in accordance with existing agreements in the area of arms control and disarmament, […]
Have agreed as follows:
ARTICLE 1: PURPOSE
The Parties shall cooperate in order to achieve the following objectives:
1) The conversion as soon as practicable of highly enriched uranium (HEU) (resulting from dismantlement of nuclearweapons in Russia) extracted from nuclear weapons (resulting from the reduction of nuclear weapons pursuant to arms control agreements and other commitments of the parties which is currently estimated at approximately 500 metric tons in the Russian Federation, having an average assay of 90 percent or greater of the uranium isotope 235 into low enriched uranium (LEU) for use as fuel in commercial nuclear reactors.
For purposes of this Agreement, LEU shall mean uranium enriched to less than 20 percent in the isotope 235; and
2) The technology developed in the Russian Federation for conversion of HEU resulting from the reduction of nuclear weapons in the Russian Federation may be used for conversion of United States HEU in the United States of America; […]
http://66.249.93.104/search?q=cache:4fFyG_I-LSMJ:www.nti.org/db/nisprofs/russia/fulltext/heudeal/heufull.htm+HEU+AGREEMENT&hl=en&gl=ro&ct=clnk&cd=2
http://66.249.93.104/search?q=cache:4fFyG_I-LSMJ:www.nti.org/db/nisprofs/russia/fulltext/heudeal/heufull.htm+HEU+AGREEMENT&hl=en&gl=ro&ct=clnk&cd=2
MY COMMENTS:
While not longer than two weeks ago Putin was completely disappointed on how the negotiations with the US on a WTO seat for Russia work:
Russia's WTO accession could be put off indefinitely - MP
http://en.rian.ru/russia/20060411/45553283.html
suddenly RIA Novosti announces that Russia will join WTO this year:
Russia will join WTO in 2006 - Kudrin
11:21 22/ 04/ 2006
http://en.rian.ru/russia/20060422/46788042.html
What changed Bush’s mind so quickly? Or…has his mind changed at all?
RIA Novosti published recently two very interesting articles on the US-Russia High-Low Enriched Uranium agreement.
Although, because of the complications of this agreement and because of the blanks in the information available, it’s not easy at all to figure out what is going on (probably it’s the toughest political case whose mystery I’m striving to solve), I’ve tried to figure what this agreement is all about and which is the connection with the WTO and, naturally, with Iran?
From many articles that I have read and that are posted at the link below,
this is what I understood:
You, Bush, give me a WTO seat for Russia and cancel the restrictions on the Russian uranium deliveries to Europe (the Socialist Europe interesting for me, Putin).
You, Bush, allow me to make nukes in Iran and to commercialize uranium in the World countries that are under my socialist umbrella, without hindering the process of uranium delivery by imposing anti-dumping restrictions, invoking the Soviet “danger” of uranium commercialization or imposing Russian uranium exports restrictions of any other nature and I, Putin, engage to deliver to the US the 500 metric tonnes of HEU (High Enriched Uranium) promised by my predecessors.
SEE TABLE ABOVE.
(see below the HEU-LEU agreement for which the anti-dumping restrictions imposed by the US a long time ago incorrectly make exception and don’t apply!)).
“The anti-dumping procedure that is being used in the United States and several European countries does not spread to the 1993 HEU-LEU (highly enriched uranium - low enriched uranium) agreement signed for 20 years”.
http://en.rian.ru/analysis/20060414/46414399.html
Putin demands the US to stop hindering the Russian uranium exports to any country in the World, while he promises uranium deliveries to the US + deliveries of Russian-made uranium enrichment centrifuge technologies, the modern uranium enrichment technology scheduled to replace the outdated diffusion uranium enrichment technology used by the US by now:
“At present the gaseous diffusion process accounts for about 40% of world enrichment capacity. However, though they have proved durable and reliable, most gaseous diffusion plants are now nearing the end of their design life and the focus is on centrifuge enrichment technology which seems likely to replace them”.
http://66.249.93.104/search?q=cache:788flJYd3OUJ:www.uic.com.au/nip33.htm+centrifuge+uranium+diffusion+better&hl=en&gl=ro&ct=clnk&cd=1
http://www.uic.com.au/nip33.htm
If this is the case, then in my humble opinion Russia makes far too many concessions and the US is again in advantage.
While uranium is a finite ore, which the next generations will cry for, quite as our generation now cries for oil, while gas centrifuge uranium enrichment technologies is the precious fruit of decades of work performed by Russian scientists, whose license now Putin is willing to deliver to the US for free, Russia will EVENTUALLY get in return just a paper called WTO seat, if ever, and the right to arm Europe with its nukes again (now it would be for the first time for Russia to make room for its rule in the Western European continent) and to play again the master role in its socialist half of Europe that, if the things will work as planned, will go in Russia’s pocket according to the Bush SR-Putin negotiations held in May 2005).
Possibly the centrifuge technologies that Putin is willing to deliver to the US are not quite the last generation, yet this sellout of military high technologies are a big loss of know-how for Russia (such as in the Soyuz case delivered to the US, set being replaced by Clipper in Russia).
Most likely Russia will not deliver neither to the US and nor to any other country the last generation of uranium enrichment centrifuges, yet it will deliver the centrifuge technology base, which, if the US manages to sufficiently improve, it could overtake Russia in the uranium and space field –see Soyuz deal called Iran non-proliferation act (posted on this website at the section “Most Important Articles and Documents”).
The US is already ahead with the orbital interceptors spatial technology that Russia cannot even dream purchasing.
Therefore, these concessions of know-how that Putin is willing to make might eventually end up threatening the very national security of Russia, if the US is smart enough to make the best of it.
Putin practically agreed to share half/half the World reserves with the US (these including Russia’s and the ex-USSR states’ natural reserves (whether they are oil, gas, titanium or uranium), all for the sake of strengthening Russia’s political position.
In a word:
World balance of natural reserves in exchange of political World balance.
I understand well enough the magnitude of the mistakes and sellouts made by Putin’s predecessors, the reckless or literally treacherous treaties they have signed with the US, that, despite being considerably improved by Yeltsin, are still a disaster for Russia in this very moment.
I understand that it’s not easy for Putin now to wash his hands, simply pretending that they have never been signed.
Yet IMO Putin could take a tougher stand and negotiate from a more categorical position.
After all it’s not him who signed all those disastrous treaties and therefore there must be some room for being bolder.
He could try to turn the page and start a new policy line, roughening the negotiation terms.
Probably the US’ financial-economic network (mainly composed of banks-see World Bank, IMF and trade organizations-see WTO) which are able to destroy what Putin has built by now, doesn’t allow him to move freely – (Khodorkovsky who bankrupted Russia on Yeltsin time is the best example). Also, for a strong European construction, a WTO seat could be mandatory.
Nobody knows the Russian natural reserves map, this being a state secret, but we clearly know relying just on common sense that those reserves are a FINITE entity.
Taking into account this simple observation, if Putin will continue in this manner, indefinitely “negotiating” the USSR’s natural reserves, the next generations might stigmatize him as the “King Loser”.
I wonder if it’s not too late already for Putin to get away without being blamed by the next generations of Russians for his botch policy line.
In the absence of key information needed to perform a correct analysis, especially on the situation of Russia’s natural reserves, I can just state that only Putin and the people in his entourage can appreciate if this ”World balance of natural reserves in exchange of political World balance” deal is indeed worthwhile.
Realistically speaking, for now Russia has no WTO seat and I doubt that the prospects of getting one are as optimistic as RIA Novosti wants to make us believe, while, from the US’ point of view, Iran’s fate (which, since the Islamic Revolution in 1979 has been a Russian protectorate) might still be in political and even military limbo.
On the other hand, without a WTO seat, Russia will continue to be an outsider and might be an unable to cope with the “globalization” realities of these times.
I assume that Putin intends to enter both the European nuclear market and the European military, while calming down the Bush’s damaging leverage that the US might possess and therefore use against Russia, by continuing to deliver nuclear fuel to the US, but at the same time demanding the lift of the anti-dumping restrictions that extend on the Western Europe as well and which now, unlike in the ’90-s, is directly in Putin’s commercial and military interest.
Clear is that Putin must deliver to the US on the basis of the agreement announced by Bush SR in 1992 and signed by Clinton and Yeltsin in 1993, 500 HIGH ENRICHED URANIUM derived from nukes, which is a HUGE amount of uranium, considering its extremely high concentration of 90 percent uranium isotope 235.
The modifications of the agreement (introduced by Yeltsin(!)) are mainly that Russia refuses to abandon its nuclear military program and that it refuses to deliver the HEA in its original form, but only converting it into LEU, which shall mean uranium enriched to less than 20 percent in the isotope 235 (using the technology developed in the Russian Federation for conversion of HEU into LEU at facilities in the Russian Federation only, if possible).
Hopefully I will update this analysis with new information on 23 May, when the next hearing on the anti-dumping measures imposed on Russia will take place in Washington.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
For realizing the magnitude of Gorbachev’s sellout of the USSR and also the connection with the Chernobyl nuclear plant explosion scenario, which was designed as a pretext for the USSR disarmament and consequently for stuffing the US *FOR FREE* with 500 metric tonnes of SUPER HIGH ENRICHED URANIUM 90% concentration obtained only from nuclear weapons (while the concentration of uranium ore is just about 4.4 %(!)),
SEE BELOW THE TEXT OF THE RUSSIAN-U.S. HEU AGREEMENT,
and the modifications introduced by Yeltsin to the tentative agreement, announced by US President George Bush in August 1992 :
(see also a brief history of the Chernobyl “accident”, which took place on April 1986, while on October 1986 Reagan and Gorbachev were already discussing the IBM treaty which was signed no later than 1987).
See tables with the schedule of Russian uranium deliveries to the US, as well as much more data on the topic, at the link below:
http://groups.yahoo.com/group/VladimirPutinRoundTable/message/369
http://groups.yahoo.com/group/VladimirPutinRoundTable/message/370
~Vera
See below the main full-length articles on the topic:
Also for a better reading please go to the links below:
http://groups.yahoo.com/group/VladimirPutinRoundTable/message/369
http://groups.yahoo.com/group/VladimirPutinRoundTable/message/370
****************************
Russia: Full-Text Documents
This is the text of the agreement, signed in Washington, DC on 18 February 1993, regarding the disposition of highly enriched uranium from Russian nuclear warheads. Changes to the text of the tentative agreement, announced by US President George Bush in August 1992, are denoted by italic text (additions) and strikethrough text (deletions).
Russian Minister of Atomic Energy Viktor Mikhailov and Major Gen. William Burns (Ret.), head of the U.S. Safe and Secure Dismantlement Delegation, signed the agreement weeks after US President Bill Clinton took office.
RUSSIAN-U.S. HEU AGREEMENT
It should be noted that subsequent agreements have altered and/or expanded upon this agreement, changing some of the terms set out below. The text, and its formatting, were taken from the 1 March 1993 issue of NuclearFuel, pp. 3-4. The text of President Bush's statement announcing the deal can be found in the 2 Sept. 1992 special issue of Nuclear Fuel, pp. 2-3.
RUSSIAN-U.S. HEU AGREEMENT
The Governments of United States of America and the Russian Federation, hereafter referred to as the Parties,
Desiring to arrange the safe and prompt disposition for peaceful purposes of highly enriched uranium resulting from the dismantlement of nuclear weapons in Russia bearing in mind existing agreements in the area of armscontrol and disarmament,the reduction of nuclear weapons in accordance with existing agreements in the area of arms control and disarmament,
Reaffirming their commitment to ensure that the development and use of nuclear energy for peaceful purposes are carried out under arrangements that will further the objectives of the Treaty on the Non-Proliferation of Nuclear Weapons of July 1, 1968, Affirming their commitment to ensure that nuclear material transferred for peaceful purposes pursuant to this Agreement will comply with all applicable non-proliferation, material accounting and control, physical protection, and environmental requirements.
Have agreed as follows:
ARTICLE 1: PURPOSE The Parties shall cooperate in order to achieve the following objectives: 1) The conversion as soon as practicable of highly enriched uranium (HEU) resulting from dismantlement of nuclearweapons in Russia extracted from nuclear weapons resulting from the reduction of nuclear weapons pursuant to arms control agreements and other commitments of the parties which is currently estimated at approximately 500 metric tons in the Russian Federation, having an average assay of 90 percent or greater of the uranium isotope 235 into low enriched uranium (LEU) for use as fuel in commercial nuclear reactors. For purposes of this Agreement, LEU shall mean uranium enriched to less than 20 percent in the isotope 235; and 2) The technology developed in the Russian Federation for conversion of HEU resulting from the reduction of nuclear weapons in the Russian Federation may be used for conversion of United States HEU in the United States of America; and
3) The establishment of appropriate measures to fulfill the non-proliferation, physical security protection, nuclear material accounting and control, and environmental requirements of the Parties with respect to HEU and LEU subject to this Agreement.
ARTICLE II: IMPLEMENTING CONTRACTS AND AGREEMENTS
1. The Parties, through their Executive Agents, shall within twelvesix months from entry into force of this Agreement seek to enter into an initial implementing contract to accomplish the objectives set forth in Article I of this Agreement.
The Parties may conclude additional implementing contracts or agreements pursuant to this Agreement, as required.
For any purchase, the Executive Agents shall negotiate terms (including price), which shall be subject to approval by the Parties.
2. It is the intent of the Parties that the initial implementing contract shall provide for, inter alia:
i) The purchase by the United States Executive Agent of HEU, conversion of such HEU to LEU LEU converted from HEU at facilities in the Russian Federation and sale of the LEU for commercial purposes. and/or the purchase by the United States Executive Agent of LEU converted from HEU at facilities in Russia and sale of such LEU for commercial purposes;
The United States will provide information to the Russian Federation on all commercial disposition of such LEU;
ii). Initial delivery of HEU or LEU converted from HEU resulting from the dismantlement of nuclear weapons in Russia by October 1993, Initial delivery of LEU converted from HEU extracted from nuclear weapons resulting from the reduction of nuclear weapons pursuant to arms control agreements and other commitments of the parties by October 1993, if possible; (iii) Conversion of no less than 10 metric tons of HEU having an average assay of 90 percent or greater of the uranium isotope 235 in each of the first five years, and, in each year thereafter, conversion of no less than 30 metric tons of HEU having an average assay of 90 percent or greater of the uranium isotope 235; however, specific amounts will be stipulated in the first and subsequent implementing contracts; (iv) The participation of the U.S. private sector and of Russian enterprises; (v) The allocation among the United States of America, private sector firms of the United States of America, the Russian Federation, and Russian enterprises of any proceeds or costs arising out of activities undertaken pursuant to any implementing contract; (vi) The use by the Russian Federation side of a portion of the proceeds from the sale of HEU or LEU converted from HEU for the conversion of defense enterprises, enhancing the safety of nuclear power plants, environmental clean-up of polluted areas and the construction and operation of facilities in the Russian Federation for the conversion of HEU to LEU, (vii) By agreement of the Parties an equivalent amount of HEU can substitute for the corresponding amount of LEU planned for purchase by the United States Executive Agent.
ARTICLE III: EXECUTIVE AGENTS Each Party shall designate an executive agent to implement this Agreement. For the United States side of America the executive agent shall be the Department of Energy, hereinafter referred to as DOE. For the Russian side Federation the Executive Agent shall be the Ministry of the Russian Federation of Atomic Energy.
After consultation with the other Party, either Party has the right to change its executive agent upon 30 days written notice to the other Party. If a governmental corporation is established under United States law to manage the uranium enrichment enterprise of the Department of Energy, it is the intention of the United States Government to designate that corporation as the Executive Agent for the United States side.
ARTICLE IV: PRIORITY OF AGREEMENT
In case of any inconsistency between this Agreement and any implementing contracts or agreements, the provisions of this Agreement shall prevail.
ARTICLE V: ADDITIONAL MEASURES
1. The Executive Agent of the Russian Federation shall ensure that the quality of HEU LEU derived from HEU subject to this Agreement is such that it is convertible to LEU usable in commercial reactors.
Specifications shall be agreed upon in the process of negotiating the initial and subsequent implementing contracts.
2. The conversion of HEU subject to this Agreement shall commence as soon as possible after the entry into force of the initial implementing contract.
3. The Parties shall, to the extent practicable, seek to arrange for more rapid conversion of HEU to LEU than that provided for in Article II (2) (iii).
4. The United States of America shall use HEU and LEU acquired pursuant to this Agreement and its implementing contracts and agreements, when subject to United States jurisdiction and control, for peaceful purposes only.
5. HEU and LEU acquired by the United States of America pursuant to this Agreement, and implementing contracts and agreements related to it, shall be subject to safeguards in accordance with the November 18, 1977 Agreement between the United States of America and the International Atomic Energy Agency (IAEA) for the Application of Safeguards in connection with the Treaty for the Non-Proliferation of Nuclear Weapons of July 1, 1968.
6. The Parties shall maintain physical protection of HEU and LEU subject to this Agreement.
Such protection shall, at a minimum, provide protection comparable to the recommendation set forth in IAEA document INFCIRC/ 225/REV.2 concerning the physical protection of nuclear material.
7. If the Parties enter into an agreement for cooperation concerning the peaceful uses of nuclear energy, nuclear material acquired by the United States of America pursuant to this Agreement and its implementing contracts and agreement when subject to U.S. jurisdiction or control, shall be subject to the terms and conditions of that Agreement for cooperation.
8. The activities of the United States Government of America under this Agreement, or any implementing contract or agreement shall be subject to the availability of United States Governmentfunds.
9. In the event the United States Government does not have funds available for implementation of this Agreement, the Executive Agent of the Russian Federation reserves the option to obtain funding for implementation of this Agreement from any private U.S. company.
10. Prior to the conclusion of any implementing contract, the Parties shall establish transparency measures to ensure that the objectives of this Agreement are met, including provisions for nuclear material accounting and control and access, from the time that HEU is made available for conversion until it is converted into LEU.
Specific transparency measures shall be established in the same time frame as the negotiation of the initial implementing contract, and shall be executed by a separate agreement.
11. Prior to the conclusion of any implementing contract, the Parties shall agree on appropriate governing provisions for entry and exit, liability, and status of personnel, exemptions for taxes and other duties, and applicable law.
12. The Executive Agent of the United States shall use the LEU converted from HEU in such a manner so as to minimize disruptions in the market and maximize the overall economic benefit for both Parties.
This Agreement shall have no effect on contracts between the Russian FederationRussian enterprises and United States companies for the delivery of uranium products which are currently in force and consistent with United States and Russian law.
13. This Agreement places no limitations on the right of the Russian Federation to dispose of LEU derived from HEU resulting dismantlement of nuclear weapons Russiaextracted from nuclear weapons resulting from the reduction of nuclear weapons pursuant to arms control agreements and other commitments of the Parties beyond the specific commitments set forth herein.
ARTICLE VI: ENTRY INTO FORCE, DURATION AND AMENDMENTS 1. This Agreement shall enter into force upon signature and shall remain in force for twenty years until the fullamount of HEU provided for in paragraph 1 of Article I is converted into LEU, delivered, and supplied to commercial customers. The duration of this Agreement may be extended by the written agreement of the Parties.
2. Each Party may propose amendments to this Agreement. Agreed amendments shall enter into force upon signature and shall remain in force so long as this Agreement remains in force.
3. Each Party shall have the right to terminate this Agreement upon 12 months written notification to the other Party.
Done at Washington this 18th day of February, 1993, in duplicate in the English and Russian languages, both texts being equally authentic.
For the United States of America: William Burns (Head of the U.S. Safe and Secure Dismantlement Delegation)
For the Russian Federation: Viktor Mikhailov (Russian Minister of Atomic Energy)
Comments or questions? Contact Cristina Chuen at MIIS CNS: Cristina.ChuenATmiis.edu
http://66.249.93.104/search?q=cache:4fFyG_I-LSMJ:www.nti.org/db/nisprofs/russia/fulltext/heudeal/heufull.htm+HEU+AGREEMENT&hl=en&gl=ro&ct=clnk&cd=2
April 26, 1986 - The Chernobyl nuclear accident occurs in the Ukrainian SSR.
On October 11, 1986 Reagan and Gorbachev met in Reykjavík, Iceland, in an effort to continue discussions about scaling back their intermediate missile arsenals in Europe.
U.S. President Reagan and Soviet General Secretary Gorbachev signing the INF Treaty, 1987.
The US-Russia HEU Agreement
The major political changes which took place in the former Soviet Union after the mid 1980s, culminating in the break-up of the country into its constituent republics in 1991, led to the end of the nuclear arms build up which had taken place since the early 1950s. Nuclear disarmament treaties entered into by the USA and Russia since the late 1980s have resulted in considerable quantities of high enriched uranium (HEU) becoming surplus to military requirements.
Much of this material is suitable for conversion to civilian use as fuel for existing commercial nuclear reactors, by blending it with other uranium to produce low enriched uranium (LEU), suitable for fabrication into ordinary nuclear fuel. HEU used in this way is a source of enrichment and conversion services, as well as of natural uranium equivalent.
The major impact to date on the commercial nuclear fuel market has come from an agreement between the US and Russian governments for the delivery of LEU derived from 500 tonnes of ex-military Russian HEU to the USA for use in nuclear fuel. The history and present status of this agreement is the subject of this briefing.
History of the HEU Agreement
The former Soviet Union (FSU) is estimated to have produced about 1400 tonnes of HEU with a U-235 assay of around 90%1, substantially more than the 994 tonnes produced by the USA. Almost all of this passed to the Russian government on the break up of the FSU. The US and Russian governments concluded the US-Russia HEU Agreement in early 1993, under which Russia was to supply the LEU derived from 500 tonnes of this HEU to the USA over a period of about 20 years. Each party was to appoint an "Executive Agent" which would be responsible for carrying out the deal.
The deal includes an agreement on transparency, designed to ensure that the disarmament objectives are met. The US side has the right to send inspectors to the Russian facilities involved in preparing the material for shipment to ensure that it is in fact being derived from former weapons material. The Russian side has the reciprocal right to send inspectors to verify that the material is being used for peaceful purposes, i.e. for commercial nuclear fuel.
The agreement specified that each year for the first five years of the agreement, the USA would take delivery of LEU derived from 10 tonnes of HEU. Blending of this material would produce about 310 tonnes of LEU enriched at 4.4% U-235 (containing the equivalent of 1.84 million SWUs and 3000 tonnes of natural uranium). For the following 15 years the annual amount would increase to 30 tonnes of HEU, equivalent to about 930 tonnes of LEU. However, this delivery schedule has been altered by subsequent agreements.
Commercial arrangements for the deal were set out in a contract signed in January 1994 between the US Enrichment Corporation (USEC), acting as the Executive Agent of the US government, and Techsnabexport (Tenex), the Executive Agent of the Russian government. Tenex is a Russian joint stock company, 51% owned by the Russian government. USEC was at the time a US-government owned corporation. Although USEC was privatised in 1998 it is still the Executive Agent and has emphasised that it remains committed to the HEU deal.
Table 1. Delivery schedule for Russian HEU under US-Russia HEU Agreement.
Note: Deliveries actually made during 1997 and 1998 were 13.4 tonnes HEU (4020 tU) and 14.5 tonnes HEU (4350 tU) respectively. However, the balance of the 1997 quantity was delivered in early 1998. The balance of the 1998 quantity was expected to be delivered in 1999 (in addition to the 1999 quantity).
Under the terms of the commercial contract, USEC agreed to pay on delivery for the enrichment component of the LEU from Minatom. The contract was imprecise regarding payment for the uranium and conversion components; payment for these would only have to be made within the contract period. The initial price to be paid by the US side was set at US$780/kg of LEU; of this, the enrichment component was priced at US$82.10 per SWU, and the uranium and conversion components together at US$28.50/kg UF6.
These prices imply a value for the whole deal of nearly US$12 billion. However, the contract provides for annual price negotiations, with a proviso that if no agreement is reached in any year the previous year’s prices will continue for a further year. If no agreement is reached on prices for a second year, then the contract could be terminated.
The contract included a schedule for deliveries of LEU, with the shipments to start in 1994. However, there were some initial technical difficulties with delivery of the LEU. It took a considerable time to establish the blending process in Russia to enable the LEU produced to meet the specification for Commercial Grade Enriched Uranium as set out in the relevant ASTM standard (C-996-96), which defines the isotopic composition of fuel acceptable for commercial reactors. The blending process which was established involved blending HEU with 1.5% enriched uranium, itself produced by the enrichment in Russia of tailings from previous enrichment activities.
These difficulties resulted in the start of deliveries being delayed. Deliveries eventually began in 1995, but the Russian side blended only 6 tonnes of HEU in that year (equivalent to about 1800 tU), compared with a target of 10 tonnes HEU (3000 tU). However, in 1996 the equivalent of 12 tonnes of HEU (3600 tU) was delivered successfully. The entire delivery schedule was revised in 1996. Both the original schedule and the 1996 revision are given in Table 1.
It is important to note that USEC only agreed to pay immediately for the enrichment component of the LEU. No mechanism for the sale of the uranium component (or for payment being made to Russia for it) was set out in the original agreement or the commercial contract. Its entry into the US commercial nuclear fuel market is restricted, as described below. Protracted negotiations involving Tenex, several Western companies and the US and Russian governments resulted in a further commercial agreement being announced in March 1999 covering the sale and marketing of the uranium component. This agreement and the events leading up to it are discussed below.
In contrast, there are no restrictions on the US market entry of the conversion component of the LEU.
Restrictions on Sale of the Uranium
Restrictions on the import to the USA of uranium from Russia result from a trade action brought in 1991 by US uranium producers against the Soviet Union, and subsequently against Russia, alleging that uranium was being "dumped" in the US market. A preliminary determination by US government trade officials in early 1992 supported the uranium producers’ contention.
In October 1992, Russia and the USA entered an agreement (known as the "Suspension Agreement") suspending the anti-dumping action while setting price-related quotas on US imports of Russian uranium, which were to remain in effect through 2003. Uranium derived from HEU was not excluded from these restrictions (the HEU Agreement was signed later, in 1993). However, an amendment to the suspension agreement was signed in March 1994 which, inter alia, excluded the HEU material from restrictions.
However, the USEC Privatization Act of 1996 placed restrictions on the uranium component of the HEU for deliveries from 1997 onwards. Under its provisions, ownership of the natural uranium and conversion components of deliveries of Russian LEU from 1997 onwards has remained with Russia, clearly restricting USEC’s interest in the HEU deal to the enrichment component. For deliveries of LEU from Russia from the beginning of 1997, USEC has delivered to Tenex (within North America) a quantity of natural UF6 equivalent to the uranium and conversion components of the LEU delivered (i.e. USEC has only retained the enrichment component).
The Act sets annual quotas for the entry into the US market of the uranium component of LEU deliveries from 1998 onwards; these are shown in Table 1. A quota of 769 tU equivalent was set for 1998, increasing by 769 tU per year to a level of 6154 tU in 2005. Subsequently, the quota will increase by 385 tU annually until levelling off at 7692 tU in 2009 and thereafter (a level equal to nearly half of total US annual requirements). The remainder of the uranium component may be sold for use in the USA under the terms of the amended Suspension Agreement, or for overfeeding US enrichment plants; or it can be sold for use outside the USA.
In addition, the USEC Privatization Act dealt with the uranium component of the 1995-96 deliveries, which had remained unsold. The Act required USEC to pay Minatom for the uranium component of the 18 tonnes of Russian HEU (5400 tU equivalent) which was delivered in these first two years of the contract. This was to satisfy the immediate requirement of the Russian side to be paid for the uranium component of the LEU. USEC was required to transfer this material to the US Department of Energy (DOE) for no charge. By the same legislation, the DOE was required to transfer to USEC 50 tonnes of HEU from the US government stockpile.
In the Act, the DOE was required to sell this Russian material within seven years. About half of it has already been sold by DOE for use in 1997-99. However, the sale of the remainder has now been delayed until 2009 due to the subsequent agreement on the uranium component (discussed below). These quantities are shown in the last column of Table 1.
The commercial contract for the implementation of the HEU agreement between USEC on the one hand and Tenex and Minatom on the other was amended in September 1996 to make it compatible with the new legislation.
Agreement on the Uranium Component
Meanwhile, Tenex opened negotiations with three Western companies (Cameco of Canada, Cogema of France, and the US subsidiary of Nukem of Germany) for them to market a large part of the uranium and conversion components, with the remainder of the UF6 to be returned to Russia for internal use. These negotiations proved to be very complex. As well as difficulties agreeing on the commercial terms, there were other complicating issues which prevented a deal being finalised, including US restrictions on the re-export of uranium back to Russia.
The continuing uncertainty about the handling of the uranium component, in particular the fact that Russia was not receiving payment for it from the US side, are thought to have contributed to delays in LEU deliveries during 1997. The LEU from 13.4 tonnes of HEU (4020 tU equivalent) was actually delivered in that year, compared with a target of 18 tonnes HEU (5400 tU). Deliveries in early 1998 were assigned to the 1997 schedule to make up the shortfall. However, subsequent deliveries in 1998 continued to be behind schedule, and by the end of that year only the equivalent of 14.5 tonnes HEU (4350 tU) had been delivered, compared with a planned total of 24 tonnes HEU (7200 tU). Some or all of this shortfall was expected to be made up in 1999.
Following high-level involvement of the US and Russian governments in the negotiations, an agreement between Tenex and the three Western companies (Cameco, Cogema and Nukem) was finally signed in March 1999. To facilitate the deal, supplemental agreements between the two governments were also finalised, including a mechanism for the return of unpurchased material from the USA to Russia for internal use or later re-export. This will be achieved through a previously unused provision of US legislation which allows such re-exports in exceptional circumstances.
The new agreement is complex, and its impact will depend on prevailing market conditions over the remaining life of the HEU Agreement. It gives the three companies the exclusive right to purchase up to 70% of the UF6 to be delivered in the remaining 15 years of the HEU deal, equivalent to about 100 000 tU out of a total of nearly 140 000 tU. This will be divided in the proportions of 45% each for Cameco and Cogema and 10% for Nukem until 2004, with 42.5% each for Cameco and Cogema and 15% for Nukem after that date. The remaining 30% of the UF6 (equivalent to about 40 000 tU) will be available for Tenex, under arrangements described below.
The new agreement applies to the uranium and conversion components of the HEU (i.e. the companies will purchase UF6). In principle, the companies will be able to sell the conversion component separately, by "de-converting" the UF6 (a transaction which is achieved by swapping it for natural uranium).
Under an important supplementary agreement, the US government has purchased for US$325 million about 10 800 tonnes of uranium from deliveries of LEU in 1997 and 1998 which had remained unsold, and placed this in a stockpile together with a similar quantity of US government-owned uranium which it had been planning to sell in the near future. This will form a total stockpile of about 22 300 tU, which will be retained for at least ten years. This can be sold after the ten year period in accordance with existing US legislation.
If any of the three companies and/or Tenex do not take up their full allocation of uranium in any year, the remainder will be returned to Russia where it will be placed in a stockpile for the remaining term of the HEU Agreement (i.e. to 2013), or until the companies wish to buy it, or until the stockpile exceeds the size of the US stockpile described above. Up to 2600 tU per year from this Russian stockpile can be used for the dilution of HEU for future deliveries under the agreement. If the stockpile exceeds the size of the US stockpile, then the Russian government can use the excess to supply certain existing contracts.
Thus the new agreement has removed many of the uncertainties surrounding the entire HEU deal, which had been overshadowing the uranium market since the original deal was signed. The nature of the deal does mean that some uncertainty remains about the timing of the market entry of the material. However, it confirms that delivery of the LEU from 500 tonnes of HEU will continue over the next 15 years, and that the uranium contained will eventually be sold for commercial use, with the timing dependent upon market conditions. The agreement also attempts to limit the short term impact on the already weak uranium market by holding back a portion of the uranium for at least 10 years, and some up to 13 years.
Following the signing of the agreement, deliveries of LEU from Russia to the USA were expected to be speeded up. In addition to the scheduled 1999 deliveries, the shortfall from deliveries scheduled in 1998 was expected to be made up.
Outlook for the HEU Agreement
Quantities of LEU derived from Russian ex-military HEU have been entering the commercial nuclear fuel cycle since 1995, and both governments remain committed to continuing deliveries. So far, the enrichment component of the material delivered has been sold in the market by USEC, while limited quantities of the uranium component have entered the market. From 1999 onwards, however, the uranium component could begin to enter the US market in increasing quantities, in accordance with quotas set in the USEC Privatization Act. The European Union has decided to allow some of the uranium to enter its market (in addition to other non-military Russian uranium).(See other trade briefing : EU Policy on Imports of Uranium and Enrichment Services)
The conclusion of an agreement by which the natural uranium component is to be marketed by three Western companies, which are all major participants in the uranium market, is expected to remove one of the main barriers to the smooth implementation of the HEU agreement. Thus, although there may be some variations in the detailed schedule, overall it appears likely that the agreement for the delivery of LEU derived from 500 tonnes of Russian ex-military HEU will be completed, and that all components of the material will enter the commercial nuclear fuel market over the next 15-20 years.
It must be noted that the commercial nuclear power industry is the only outlet for this former weapons material. As well as producing electricity, its use as nuclear fuel ensures that it can never again be used to make nuclear weapons. The Uranium Institute, and the nuclear fuel industry in general, fully supports the process of converting nuclear weapons material into fuel for electricity generation.
Reference
1. Bukharin O, Analysis of the size and quality of uranium inventories in Russia. Paper presented to Nuclear Energy Institute International Uranium Seminar, October 1995
http://www.world-nuclear.org/trade_issues/tbriefings/heu/index.htm
Intermediate-Range Nuclear Forces Treaty
From Wikipedia, the free encyclopedia
U.S. President Reagan and Soviet General Secretary Gorbachev signing the INF Treaty, 1987.
The Intermediate-Range Nuclear Forces (INF) Treaty was an agreement between the United States and the Soviet Union signed in Washington, D.C. on December 8, 1987 by Ronald Reagan and Mikhail Gorbachev. It was ratified by the United States Senate on May 27, 1988 and came into force on June 1 of that year.
The treaty eliminated nuclear and conventional ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 kilometers (300-3,400 miles). By the treaty's deadline of June 1, 1991, a total of 2,692 of such weapons had been destroyed, 846 by the U.S. and 1846 by the Soviet Union. Also under the treaty, both nations were allowed to inspect each other's military installations. The full title of the agreement is The Treaty Between the United States of America and the Union of Soviet Socialist Republics on the Elimination of Their Intermediate-Range and Shorter-Range Missiles.
http://en.wikipedia.org/wiki/Intermediate-Range_Nuclear_Forces_Treaty
Cold War (1985-1991)
http://en.wikipedia.org/wiki/Cold_War_(1985-1991)
Russia will join WTO in 2006 - Kudrin
11:21 22/ 04/ 2006
MOSCOW, April 22 (RIA Novosti) - Russia will join the World Trade Organization in 2006, the Russian Finance Minister said Friday, speaking at a meeting in Washington.
Alexei Kudrin said that having held talks with U.S. Trade Representative Rob Portman, he was optimistic about Russia's accession.
"I am sure that we will join the WTO this year," he said.
Russia appreciates U.S. demands in bilateral negotiations, and wants to find a solution, the minister said.
Under WTO regulations, Russia must sign bilateral accession agreements with all members of the 58-nation WTO Working Party. Moscow initially planned to do so last year but it is still holding talks with the U.S., Canada, Australia and Colombia. Obstacles remain in negotiations with Washington.
The main area of dispute is over American demands that Russia allow foreign banks to open branches in the country. Russian legislation currently prohibits foreign banks from opening branches in the country, although they may set up subsidiaries.
http://en.rian.ru/russia/20060422/46788042.html
When will the U.S. lift restrictions on Russian uranium exports?
16:54
14/ 04/ 2006
MOSCOW, (RIA Novosti political commentator Pyotr Goncharov)
Late last week Moscow hosted the fourth national energy forum on "Russia's Fuel and Energy Sector in the 21st Century."
The forum organizers and guests agreed that nuclear industry had entered a period of renaissance, which is logical in view of the common intention to reduce the share of hydrocarbons in the global energy balance.
However, participants in the roundtable that was held after the forum also pointed to certain "atavisms" in the development of the nuclear industry that do not fit the logic of constructive and equitable energy relations between Russia and the United States.
Why the two countries? Russia is the world's main provider of enriched uranium, and is likely to keep this position in the future, while the U.S. stubbornly upholds anti-dumping restrictions on the export of Russian uranium to the American market.
Delegates from private U.S. consumers of uranium, who attended the roundtable, clearly spoke for reviewing the policy of the US Department of Commerce regarding Russian suppliers.
Pacific Gas & Electric Corporation is for opening markets to various components of the nuclear fuel cycle and to uranium enrichment and conversion services, said the company's Vice President James A. Tramuto. This will allow diversifying the portfolio of suppliers by stipulating work with existing and future nuclear power plans, and in this way ensure the growth of supplies.
There are no reasons to keep the restrictions because the situation has changes since their introduction, said James Malone, Vice President of Nuclear Fuels, Exelon, the largest nuclear operator in the US.
Jeff Combs, President of the UX Consulting Company, said retaining the restrictions would slow down the development of the nuclear industry.
Uranium prices have doubled in the last two years.
The world needs Russian uranium, and Russia should keep its leading place on the global uranium market, especially because American companies have 103 nuclear power units and only one fuel supplier in the U.S.
This is clearly not enough to ensure the nuclear safety of the country now, let alone in the future when the U.S. will start building 13 new nuclear blocks.
As representatives of private companies, we are well aware of this, but the Department of Energy does not want to see the problem, the American guests of the Russian energy forum said.
According to Russia's Techsnabexport (Tenex), one of the world's largest producers and exporters of nuclear materials, services and equipment with the annual turnover of $2 billion, Russia has 50% of the world's uranium enrichment facilities.
Russian enrichment technologies are the most efficient and profitable in the world.
If Russia is given equal conditions with other countries on the global market of the nuclear fuel cycle, it will satisfy 25-30% of the world's demand, said Tenex head Vladimir Smirnov.
The anti-dumping restriction on Russia's uranium exports were imposed during the Soviet era, when the Soviet Ministry of Nuclear Energy delivered a huge amount of natural uranium on the world markets, including the United States, sending prices crashing.
The anti-dumping procedure was complemented with restrictions on the Russian ministry.
As a result, Russia now may operate on the U.S. market only through a special agent, who is actually its rival.
But the most paradoxical thing is that the world's most liberal American economy, of which Washington is rightly proud, is doing its best to save the unprofitable domestic producer.
In fact, the U.S. uranium producers, who are using the technologies of the dawn of the nuclear era, survive only thanks to the Russian nuclear industry.
Russian nuclear technologies have surged far ahead, and uranium export restrictions are doing colossal damage to the Russian enrichment and nuclear generation sectors.
LEU (Low enriched uranium) is not the natural uranium against which the restrictions were designed, but fuel for nuclear power plants (NPP).
Russian producers and American consumers cannot understand why enriched uranium, which is a high-tech service, should suffer from the restrictions.
But this is not all.
The anti-dumping procedure that is being used in the United States and several European countries does not spread to the 1993 HEU-LEU (highly enriched uranium - low enriched uranium) agreement signed for 20 years.
Under it, Russia removes 500 metric tons of highly enriched uranium from its scrapped warheads, converts it into low enriched uranium and delivers it to the Untied States as fuel for American NPPs.
The restrictions were suspended for the duration of the investigation, but the U.S. has set a quota stipulating a restrictive 116% duty on uranium exports made in excess of the quota.
Russia has exhausted its quota in 2002.
It can continue working despite the high duty, said Smirnov, but Tenex would appeal the size of the duty in case of the lifting of the anti-dumping measures. It will rely on the precedent of French company Areva, for which the duty was cut to near zero.
The next hearing on the anti-dumping measures is set for May 23 in Washington.
Russia will demand the lifting of the discriminating restrictions on Russian deliveries of nuclear materials to the Untied States and Europe.
The Economics Ministry and the Federal Atomic Energy Agency of Russia have sent a letter to the U.S. Department of Commerce requesting that the anti-dumping measures regarding Russian suppliers of nuclear materials and services should be lifted and that they should be ensured free access to the American market.
The stand taken by the U.S. energy companies promises a positive solution, especially because the implementation of the ambitious nuclear program recently announced by the U.S. administration would be impossible without the liberalization of the American market of nuclear fuel and stable deliveries of Russian uranium.
The opinions expressed in this article are those of the author and may not necessarily represent the opinions of the editorial board.
Limits on Russian nuclear fuel supplies to U.S. unprofitable
14:44
07/ 04/ 2006
MOSCOW, April 7 (RIA Novosti) - Restrictions dating back 15 years on Russia's nuclear fuel supplies to the United States are unprofitable for both countries, a senior official with Russia's nuclear-technology exporter said Friday.
Lyudmila Zalimskaya, a deputy director of Technosnabexport, told RIA Novosti U.S.-based companies were unable to buy Russian-made centrifuge technologies because of a 1992 anti-dumping decision (v precedent article!) that had led to an unjustified rise in prices and market monopolization for U.S. enrichment companies.
Zalimskaya said the restrictions on U.S. imports of Russian low-enriched uranium "prevented American energy companies from acquiring access to centrifuge uranium enrichment technologies and Russian suppliers from exporting their products on competitive terms."
Restrictions were in place during the Cold War, but the collapse of the Soviet Union engendered more complications when Russia started to supply markets with naturally occurring uranium, which led to a fall in prices. The U.S. imposed trade restrictions and Russia can now only supply uranium through special mediator firms!!.
The U.S., Russia and the European Union are key players on the nuclear fuel market and use two uranium enrichment technologies: diffusion and centrifuge.
"The first is very expensive and inefficient, whereas Russia uses more progressive centrifuge uranium enrichment technology," Zalimskaya said.
Zalimskaya said the caps were not in the interests of either Russia or the U.S.
"Furthermore, these restrictions impede the normal, consistent advancement of our countries in cooperation on various civilian energy projects," Zalimskaya said.
http://en.rian.ru/russia/20060407/45436007.html
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