IAEA Board Approves Russian Fuel Bank Plan

Daniel Horner

The International Atomic Energy Agency (IAEA) Board of Governors has adopted a resolution authorizing Russia to establish a reserve of low-enriched uranium (LEU) as part of an international nonproliferation plan.

In addition to approving the proposed text of an agreement with Russia, the Nov. 27 resolution authorizes the IAEA director-general “to conclude and subsequently implement” agreements with IAEA member states to receive the LEU from the Russian reserve if the countries meet certain basic requirements. According to the resolution, the board does not have to provide “case-by-case” authorization, but the director-general should “keep the Board informed of the progress of individual Agreements” with potential recipient countries. As part of the resolution, the board also approved a “model agreement” with potential recipients of the LEU.

The Nov. 27 approval came with eight dissenting votes and three abstentions among the 35-member board, a Vienna-based diplomat said in a Dec. 14 interview. The board traditionally reaches decisions by consensus; the vote tallies are not made public.

The Russian proposal is one of several variants of the concept of an international fuel bank, which aims to give countries an attractive alternative to indigenous uranium-enrichment programs by providing an assured supply of fuel at market prices. The bank would serve as a backup to existing commercial mechanisms for countries with good nonproliferation credentials.

The concept has been strongly supported by Mohamed ElBaradei, who was the IAEA’s director-general until Dec. 1; President Barack Obama; and others. But the concept faced resistance, particularly from some key members of the Nonaligned Movement.

As a result, the Russian proposal and another fuel bank plan, from the private, U.S.-based Nuclear Threat Initiative (NTI), did not get a go-ahead from the board when they were considered in June, and efforts to resolve the issue made little progress before the September board meeting. (See ACT, October 2009.)

At the November board meeting, Russia requested a vote on its proposal, the diplomat said. The eight dissenting votes came from Argentina, Brazil, Cuba, Egypt, Malaysia, Pakistan, South Africa, and Venezuela, he said; India, Kenya, and Turkey abstained. Azerbaijan was absent, but later said it would have voted in favor of the proposal, he added.

The other current members of the board are Afghanistan, Australia, Burkina Faso, Cameroon, Canada, China, Denmark, France, Germany, Japan, Mongolia, the Netherlands, New Zealand, Peru, Romania, Russia, South Korea, Spain, Switzerland, Ukraine, the United Kingdom, the United States, and Uruguay.

The countries that did not support the resolution said they were concerned that the arrangement could “erode their Article 4 rights,” the diplomat said. He was referring to Article 4 of the nuclear Nonproliferation Treaty (NPT), which gives parties the right to “the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy” and says parties have an “inalienable right” to pursue nuclear energy programs as long as the programs are “in conformity with” the treaty’s nonproliferation restrictions.

The board resolution says that those rights “will in no way be affected” by the Russian initiative.

The IAEA-Russian agreement says Russia will “establish a guaranteed physical reserve” of 120 metric tons of LEU in the form of uranium hexafluoride. When fabricated into reactor fuel, that amount of material would provide enough fuel for a typical power reactor to operate for several years.

The agreement names the International Uranium Enrichment Center at Angarsk as the “executive authority.” The center is a Russian commercial enrichment venture with investments from other countries. The fuel reserve would be located on the Angarsk site in Siberia, in an area separate from the enrichment plant, the diplomat said.

The material will be under IAEA safeguards, and Russia will assume the costs of the safeguards, the agreement says.

As described by the agreement and the diplomat, a shipment of LEU from Angarsk would go to the port of St. Petersburg, where ownership would transfer to the IAEA. The agency would then immediately transfer ownership of the LEU to the customer country, which would have paid for it in advance, the diplomat said. The IAEA then would pay Russia, he said.

Under the IAEA-Russian agreement, the countries eligible to receive the LEU would be those “with respect to which the IAEA has drawn the conclusion that there has been no diversion of declared nuclear material and concerning which no issues are under consideration by the IAEA Board of Governors relating to the application of IAEA safeguards.” The recipient countries would have to have an agreement with the IAEA opening all their “peaceful nuclear activities” to inspections.

Back-up Fuel Supply System

It is expected that shipments of fuel would take place rarely, if ever, since the arrangement is intended to be a last-resort option if supplies are interrupted for reasons other than violations of the country’s nonproliferation commitments. The IAEA board resolution said that “the establishment of the reserve of LEU and the subsequent implementation of future agreements with Member States will be carried out as a back-up solution only and in such a way that any disturbance of or interference in the functioning of the existing fuel market is avoided.” The board “not[ed] the importance of developing a range of complementary options for additional assurances of supply, and the fact that the good operation of the market already provides assurances of supply.”

Before the IAEA board meeting, Russian Deputy Foreign Minister Sergey Ryabkov and U.S. Undersecretary of State for Arms Control and International Security Ellen O. Tauscher issued a joint Nov. 23 statement, saying, “For those who seek greater assurance than the market provides, multilateral fuel assurance mechanisms can serve as safety nets in the event of a fuel supply disruption.”

In a Nov. 28 statement, the Russian Ministry of Foreign Affairs said the initiative helps ensure the supply of nuclear fuel “on a predictable, stable, cost-effective and long-term basis,” which “will facilitate expanding the use of nuclear energy for peaceful purposes.” The ministry added that “[t]his initiative aims at strengthening the nuclear nonproliferation regime and is a concrete contribution of Russia to creating the conditions for successfully holding the 2010 NPT Review Conference.”

The board did not take up the NTI plan, which was aimed at establishing an IAEA-owned reserve of LEU. In 2006, the NTI pledged $50 million for such a reserve on the condition that IAEA member states would donate another $100 million. That goal has been met by pledges from the United States ($49.5 million), the European Union (up to 25 million euros), Kuwait ($10 million), the United Arab Emirates ($10 million), and Norway ($5 million).

However, the diplomat said, reaching the pledge threshold does not mean that the NTI offer automatically is accepted. The board has to make a formal decision to accept the money, and that move could face the same type of opposition that the Russian plan did, he said.

There also needs to be a decision on the host country, the diplomat said. In a document sent to the IAEA in May, Kazakhstan said it “could consider” hosting the facility if a fuel bank were established.

“Perhaps if things go well,” the board could take up the NTI proposal at its June meeting, the diplomat said. The board meets quarterly in Vienna, where the agency has its headquarters.

The NTI declined to comment on the status of its proposal.