VZCZCXRO1475
PP RUEHHM
DE RUEHHI #2817/01 3110644
ZNR UUUUU ZZH
P 070644Z NOV 06
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 3929
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEHHM/AMCONSUL HO CHI MINH 2106
RUEAIIA/CIA WASHINGTON DC

UNCLAS SECTION 01 OF 04 HANOI 002817 
 
SIPDIS 
 
STATE FOR NP (FENSTERMACHER); EAP/MLS 
NSC FOR HOLLY MORROW 
USDOE FOR NNSA/NA-1 (BROOKS); NNSA/NA-20 (TOBEY, BAKER); 
NNSA/NA-21 (BIENIAWSKI, CUMMINS, DICKERSON) 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY KIPR KNNP KGIT VM
SUBJECT: MFA SIGNALS APPROVAL ON REACTOR FUEL CONVERSION PROPOSAL, 
BUT NO CONFIRMATION YET 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. 
 
Ref: Hanoi 2734 
 
¶1.  (SBU) Summary.  On October 26, 2006, Department of Energy's 
National Nuclear Security Administration (NNSA) staff and ESTHOff 
discussed with Ministry of Foreign Affairs (MFA) staff details of 
NNSA Assistant Deputy Administrator (ADA) Andrew Bieniawski's letter 
to Assistant Minister of Foreign Affairs Phan Binh Minh, which was 
delivered to MFA on October 25.  ADA Bieniawski's letter summarizes 
the USG's proposal to the Government of Vietnam (GVN) to swap-out 
high-enriched uranium (HEU) fuel in the Dalat reactor, convert the 
reactor to low-enriched uranium (LEU) fuel and return Russian-origin 
spent HEU back to Russia.  During the meeting, MFA Acting Director 
of International Organizations Le Hoai Trung stated that the MFA 
attaches "great importance" to the issue and is "committed" to 
recommending that the Ministry of Science and Technology (MOST) 
approve the USG proposal, "sooner rather than later."  In a 
follow-up discussion on November 2, MFA Americas Department Deputy 
Director Le Chi Dung indicated to ESTHOff that MFA and MOST are now 
on the same page, that an approval letter from the Office of the 
Prime Minister may come as soon as early next week and that "it is 
almost a done deal."  Comment: Until we receive a written response 
from MFA to ADA Bieniawski's letter, we cannot be sure that the 
strong, positive language expressed by these MFA senior officials 
signals a breakthrough on the issue.  End summary. 
 
ADA Bieniawski's Meeting with MFA on the Reactor Conversion 
--------------------------------------------- --- 
 
¶2.  (SBU) As previously reported (reftel), the Department of 
Energy's National Nuclear Security Administration Assistant Deputy 
Administrator Andrew Bieniawski met Assistant Minister of Foreign 
Affairs Pham Binh Minh on October 24, 2006, to continue engagement 
with the GVN regarding the fuel conversion of Vietnam's research 
reactor and to reiterate at higher levels within the GVN the 
importance of showing a tangible commitment on this issue prior to 
President Bush's visit in November.  In that meeting, ADA Bieniawski 
offered to provide MFA with a letter containing specific details of 
the proposed USG assistance under the Russian Research Reactor Fuel 
Return (RRRFR) program to the GVN.  The letter was transmitted to 
MFA by facsimile on October 25. Text of letter follows. 
 
ADA Bieniawski's Letter to MFA Assistant Minister Minh 
--------------------------------------------- --------- 
 
¶3.  (SBU) Begin Text. 
 
October 25, 2006 
 
Mr. Pham Binh Minh 
Assistant Minister 
Ministry of Foreign Affairs 
1 Ton That Dam 
Hanoi, Vietnam 
 
Dear Assistant Minister Minh: 
 
I would like to take this opportunity to thank you for your 
government's continuing commitment to nuclear nonproliferation which 
has contributed greatly to the security of our countries and the 
world community.  The purpose of this letter is to clearly summarize 
the status of several proposed nonproliferation projects and to 
specify the benefits of these programs to the Government of 
Vietnam. 
 
Return of Russian-origin fresh highly enriched uranium (HEU): 
 
First, we would like to receive final approval from the Prime 
Minister's office to repatriate Russian-origin fresh HEU fuel that 
is currently in storage at the Dalat Research reactor.  Currently, 
there are 36 assemblies at the Dalat Research reactor containing 4.3 
kilograms of highly enriched uranium.  Our proposal is to return 
this Russian-origin fresh HEU fuel as part of the very successful 
Russian Research Reactor Fuel Return program.  This program is under 
the framework of the International Atomic Energy Agency and numerous 
countries are participating under this program to repatriate 
Russian-origin fresh and spent fuel to Russia.  To date, we have 
safely and successfully conducted ten shipments from eight countries 
(Yugoslavia, Romania, Bulgaria, Libya, Uzbekistan, the Czech 
Republic, Latvia, and Poland) to repatriate their Russian-origin 
fresh HEU fuel.  The only countries that have Russian-origin fresh 
HEU fuel that have not yet agreed to participate are Belarus, DPRK, 
 
HANOI 00002817  002 OF 004 
 
 
Ukraine, and Vietnam.  We are in discussions with Belarus and 
Ukraine to return their Russian-origin fresh HEU fuel and expect to 
reach agreement soon with them.  Thus, we very much would like 
Vietnam to be a participant in this program. 
 
It is also important to note that since the fresh HEU fuel shipment 
is conducted under the auspices of the IAEA, no 
government-to-government agreement is required to move forward with 
the shipment.  As has been done with numerous other countries, a 
contract would be signed between the IAEA, the Russian 
transportation company Sosny, and the relevant nuclear agency in 
each country (in the case of Vietnam this would be with VAEC). 
 
Our compensation package is the following: 
 
First, the U.S. Department of Energy will cover all costs associated 
with packaging, licensing, and transportation of the fresh HEU fuel 
to Russia.  Specifically, through an IAEA contract, the Russian 
Federation will be paid approximately $550,000 and VAEC will be paid 
approximately $50,000.  The $50,000 will cover Vietnamese costs for 
preparation, packaging, and transportation of the fresh HEU fuel to 
the airport. 
 
Second, in exchange for Vietnam agreeing to return the 36 fresh HEU 
assemblies, the U.S. Government will provide full compensation to 
Vietnam for the value of this material.  As noted above, the 36 
assemblies of Russian-origin fresh HEU fuel contain 4.3 kilograms of 
HEU, which is 1.45 kilograms of U-235.  Normally, our standard 
compensation package is equivalent replacement based on U-235 (1 
gram of U-235 of HEU should be replaced by 1 gram of U-235 of LEU). 
Thus, the package should be 1.45 kilograms of U-235 of LEU, totaling 
33 assemblies.  However, I have authorized that the compensation 
package be increased so Vietnam will receive compensation totaling 
1.8 kilograms of U-235 (not just 1.45 kilograms of U-235) which is 
equal to 36 assemblies of LEU.   This increased quantity of LEU will 
ensure that the Dalat research reactor will operate for an 
additional 4 years.  Originally, with an HEU core, the reactor would 
operate for 10.5 years.  With the new 36 LEU replacement assemblies, 
the reactor can now operate for 14.1 years. 
 
Also, in our meeting with you on October 24, 2006, you asked me to 
consider additional projects that could be conducted that would be 
beneficial to Vietnam.  I have given this careful consideration and 
I am willing to authorize an additional $500,000 over a two-year 
period to conduct joint scientific research at the Dalat research 
reactor.   This would be new funding through an IAEA contract with 
VAEC. 
 
Thus, we are waiting your final decision to move forward with the 
return of Russian-origin fresh HEU fuel.  As you can see, this would 
be beneficial to the Government of Vietnam and ensure that Vietnam 
is joining the rest of the international community in returning this 
fuel.  As I discussed with representatives from the White House, we 
would like this decision to be included in the proposed Joint 
Statement in November as a concrete example of U.S. and Vietnamese 
expanded cooperation on nuclear nonproliferation. 
 
Conversion of the Dalat Research Reactor from HEU to LEU: 
 
Second, we would also like to receive final approval from the Prime 
Minister's office to move forward with conversion of the Dalat 
Research Reactor.  As I mentioned to you in our meeting, conversion 
of research reactors from the use of HEU to LEU is highly encouraged 
by the IAEA and its Members States.  There are 106 research reactors 
around the world that can currently convert from the use of HEU to 
LEU.  This is part of the IAEA's global effort to minimize the use 
of highly enriched uranium in civilian nuclear applications around 
the world while at the same time ensuring that research reactors 
continue to operate on low enriched uranium.  To date, 46 out of the 
106 research reactors have already converted to LEU fuel.  This 
include 13 research reactors in the United States, 2 research 
reactors in Libya, and research reactors located in the Czech 
Republic, Pakistan, Iran, Taiwan, and Turkey to name a few 
countries.  Discussions are underway with many other countries to 
convert the full 106 research reactors from the use of HEU to LEU. 
 
As noted above, we have developed a generous compensation package 
for Vietnam to provide 36 assemblies of replacement LEU fuel that 
would be used to begin conversion of the Dalat research reactor.  We 
have prepared a draft contract that would be signed between VAEC, 
the Russian Fuel Fabricator TVEL, and DOE.  This contract has a 
value of approximately $1.1 million which is the cost to pay the 
Russians to fabricate and deliver the replacement LEU fuel.   Thus, 
 
HANOI 00002817  003 OF 004 
 
 
by agreeing to convert, Vietnam is in essence receiving LEU fuel 
worth over $1 million.  It is also important to note that no 
government-to-government agreement is required to move forward with 
this project. 
 
Under this proposed approach, we would ensure the timely supply of 
LEU fuel to the Dalat Research Reactor and the uninterrupted 
operation of the Dalat Research Reactor.  Also, we have conducted 
extensive technical studies with your experts to ensure the safe 
operation of the Dalat Research Reactor using LEU.  Several 
technical experts from the Dalat Research Reactor visited the 
Argonne National Laboratory in 2005 to work on research reactor 
conversion calculations.  Based on the results of these 
calculations, which were presented to the Ministry of Science and 
Technology in December last year, your technical experts have 
confirmed that there are no technical issues remaining that need to 
be addressed.  Thus, we are waiting your final decision to move 
forward with the conversion of the Dalat Research Reactor from the 
use of HEU to LEU fuel.  As you can see, this would be beneficial to 
the Government of Vietnam and ensure that Vietnam is joining the 
rest of the international community in converting its research 
reactor.   As I discussed with representatives from the White House, 
we would like this decision to be included in the proposed Joint 
Statement in November as a concrete example of U.S. and Vietnamese 
expanded cooperation on nuclear nonproliferation. 
 
Return of Russian-origin spent highly enriched uranium (HEU): 
 
We also would like to reach agreement with the Government of Vietnam 
to repatriate the Russian-origin spent HEU fuel to Russia.  There 
are 104 spent HEU fuel assemblies that are currently in the core of 
the Dalat research reactor that are eligible to be returned to 
Russia.  In order to complete the spent fuel shipment, the U.S. and 
Vietnam will need to conclude an appropriate 
Government-to-Government Agreement.  As you know, in December 2004, 
and again in April 2006, the U.S. tabled a proposed agreement for a 
broad range of nonproliferation assistance, together with an 
Implementing Agreement between DOE and MOST for bilateral fuel 
return cooperation.  We recently received your diplomatic note #424 
and therefore we do not expect to reach agreement on this issue 
before the Presidential visit.  However, conclusion of a 
Government-to-Government Agreement is required in order to enable 
the U.S. to provide assistance with the proposed spent fuel 
shipment.   We are willing to pursue either the currently proposed 
Nonproliferation Assistance Agreement or alternatively an Agreement 
limited to the spent fuel return. 
 
In conclusion, I would to thank you once again for a very productive 
meeting on October 24, 2006.  As is noted above, we are waiting for 
final approval from the Prime Minister's office to move forward with 
both repatriation of the Russian-origin fresh HEU fuel and 
conversion of the Dalat Research Reactor from the use of HEU to LEU 
fuel.  I hope this letter will facilitate this decision so both of 
these items can be included as part of the Presidential Joint 
Statement in November. 
 
Sincerely, 
 
(signed) 
 
Andrew Bieniawski 
Deputy Assistant Secretary for Global Threat Reduction 
National Nuclear Security Administration 
U.S. Department of Energy 
 
cc:  Dr. Le Dinh Tien, Vice-Minister, MOST 
 Dr. Vuong Huu Tan, Chairman, VAEC 
      Dr. Nguyen Nhi Dien, Director, DNRR 
Mr. Le Hoai Trung, Acting Director, Department of International 
Organizations, Ministry of Foreign Affairs 
 
End text. 
 
Follow-up Discussions with MFA 
------------------------------ 
 
¶4.  (SBU) On October 26, 2006, NNSA staff and ESTHOff met with MFA 
International Organizations Department Acting Director Le Hoai Trung 
to discuss details of ADA Bieniawski's letter, which was delivered 
to MFA on October 25.  Mr. Trung stated that the MFA attaches "great 
importance" to the issue and is "committed" to recommending that 
MOST approve the USG proposal, "sooner rather than later."  More 
specifically, Mr. Trung indicated that a senior MFA official would 
 
HANOI 00002817  004 OF 004 
 
 
send ADA Bieniawski's letter to MOST, copying the Office of the 
Prime Minister and recommending that MOST move forward on the 
proposal without delay. 
 
¶5.  (SBU) Mr. Trung asked specific, detailed questions about the 
"mixed core" conversion and the tripartite framework under the IAEC 
contract, both of which were answered by the NNSA team with 
precision.  Mr. Trung requested that any future contractual 
arrangement to return spent Russian-origin fuel be done by "the 
simplest type of agreement."  NNSA legal counsel noted that any 
future agreement on spent fuels needs to be 
government-to-government, due to liability issues.  Counsel 
explained that such an agreement could be conducted through an 
exchange of diplomatic notes.  This would be done in lieu of signing 
a broad bilateral agreement, which the GVN has no interest in 
pursuing at this time. 
 
¶6.  (SBU) On November 2, 2006, MFA's Americas Department Deputy 
Director Le Chi Dung indicated to ESTHOff that MFA and MOST are now 
on the same page, that an approval letter from the Office of the 
Prime Minister may come as soon as early next week and that "it is 
almost a done deal."  Mr. Dung was aware that the topic would be 
discussed in a meeting between Ambassador Marine and Office of the 
Government Vice Chairman Nguyen Xuan Phuc (septel). 
 
COMMENT 
------- 
 
¶7.  (SBU) While Post awaits a written response from MFA to ADA 
Bieniawski's letter, the strong, positive language expressed by MFA 
senior officials signals a possible breakthrough on the issue and 
renewed hope that the GVN will deliver on Dalat prior to the 
President's visit.  MFA is aware that few days remain to deliver on 
several major issues, which include the Dalat conversion, and it 
remains to be seen whether inherent bureaucratic processes can be 
overcome given that the GVN's top leadership thoroughly consumed 
with preparations for Hanoi's upcoming APEC leaders' summit. 
 
MARINE