VZCZCXRO2707
PP RUEHAST
DE RUEHTA #1730/01 1730351
ZNR UUUUU ZZH
P 220351Z JUN 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9891
RUEBAAA/DEPT OF ENERGY WASHDC
INFO RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 02 ASTANA 001730 
 
SIPDIS 
 
DEPARTMENT FOR ISN, SCA/CEN (M. O'MARA), SCA/RA (A. CUMMINGS) 
 
DOE/NNSA FOR BIENIAWSKI/CUMMINS/KENNEDY 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PTER KGIC MCAP PTER KNNP KZ
SUBJECT: KAZAKHSTAN REQUESTS IMPLEMENTING ARRANGEMENT ON ALL ALATAU 
ACTIVITIES 
 
REF:  ASTANA 219 
 
¶1. (SBU) Summary:  In a June 12 meeting in Astana, Vice Minister of 
Energy and Mineral Resources Satkaliyev told Assistant Secretary 
Rood and Deputy Administrator Tobey that Kazakhstan preferred to 
sign an Implementing Arrangement covering all Department of Energy 
activities at the Institute of Nuclear Physics, rather than handling 
the various projects (downblending of fresh fuel, spent fuel return, 
and reactor conversion) in different ways.  Satkaliyev also reported 
that the Kazakhstani side was not yet ready to sign the communique 
on discussion of permanent disposition of the BN-350 spent fuel. 
End summary. 
 
¶2.  (U) On the margins of the third meeting of the Global Initiative 
to Combat Nuclear Terrorism in Astana, Assistant Secretary for 
International Security and Nonproliferation John Rood and DOE Deputy 
Administrator for Defense Nuclear Nonproliferation William Tobey met 
with Vice Minister of Energy and Mineral Resources Almasadam 
Satkaliyev on June 12 to discuss pending non-proliferation issues. 
Satkaliyev was joined by Timur Zhantikin, Chairman of the 
Kazakhstani Atomic Energy Committee; Kairat Kadyrzhanov, Director of 
the National Nuclear Center; and Almaz Tulebayev and Bakhyt 
Shaikhislamova from MEMR.  Andrew Bieniawski and Pol-Econ Chief 
(notetaker) also participated. 
 
------------------------------------------ 
Communique on BN-350 Permanent Disposition 
------------------------------------------ 
 
¶3. (SBU) Satkaliyev told A/S Rood and Deputy Administrator Tobey 
that the communique negotiated during the January discussions on 
permanent disposition of BN-350 spent fuel (reftel) was undergoing 
required interagency clearance, but MEMR was doing everything 
possible to move it forward and was optimistic that it would soon be 
approved.  He asked for clarification of the impact of the 
communique on the existing bilateral agreement on the disposition of 
BN-350 fuel, signed in 1997. 
 
¶4. (SBU) Tobey explained that the communique would not change the 
existing agreement in any way.  The U.S. remains fully committed to 
the fuel move, and anticipates full FY08 funding.  The communique 
would guide only the efforts of a working group examining permanent 
disposition options after the fuel move.  Tobey offered to send a 
letter reiterating that signing the BN-350 Communique would in no 
way undermine or impact the U.S. commitment to move the BN-350 spent 
fuel to Baikal-1 by 2010.  Satkaliyev expressed appreciation for the 
clarification, commenting that it would help him resolve certain 
interagency concerns. 
 
------------------------------------- 
Downblending of Fresh HEU from Alatau 
------------------------------------- 
 
¶5. (SBU) Tobey noted that despite President Nazarbayev's agreement 
during his September 2006 visit to Washington on the downblending of 
fresh HEU from the Alatau research reactor at the Institute of 
Nuclear Physics, the project has not moved forward. 
 
¶6. (SBU) Satkaliyev noted that negotiations between DOE and the 
Institute of Nuclear Physics on converting the reactor from HEU to 
LEU use were proceeding well.  He stressed that the reactor was very 
important to Kazakhstan's economy, as it produced isotopes and other 
medical products.  Kazakhstan is nevertheless ready to hear more 
about the U.S. proposal and financing.  Tobey responded that the 
Kazakhstani side's concerns were justified, and the U.S. is prepared 
to address them.  The conversion itself would have a minimal impact 
on reactor operations. The Nuclear Threat Initiative was prepared to 
cover $1.3 million of the cost, and DOE was prepared to contribute 
$2 million for technical support (including $1.3 million for a 
laboratory and $700,000 for two separate projects) and to purchase a 
new supply of LEU, at a cost of approximately $3-4 million. 
Kazakhstan will also be able to keep the LEU resulting from the 
blenddown, Tobey added. 
 
¶7. (SBU) Satkaliyev indicated that the proposal was very good.  He 
promised to discuss the proposal with his colleagues at MEMR and the 
Institute of Nuclear Physics.  A written agreement spelling out the 
parties involved, the financing, the timeline, and technical 
questions was needed, he added.  Tobey replied that the U.S. 
believed that the 1993 CTR Umbrella Agreement and the Materials 
Protection, Control, and Accounting (MPC&A) agreement, together with 
DOE's contract with the Ulba Metallurgical Factory to perform the 
downblending, provided sufficient legal basis for the project. 
 
¶8. (SBU) Satkaliyev agreed that the CTR Agreement and MPC&A were 
 
ASTANA 00001730  002 OF 002 
 
 
relevant, but pushed back that, as with other DOE projects, a 
separate Implementing Arrangement was needed for the work at Alatau. 
 Although the Kazakhstani interagency clearance process for such an 
agreement would be lengthy, Satkaliyev said, it would take no longer 
than obtaining approval to move forward with the project in the 
absence of an agreement.  He promised to push the interagency 
process to move as quickly as possible; after he received a draft it 
would take his experts approximately two months to review the text 
and predict a timeline for signature.  Tobey thanked Satkaliyev for 
his openness and agreed to submit a new draft Implementing 
Arrangement covering all the work at the Institute of Nuclear 
Physics. 
 
ORDWAY