VZCZCXRO2794
RR RUEHDU
DE RUEHSA #3012/01 2410752
ZNR UUUUU ZZH
R 290752Z AUG 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 1409
INFO RUEHBJ/AMEMBASSY BEIJING 0646
RUEHLO/AMEMBASSY LONDON 1270
RUEHMO/AMEMBASSY MOSCOW 0654
RUEHFR/AMEMBASSY PARIS 1143
RUEHUL/AMEMBASSY SEOUL 0214
RUEHKO/AMEMBASSY TOKYO 0492
RUEHTN/AMCONSUL CAPE TOWN 4744
RUEHDU/AMCONSUL DURBAN 9096
RUCPDC/DEPT OF COMMERCE WASHDC
RUEHUNV/USMISSION UNVIE VIENNA 0203
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 PRETORIA 003012 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/S, EEB/CBA, ISN 
DOE FOR SPERL, PERSON, BIENAWSKI, AND PARKER 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY KNNP PREL ECON SF
SUBJECT: SOUTH AFRICA REAFFIRMS ITS NUCLEAR ENERGY POLICY 
TO INCREASE RELIANCE ON NUCEAR POWER 
 
REF: A. PRETORIA 2494 
     ¶B. PRETORIA 317 
 
 ¶1.  (SBU) SUMMARY: South Africa released a new draft nuclear 
energy policy on August 13 for public comment.  The draft 
policy reaffirms SAG commitment to expanding nuclear power 
generation from the current 6 percent to 15 percent of 
electric power generation by 2025, lessening dependence on 
coal and taking advantage of significant uranium reserves. 
Targeting the long-term goal of self-sufficiency in aspects 
of the nuclear fuel cycle, the policy considers possible 
recycling of spent nuclear fuel and rebuilding South Africa's 
enrichment capacity.  The SAG stressed that enrichment would 
solely be for peaceful purposes, with the aim of producing 
nuclear fuel for South Africa's own reactors and for the 
international market.  Westinghouse views the policy as a 
positive step for its pursuit of contracts for constructing 
new nuclear power plants in South Africa (Ref B).  South 
Africa could be a partner in providing comprehensive fuel 
services to other partner countries.  This might help limit 
the spread of nuclear enrichment capabilities to other 
countries.  END SUMMARY. 
 
¶2.  (SBU) South Africa Department of Minerals and Energy 
(DME) Director General Sandile Nogzina and Chief Director: 
Nuclear Tseliso Maqubela announced the release for public 
comment of the SAG's new draft policy on nuclear energy on 
August 13, 2007.  According to the draft document, the policy 
aims to expand nuclear power generation within South Africa's 
electricity mix (from the current 6 percent to 15 percent of 
power generation by 2025), to diversify dependence on coal, 
to address climate change concerns, to take advantage of the 
country's significant uranium deposits, and to create jobs. 
In addition, the policy considers possible recycling of spent 
nuclear fuel and rebuilding South Africa's uranium enrichment 
capacity, originally developed for nuclear weapons, but 
voluntarily dismantled before 1994.  The SAG stressed that 
enrichment would be for peaceful purposes, with the aim of 
producing nuclear fuel for South Africa's own nuclear 
reactors and for the international market.  State electricity 
company ESKOM would be tasked to put in place additional 
conventional nuclear power stations and to bring to fruition 
experimental pebble bed reactors.  The announced policy 
builds on President Thabo Mbeki's expression in the February 
State of the Nation address of commitment to increase South 
Africa's reliance on nuclear and renewable energy sources. 
Building on previous law and white papers, the SAG unveiled 
the draft nuclear energy policy for 60-day public comment 
with the aim of finalizing the policy by the end of the year. 
 A full copy of the draft was e-mailed to AF/S on August 28. 
 
¶3.  (SBU) Westinghouse, which is competing for new nuclear 
power plant construction in South Africa, found the draft 
nuclear energy policy paper a positive step.   The company 
intends to submit brief positive comments during the 60-day 
comment period.  The local Westinghouse General Manager Rita 
Bowser highlighted the following points to Energy Officer in 
a meeting on August 22: 
 
-- The policy assigns the building of new reactors (new 
build) to state electricity company ESKOM and assigns uranium 
management and value-chain issues to the Nuclear Energy 
Corporation of South Africa (NECSA), separating the new build 
aspect of reactors from the more controversial and political 
aspects of fuel enrichment and production.  The Pressurized 
Water Reactor (PWR) procurement does not contain requirements 
for enrichment or reprocessing.  Therefore, Westinghouse 
would not be required to participate in enrichment or 
reprocessing. 
-- The policy specifies PWR technology for new build, 
consistent with Westinghouse,s expectations. 
-- The policy addresses the full gamut of "cradle-to-grave" 
production, from ore production to spent fuel disposal, 
including exercising better control over uranium ore for 
export purposes to increase benefits to the domestic economy. 
-- The SAG aims to guide actions to develop, promote, and 
sustain the nuclear sector in South Africa.  The SAG commits 
 
PRETORIA 00003012  002 OF 002 
 
 
to providing adequate funding to implement its new policy. 
 
Westinghouse perceives itself as well positioned for gaining 
the nuclear plant construction opportunity given its 
competence and commitment in price, technology transfer, 
nuclear safety, the modular size of its reactor, and 
localization (i.e., working closely with local suppliers and 
engineering services to fill existing gaps in South Africa,s 
nuclear service sector).  Its probable comments to the SAG 
may highlight localization, thus playing to its strength. 
 
¶4.  (SBU) DME Chief Director: Nuclear Tselio Maqubela told 
the Embassy energy team on August 27 that the new policy was 
comprehensive and serious.  Recognizing that enrichment was 
inherently political, he noted that bidding companies should 
focus on supplying reactors and fuel.  Elsewhere, in multiple 
conversations with Energy Officer, industry observers have 
noted that much of the policy was not new, and was a 
repackaging of existing policy. 
 
¶5.  (SBU) COMMENT: The SAG,s newly launched policy paper 
represents a significant step forward for South Africa,s 
commitment to increasing its reliance on nuclear power.  The 
prospect of vigorous competition with French AREVA means that 
the USG must present itself as a reliable nuclear energy 
partner if Westinghouse is to be awarded the contract. 
Mission reiterates Ref A recommendation that Energy Secretary 
Bodman consider signing the proposed U.S.-S.A. Nuclear R&D 
Cooperation Agreement to demonstrate high level USG support 
for this contract.  In addition, South Africa could be a 
partner in providing comprehensive fuel services to other 
partner countries.  This might help limit the spread of 
nuclear enrichment capabilities to other countries. 
Teitelbaum