VZCZCXRO9825
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHMO #5591/01 3340741
ZNR UUUUU ZZH
P 300741Z NOV 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5562
INFO RUCNCIS/CIS COLLECTIVE
RUEHII/VIENNA IAEA POSTS COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC

UNCLAS SECTION 01 OF 02 MOSCOW 005591 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KNNP IAEA PREL RS
SUBJECT: ANGARSK INTERNATIONAL URANIUM ENRICHMENT CENTER: 
MOVING FORWARD 
 
 
Sensitive but unclassified; please protect. 
 
Summary 
-------- 
 
¶1. (SBU)  Russia's plan to establish an international uranium 
enrichment center in Angarsk (Siberia) -- which stems from a 
Putin proposal made almost two years ago -- is moving 
forward.  Russian officials and experts are confident in the 
ability of the Angarsk facility to handle increased demand 
for enrichment services.  Kazakhstan has signed on as a ten 
percent owner.  Russia is approaching other potential 
partners and consulting on modalities with the IAEA.  Embassy 
has requested to visit the facility in December.  End Summary. 
 
Background: A Putin Initiative 
------------------------------ 
 
¶2. (U) In January 2006, President Putin proposed the creation 
of international uranium enrichment centers as a way to allow 
countries pursuing nuclear power to have increased access to 
nuclear fuel consistent with nonproliferation goals.  In 
September 2006, Rosatom announced plans for the establishment 
of such a center at the Angarsk Electrolysis Chemical Combine 
in Siberia, one of four uranium enrichment facilities 
operating in Russia.  The facility would operate under IAEA 
safeguards and be open "to all IAEA member states which meet 
nuclear arms non-proliferation requirements."  Following the 
signature of an intergovernmental agreement between Russia 
and Kazakhstan, Kazatomprom agreed to assume a ten percent 
ownership share of the Angarsk center. 
 
TENEX: Looking For More Partners 
-------------------------------- 
 
¶3. (SBU) On November 16, EST Counselor and DOE Moscow Office 
Deputy Director met with Aleksey Grigoriev, General Director 
of the state-owned uranium services company Tenex (which is 
under the Atomenergoprom umbrella).  Grigoriev's 
responsibilities include serving as director of the Angarsk 
international enrichment center project.  Grigoriev 
underlined to us that the Angarsk concept and the Global 
Nuclear Energy Partnership (GNEP) shared common goals.  He 
said his main task as director of the Angarsk project was to 
"turn Putin's words into reality."  He reported good progress 
toward that end, including recent moves to provide the 
Angarsk center's headquarters in Moscow with dedicated staff 
and budget.  (Previously, he said, staff working on the 
Angarsk project had been on loan from other offices.) 
 
¶4. (SBU) Tenex currently holds 90% of the ownership of the 
Angarsk center.  Grigoriev told us Kazakhstan would likely 
put up the money to cover its ten percent stake by the end of 
the year.  He noted that Kazakhstan may also provide supplies 
of natural uranium for the center's operations.  Grigoriev 
emphasized to us that Tenex was actively holding talks with 
other potential partners.  He cited Armenia as the most 
likely next shareholder.  He listed Ukraine, South Korea, 
Finland and Japan as among other prospects. 
 
¶5. (SBU) Grigoriev told us that the equity stake for new 
shareholders would come from Tenex's 90% share.  The goal is 
to take Tenex down, eventually, to 51%.  Grigoriev confessed 
that Tenex was still working out the center's business plan. 
Tenex may, at least initially, subsidize the price of 
enrichment services to attract clients.  Clients of the 
center do not necessarily have to become shareholders. 
However, Grigoriev explained that shareholders would be first 
in line for supplies and get a share of any profits. 
 
IAEA/Nonproliferation Role Central 
---------------------------------- 
 
¶6. (SBU) Grigoriev underlined the importance of the IAEA's 
role.  IAEA teams have been out to visit Angarsk.  All 
activities, including delivery and disposal of fuel, would 
take place under IAEA safeguards.  Russia and the IAEA would 
guarantee supplies and services from the center as long as 
the clients abide by IAEA requirements.  Grigoriev said that 
to advance nonproliferation goals, Russia understood that the 
price for enrichment services had to be attractive.  However, 
at least as important for potential clients -- he cited 
Vietnam or Indonesia as examples -- are guarantees from 
Russia and the IAEA regarding supplies. 
 
Capacity in Angarsk: Not a Problem 
---------------------------------- 
 
¶7. (SBU) Grigoriev assured us that the Angarsk center has 
 
MOSCOW 00005591  002 OF 002 
 
 
ample capacity to meet projected demand.  A variety of 
experts with whom we have spoken in recent weeks -- including 
nuclear scientists intimately familiar with the facility -- 
agree.  Kurchatov Institute Vice President Nikolay 
Ponomarev-Stepnoi told us that a major advantage of Angarsk 
from a non-proliferation perspective is that it is an 
existing national facility with spare capacity.  He is 
convinced Angarsk has sufficient capacity to meet existing as 
well as projected demand for enrichment services.  Nikolay 
Laverov, Vice President of the Russian Academy of Sciences 
(and a nuclear scientist), agreed that excess capacity at 
Angarsk was more than sufficient to meet demand.  If future 
demand required, Laverov envisioned expanding capacity 
through outside participation.  Anton Khlopkov, Executive 
Director of the Center for Policy Studies (PIR) told us he 
understood plans were underway to triple the enrichment 
capacity at Angarsk by 2015. 
 
Comment 
------- 
 
¶8. (SBU) The Angarsk initiative underlines Russian leadership 
in nonproliferation while opening up a potentially lucrative 
market in nuclear fuel services.  There is momentum behind 
the project, although establishment of the center has likely 
been slowed by Rosatom's ongoing reorganization.  Embassy is 
awaiting a reply from Rosatom on our request to visit the 
site the week of December 17. 
BURNS