VZCZCXYZ0001
OO RUEHWEB

DE RUEHGB #0591/01 0601233
ZNY SSSSS ZZH
O 291233Z FEB 08 ZFF6
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5968
INFO RUEHAM/AMEMBASSY AMMAN IMMEDIATE 1484
RUEHFR/AMEMBASSY PARIS IMMEDIATE 0162
RUEHUNV/USMISSION UNVIE VIENNA IMMEDIATE 0058
RHEBAAA/USDOE WASHDC IMMEDIATE
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE

S E C R E T BAGHDAD 000591 
 
SIPDIS 
 
SIPDIS 
 
NEAI: RSCHMIERER 
NEA/I: PM: TBETTS 
ISN/RA:KKESSLER 
S/I:KNUTT 
L/NPV:THISCH 
DOE: JSELLEN 
JS: SNORWOOD 
OSD: TBENNET 
 
E.O. 12958: DECL: 02/24/2018 
TAGS: ECON ENRG PARM PREL POL EXEC
SUBJECT: TUWAITHA BUYER UPDATE: POST PARIS MEETING 
 
REF: A. STATE 163968 
     ¶B. BAGHDAD 4126 
     ¶C. STATE 169324 
     ¶D. BAGHDAD 2454 
     ¶E. BAGHDAD 1787 
     ¶F. BAGHDAD 734 
     ¶G. BAGHDAD 004227 
     ¶H. BAGHDAD 00410 
     ¶I. BAGHDAD 00427 
 
Classified By: Ambassador Charles Ries for Reasons 1.4 (B),  (D) and (H 
) 
 
1.(S) Summary: Ambassador Ries met with Minister of Science 
and Technology (MOST) Raid Jahid (FAHMI) on February 22, 2008 
at the Al Rasheed Hotel. Fahmi debriefed his Paris meetings 
with the three potential yellowcake buyers, Cameco, Areva and 
GE-Hitachi. Cameco and GE bid on the material. Cameco, the 
higher bid, set Feb. 29 as the date by which MOST must accept 
the deal or lose the price and conditions. GE provided its 
written bid but Areva will not be ready until mid-March. 
Fahmi wants the Areva bid by Feb 25 so he will have three, 
avoiding the need for a waiver of the GOI procurement 
requirements and preserving the Cameco bid option. Ries cited 
US costs of $55 M to date for Tuwaitha and estimated that the 
cost share should be $24M. Citing an independent cost study 
that the entire project should be about $17 M, Fahmi said he 
could not make a case to the Council of Ministers (COM) for 
that amount. Fahmi asked if the US could meet Cameco's 
required delivery date of May 30, 2008. Ries and the MNF-I 
representative confirmed the US could meet the date. Fahmi 
asked for Ries help to develop a long-term nuclear energy 
relationship with the US. Ries recommended that the GOI raise 
the issue in the on-going U.S.- Iraq Long-term Security 
Relationship discussions. End Summary 
 
Paris 
 
¶2. (S) Fahmi openly discussed the discussions he had had with 
each of the prospective buyers in Paris, naming Cameco as the 
best bid, GE as low and the conversation with Areva as "only 
ten minutes on the deal."  In addition to accepting key 
conditions the GOI requested, such as staged payments and an 
agreed fixed price, Cameco also followed up quickly with a 
written proposal detailing the Paris meeting results.  Cameco 
set Feb. 29 as the time limit for MOST to accept the deal as 
outlined in Paris. After the 29th, both the price and 
conditions would need to be re-negotiated.  Fahmi described 
the GE bid as low, commenting that GE called itself a big 
company in the world and, in regard to staged payments, "did 
not do it that way." MOST has asked GE to submit its best 
offer. Note: MOST confirmed later in the day GE did submit 
its bid. End Note) Fahmi believes that the difference in bids 
between Cameco and GE is based on Cameco being a producer, GE 
a trader.  Cameco can buy and hold the yellowcake whereas GE 
is looking for a quick sale.  Areva reportedly said it would 
take two weeks to finalize and provide its bid. Fahmi, 
primarily focused on preserving the Cameco option, has asked 
Areva for its proposal by Feb. 25. His goal is to have all 
the bids in hand and go to the COM by Feb 29. 
 
Cost Sharing/Committee Decision/Council of Ministers 
 
¶3. (S) Ries commented that the situation today looked better 
than it had a month ago. Even though the GE bid is low, Fahmi 
can go to the COM with two and possibly three bids. Now the 
US is ready to discuss cost sharing.  Handing Fahmi a one 
page summary, Ries noted that US costs to date were $55 M and 
that did not include the air transportation of the material 
to a buyer. Fahmi responded that he had an independent 
assessment done of the cost for the entire project which, 
using Iraqi labor, totaled $17 M. Fahmi cannot go to the COM 
arguing that even half that sum is going to the US in cost 
sharing. Ries stated that $24 M would be an amount sufficient 
to satisfy Washington and pointed out that MOST was receiving 
additional funds from the US. He had just approved $300 K to 
help Iraq select a replacement capability for the irradiators 
removed in January. Fahmi said he would discuss the amount of 
cost share with his Committee.  Regarding how to make the 
payment to the US, Ries and Fahmi agreed that either the 
buyer could pay the US or the funds could be deducted from 
the DFI. 
 
¶4. (S) Fahmi asked if the US could meet the Cameco May 30, 
2008 delivery date to Canada. A key part of his briefing to 
the COM will be to state that the US can support the delivery 
date. Col Henderson, MNF-I, outlined several steps necessary, 
such as an interim move from Tuwaitha to Slayer near the 
Baghdad Airport, that would both save funds, reduce the 
security risks and speed delivery to the buyer. Fahmi agreed 
with the steps outlined and Ries stated that the US could 
meet the delivery date.  Fahmi reiterated that his goal is to 
discuss the bids with his Committee on Tuesday, Feb. 26 and 
to brief the COM by Feb. 29. Ries urged Fahmi to move quickly 
and assured him that if he could brief the COM by Feb. 29, 
then he would work with Washington to finalize cost sharing 
and push for the necessary steps to deliver the material to 
the buyer. 
 
Long-term U.S.-Iraq Nuclear Cooperation 
 
¶5. (S) As he has in previous discussions, Fahmi asked about 
establishing a long-term nuclear relationship between the 
U.S. and Iraq, stressing how important this is to the GOI. 
Ries responded that the GOI may wish to raise this as an 
issue in the U.S.-Iraq Long Term Security Relationship 
dialogue, although he noted that nuclear cooperation 
agreements can take an extended period of time to negotiate. 
 
Access to Tuwaitha Area B 
 
¶6. (S) Fahmi stated that the Iraqi Ministry of Agriculture 
had collected a number of radiation sources and MOST needed 
access to the Tuwaitha site to properly store them.  They are 
now in temporary storage and MOST would like to move them as 
soon as possible. Parks responded that the US will provide 
suggested procedures for access next week. Those procedures 
should allow for relatively quick access based on 
coordination with Col Ra'ad at the site.  Fahmi thanked Parks 
and reiterated it was important to move the sources into the 
site soon. 
 
Status of MOST Senior Deputy Minister Dr. Samir Attar 
 
¶7. (S) MOST Senior Deputy Minister Dr. Samir (ATTAR) was 
wounded in an IED attack on his vehicle en route to work at 
MOST on Wednesday, Feb. 20, 2008. Immediately afterwards, 
AMB. Ries authorized US treatment for his wounds and he was 
admitted to US Combat Support Hospital in the International 
Zone for initial treatment and medically evacuated to the 
USAF Hospital at Balad to treat his left eye. He has been 
released and is expected to recover sight in the injured eye 
almost fully within six months. Fahmi was very thankful for 
the help provided by the US. He stated that the attack on 
Attar was targeted and that others in MOST had received death 
threats during the week. Ries stated that he hoped Dr. Attar 
would recover quickly and that he was glad the U.S. could 
assist. 
 
Next Steps 
 
¶8. (S) Ries and Fahmi agreed to talk via telephone over the 
next few days to finalize cost sharing and other issues as 
necessary. 
 
Attendees 
 
GOI 
Raid Jahid Fahmi, Minister of Science and Technology 
 
U.S. 
Ambassador Charles Ries, Minister for Economic Affairs 
Edgar Parks, Energy Attach, U.S. Embassy 
Robert Boudreau, NNSA Representative, U.S. Embassy 
Col James Henderson, USA, MNF-I 
CROCKER