VZCZCXRO8564
RR RUEHRG
DE RUEHBR #0323/01 0671326
ZNR UUUUU ZZH
R 071326Z MAR 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 1170
INFO RUEHSO/AMCONSUL SAO PAULO 1716
RUEHRI/AMCONSUL RIO DE JANEIRO 5884
RUEHRG/AMCONSUL RECIFE 7781
RUEHBU/AMEMBASSY BUENOS AIRES 5347

UNCLAS SECTION 01 OF 02 BRASILIA 000323 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR ISN/RA, ISN/NESS, IO/T, WHA/BSC 
 
E.O. 12958: N/A 
TAGS: KNNP ENRG IAEA PREL ECON AR BR
SUBJECT: BRAZIL AND ARGENTINA COOPERATION ON URANIUM ENRICHMENT 
 
REF:  A) BUENOS AIRES 236, B) 2007 BRASILIA 2047 
 
¶1.  (U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR 
INTERNET DISTRIBUTION. 
 
¶2.  (SBU) SUMMARY.  Brazilian President Lula and Argentine President 
Kirchner met on February 22 and announced a joint effort regarding 
uranium enrichment.  This new initiative is part of Brazil's overall 
policy of reinvigorating its nuclear activities.  On a related note, 
Brazil still has concerns over accepting an IAEA Additional Protocol 
and now sees waning interest in such an Additional Protocol on the 
part of Argentina.  END SUMMARY. 
 
¶3.  (SBU) On February 27, 2008, Environment, Science, Technology and 
Health (ESTH) Counselor met with the Deputy Director of the Ministry 
of External Relations' Department of Disarmament and Sensitive 
Technologies, Counselor Luiz Fernando Abbott Galvao, to discuss, 
among other things, Brazil-Argentina nuclear cooperation.  The 
prospects for such cooperation have recently increased dramatically 
(See REFTEL A). 
 
¶4.  (SBU) In recent years, Brazilian-Argentine bilateral nuclear 
cooperation had been a rather quiet, routine matter.  The 
Brazilian-Argentine Agency for Accounting and Control of Nuclear 
Materials (Agencia Brasileiro-Argentina de Contabilidade e Controle 
de Materiais Nucleares or ABACC) would meet regularly once a 
quarter.  ABACC has its headquarters in Rio de Janeiro, and it 
provides on-site inspections of nuclear facilities in Argentina and 
Brazil and maintains an inventory of nuclear material in each 
country. 
 
¶5.  (SBU) Lately, however, energy has become a front-burner topic in 
both countries.  Brazil has announced ambitious plans to build new 
electric generation facilities, including hydroelectric facilities 
(some in cooperation with Argentina and Bolivia), and a third 
nuclear reactor at Angra (1MW), which would increase total capacity 
from nuclear reactors to more than 3MW.  One major hurdle is that 
there is an outstanding contract from the 1970s to build the third 
reactor.  According to World Bank contacts, the Brazilian government 
is faced with quandary of honoring the contract and building a 
1970's reactor or wasting an entire warehouse of already purchased 
equipment.  Articles have appeared in the Brazilian press warning of 
possible energy shortfalls in the near and medium term due to lack 
of rainfall for hydropower and increasing demand.  However, national 
energy plans from now until 2011 show static levels of 
nuclear-generated energy, remaining at 2MW of the over 109MW 
capacity projected for 2011. 
 
¶6.  (SBU) For its part, Argentina has confronted energy shortages in 
recent years.  During a February 21-23 visit by Brazilian President 
Luiz Inacio Lula da Silva to Argentina, Argentine President Cristina 
Kirchner asked for help to meet Argentina's energy needs. 
Specifically, Kirchner asked Brazil to provide Argentina with some 
of the natural gas supplied to Brazil by Bolivia.  Lula demurred on 
the natural gas, though he offered to help with electricity. 
Reports in the Argentine press that nuclear cooperation would extend 
to joint development of a nuclear powered submarine have been denied 
by the Brazilian Ministry of Defense.  COMMENT: It is difficult to 
imagine what contribution Argentina could make to Brazil's submarine 
program.  END COMMENT. 
 
¶7.  (SBU) The Lula Administration seeks to expand its activities in 
the nuclear area:  building more nuclear reactors; completing the 
enrichment cycle; developing its uranium sector; and increasing 
cooperation with other countries (e.g., India - see REFTEL B).  In 
this vein, as highlighted in REFTEL A, Lula and Kirchner in their 
February 22 meeting announced a program of joint cooperation in the 
field of uranium enrichment.  The pertinent parts of the text of the 
announcement are in paragraph 10 below. 
 
¶8.  (SBU) Galvao explained that the idea was to set up a joint 
enterprise to enrich uranium.  Its first priority would be to supply 
the nuclear fuel supply needs of the two countries.  However, he 
envisioned the joint enterprise becoming a supplier for other 
countries.  Brazil has the uranium reserves to become a major 
nuclear fuel supplier.  It ranks sixth in global uranium reserves 
behind Kazakhstan, Australia, South Africa, the United States, and 
Canada.  When asked what Argentina would bring to the joint effort 
on enrichment (such as uranium, money, or expertise), Galvao did not 
have a clear answer and seemed unsure. 
 
FADING INTEREST IN AN IAEA ADDITIONAL PROTOCOL? 
 
¶9.  (SBU) Galvao said that the cabinet had not decided whether to 
accept an IAEA Additional Protocol.  He noted that, among other 
things, the Ministry of Defense had unspecified concerns over an 
 
BRASILIA 00000323  002 OF 002 
 
 
Additional Protocol.  He recognized that Argentina was unlikely to 
agree to an Additional Protocol unless Brazil were to do so.  Galvao 
went on to say that in the latest round of bilateral meetings on 
nuclear matters (ABACC), Brazil detected waning interest on the part 
of Argentina in an Additional Protocol, but he did not provide 
details on why he thought interest was less. 
 
KEY PORTIONS OF JOINT ANNOUNCEMENT 
 
------------------- 
¶10.  (U) BEGIN TEXT 
------------------- 
 
President Luiz Inacio Lula da Silva's visit to Argentina - February 
21 through 23, 2008 - Casa Rosada Declaration 
 
On February 22, 2008, accepting an invitation from the President of 
the Republic of Argentina Cristina Fernandez de Kirchner, the 
President of the Federative Republic of Brazil, Luis Inacio Lula da 
Silva made an official visit to Argentina where both countries 
reviewed their broad bilateral relations. 
 
+  +  + 
 
President Lula and President Cristina Kirchner agreed to: 
 
¶B. Sub commission of Energy, Transports and Infra-structure 
 
+  +  + 
 
¶7. Nuclear Cooperation 
 
Determine the competent organs of Brazil and Argentina to create a 
bi-national commission, responsible for the development of a nuclear 
reactor model that meets the needs of the electrical systems of both 
countries and, eventually, the region's. And to also determine, by 
August 2008, that the bi-national commission prepare a specific 
action report for this purpose. 
 
Determine that the competent entities elaborate, on the same 
deadline, a common project in the area of nuclear fuel cycle and 
also elaborate, by August 2008, a specific action report for this 
purpose. 
 
Express the intention to build a bi-national company for the 
enrichment of uranium.  With this goal, instruct the competent 
organisms and initiate the necessary negotiations within the next 
120 days. 
 
Determine the realization, by May of 2008, of a seminar for 
Brazilian and Argentine researchers to discuss the strategy for 
future cooperation in the nuclear field, as well as to identify 
concrete projects of bilateral cooperation, including gathering 
mutual capacity needs in terms of human, technology and financial 
resources, as well as regarding industrial complementation material. 
 
 
Schedule 
 
March 1: Bi-national Commission Meeting. 
 
May 7: Bi-national Technical Seminar. 
 
By the end of June: Begin negotiation for the constitution of a 
bi-national company for the enrichment of uranium. 
 
August 30: Presentation of specific reports. 
 
-------- 
END TEXT 
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CHICOLA