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R 101953Z OCT 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 2648
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 6744
RUEHSO/AMCONSUL SAO PAULO 2906
RUEHRG/AMCONSUL RECIFE 8580
RUEHUNV/USMISSION UNVIE VIENNA 0124
RHEBAAA/DEPT OF ENERGY WASHDC

UNCLAS SECTION 01 OF 03 BRASILIA 001354 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY KNNP IAEA BR
SUBJECT: BRAZIL:  UPDATE ON BRAZIL'S AMBITIOUS CIVIL NUCLEAR ENERGY 
PROGRAM 
 
¶1.  (U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR 
INTERNET DISTRIBUTION. 
 
¶2.  (SBU) SUMMARY.  The Government of Brazil (GOB) has ambitious 
plans for Brazil's nuclear renaissance.  It intends to complete 
construction of its third nuclear power plant (Angra 3) located near 
Rio de Janeiro and to construct an additional four to eight reactors 
by 2014 in order to keep up with domestic demand.  Deputy Minister 
of Mines and Energy Marcio Zimmermann said that Brazil wants 
American involvement in building the new plants.  There is an active 
discussion about additional reactors coming on line after 2014.  In 
addition, the GOB is seeking to establish the capability and 
capacity to produce nuclear fuel for domestic consumption.  The GOB 
is also considering the creation of a separate state-entity to 
monitor and regulate nuclear energy.  Further, the GOB is already 
grappling with the issue of the disposition of nuclear waste, which 
will become more severe with additional reactors.  END SUMMARY. 
 
BUILDING MORE REACTORS 
 
¶3.  (SBU) Brazil currently has two nuclear power plants, Angra 1 and 
Angra 2, located at Angra dos Reis in the State of Rio de Janeiro. 
These two reactors generate a combined 1,900 megawatts of power and 
contribute to three percent of Brazil's energy.  Angra 3, which will 
be co-located with the two existing reactors, will add 1,200 
megawatts.  State-owned Eletronuclear, which is a subsidiary of 
Eletrobras, currently operates Angra 1 and Angra 2 and will be 
responsible for Angra 3 as well.  Financing of Angra 3 is estimated 
at USD 1.8 billion, and the GOB is still seeking a strategic partner 
to assist in financing the reactor.  On July 23, Environment 
Minister Carlos Minc placed conditions on granting the licenses for 
the construction of Angra 3 through the Brazilian Institute of 
Environment and Renewable Natural Resources (IBAMA).  According to 
Dr. Laercio Vinhas, Director of the Radiation Protection and Nuclear 
Safety Directorate of the Brazilian National Nuclear Energy 
Commission (CNEN), CNEN is confident that Minc's conditions will not 
interfere with the construction of Angra 3.  The preliminary IBAMA 
license number 279 imposed 60 conditions for the construction of 
Angra 3, with the most salient being the disposition of nuclear 
waste.  At the end of September, IBAMA finally gave permission to 
start construction.  CNEN, which licenses and oversees the operation 
of reactors, had given permission for construction of Angra 3 years 
ago at the time it approved Angra 2 in the 1990's. 
 
¶4.  (SBU) The GOB has announced its plans to expand the number of 
nuclear reactors in Brazil by 2014.  By that date, the GOB has said 
publicly that it intends to expand its nuclear energy production to 
make up five percent of Brazil's energy matrix.  Dr. Vinhas of CNEN 
believes this will require the construction of four to eight 
reactors, depending on projected economic growth and energy demand. 
In separate meetings with Acting Deputy Secretary of Energy Jeffrey 
Kupfer and DCM Lisa Kubiske, Deputy Minister of Mines and Energy 
Marcio Zimmermann said that Brazil is planning to build four to six 
new plants and that Brazil wants American involvement in building 
the new plants.  He recalled that Westinghouse had originally been 
involved in building the first Brazilian plant and that Brazil was 
eager to see U.S. firms reengage.  (NOTE: There already is some 
bilateral commercial interaction taking place in the nuclear field. 
Marcelo M. Susini Ribeiro, advisor to the director of Nuclear Fuel 
Production at Brazilian Nuclear Industries (INB), the civilian 
company that runs Brazil's current enrichment facility at Resende 
near Rio de Janeiro, told Econoff that his Director, Samuel Fayad 
Filho, travelled to Pittsburgh September 24 - 28 for meetings with 
Westinghouse. END NOTE.) 
 
¶5.  (SBU) For the longer-term, i.e., the period after 2014, the GOB 
is considering bringing on even more reactors.  Minister of Mines 
and Energy Edison Lobao was quoted by Brazilian newspapers as 
suggesting that Brazil would build 50 or 60 nuclear reactors by 
¶2030.  This proposal was dismissed by CNEN as unfeasible and 
unnecessary.  Moreover, Environment Minister Minc - a staunch 
anti-nuclear activist - said that Lobao was expressing only his 
personal opinion and not the view of the government.  Eletronuclear, 
however, has submitted a study to President Luiz Inacio Lula da 
Silva to urge that the large-scale expansion of Brazil's nuclear 
energy infrastructure commence soon.  If Eletronuclear is to meet 
its target of generating six gigawatts of nuclear power by 2030, as 
called for in Brazil's National Energy Plan 2030- which specifies 
that 6,000 megawatts of nuclear energy be available by that date, it 
believes that construction must begin right away.  Thus far, four 
states in the northeast have expressed interest in housing the 
future power plants, including Bahia, Sergipe, Alagoas and 
Pernambuco.  Press reports indicate that the GOB is looking at 
proposals to build six new reactors of 1,000 megawatts generating 
capacity, and sites in the southeast of Brazil are being considered 
for new plants.  Projections indicate construction on the first two 
 
BRASILIA 00001354  002 OF 003 
 
 
northeast reactors might begin by 2019 and 2021, with the southeast 
ones by 2023 and 2025.   Energy Minister Lobao has stated that 
Brazil would need 50,000 to 60,000 megawatts of nuclear capacity by 
2050, which could explain his comment on the need for 50 to 60 
nuclear power plants. 
 
IMPROVING NUCLEAR REGULATION AND OVERSIGHT 
 
6  (SBU) The Ministry of Mines and Energy has announced its 
intention to break up the national monopoly on the construction and 
operation of nuclear reactors to lower the costs involved.  The 
nuclear monopoly is written in Brazil's constitution, but an 
amendment delivered to the Chamber of Deputies in September 2008 
would allow private companies to work with nuclear generation.  The 
Ministry of Science and Technology, however, does not support the 
change, citing concerns over the strategic nature of nuclear power. 
 
¶7.  (SBU) Dr. Vinhas of CNEN said that later this month (October 
2008), a committee of 11 ministries will meet to discuss the 
creation of a separate nuclear regulatory agency.  The creation this 
ministerial group, called the Committee for the Development of 
Brazil's Nuclear Program, is coordinated through the President's 
Office (Planalto) and will respond to the perceived increased demand 
for regulation of an expanding nuclear energy program.  Currently, 
CNEN both regulates and plays a role in managing the two nuclear 
reactors and other small-scale nuclear activities.  Dr. Vinhas 
commented that this arrangement might have worked satisfactorily 
with a small nuclear program, but with Brazil's ambitious expansion 
plans, a separate regulatory body makes more sense now.  Of note, 
the GOB has more than doubled CNEN's budget between 2003 and 2008, 
from Reals 70 million to Reals 150 million (about USD 70 million). 
 
BRAZIL-ARGENTINA NUCLEAR COOPERATION 
 
¶8.  (SBU) In March 2008 Brazil and Argentina announced the formation of 
a bilateral Nuclear Energy Commission (COBEN), and stated their 
intention to create a joint state company (EBEN) that will develop 
compact nuclear reactors and enrich uranium.  While Brazil is 
willing to work with Argentina and possibly other countries on 
nuclear energy, it appears that the GOB remains unwilling to share 
technology for uranium enrichment that it has developed.  Dr. Vinhas 
of CNEN says that the Brazilian and Argentine technologies don't 
match well; Brazil pursues light water technology and Argentina is 
similar to the Canadian approach and uses heavy water.  In addition, 
press reports indicate that the Brazilian Navy is adamantly opposed 
to technology transfer to Argentina through this joint endeavor. 
Further, Brazilian Nuclear Industries (INB), the civilian company 
that runs Brazil's current enrichment facility at Rezende, near Rio 
de Janeiro, does not have access to the Navy's enrichment 
technology, which has been developed at the Navy's research center 
at Aramar, located at Ipero.  Aramar's principal project today is 
the construction of a nuclear powered submarine. 
 
NUCLEAR FUEL AND ENRICHMENT 
 
¶9.  (SBU) Brazil has the world's sixth largest reserve of uranium. 
Its actual uranium reserves could be much higher as only 30 percent 
of its territory has been prospected.  Based on the present 
calculated reserve of 500,000 tons, Brazil would have enough uranium 
for 250 years of operation of six reactors.  Nonetheless, Brazil 
currently goes through foreign companies, such as Urenco, to obtain 
fuel-grade uranium for its nuclear facilities.  Dr. Vinhas of CNEN 
reports that the GOB plans to install in Aramar a plant to transform 
yellow cake into UF gas.  This is presently done for Brazil in 
Canada, and the enrichment is done in Europe through Urenco.  The 
GOB wants to obtain self-sufficiency in the production of fissile 
fuel for all of Brazil's nuclear reactors by 2014.  Dr. Vinhas 
states that Brazil has no current plans to export surplus enriched 
fuel, and will instead keep its surplus as a strategic reserve. 
 
NUCLEAR WASTE 
 
¶10.  (SBU) Environment Minister Minc initially stated that he would 
not grant an operational license for Angra 3 unless a proper 
disposal method for nuclear waste was under construction.  However, 
condition 2.18 of license 279 from IBAMA had different wording, 
indicating that it was necessary for Eletronuclear to present a 
proposal and initiate execution of the approved project for the 
final disposition of nuclear waste before the initiation of 
operation of Angra 3.  There has been some confusion over the 
differences between the terms execution and construction as used in 
the license.  The GOB plans to begin the nuclear waste disposal 
project in 2014, and construction will begin in 2019, with 
conclusion in 2026.  It is still unclear what the nuclear waste 
solution will be.  CNEN has stated that Brazil's nuclear program 
does not have the financial means or any reason to reprocess nuclear 
 
BRASILIA 00001354  003 OF 003 
 
 
fuel today, and that it lacks technology to separate plutonium for 
weaponry.  Dr Vinhas said that highly radioactive nuclear waste will 
continue to be stored in the interior pools of each plant in Angra, 
where it will remain for 10 years for cooling.  An external pool 
will be build by 2022, when the internal reserves of Angra 1 and 
Angra 2 will be full.  CNEN believes the pool to be the best 
solution, and that pools are usable for the life of the reactor, or 
circa 60 years.  As Angra 3 will begin operation in 2015, CNEN 
foresees disposal becoming an issue only in 2075. 
 
COMMENT 
 
¶11.  (SBU) After years of inactivity, the GOB is seeking to 
reactivate old projects and launch new ones in the civilian nuclear 
energy field.  Construction of the country's third reactor (Angra 3) 
should begin shortly, and now the GOB is looking at other aspects, 
such as producing its own fuel from its rich supplies of uranium. 
At the same time, the government is trying to put its regulatory 
house in order with a new oversight agency separated from 
management.  Talk of cooperation with Argentina has not progressed 
far and obstacles lie in its way.  GOB looks well-placed to expand 
its civilian nuclear energy sector if it can overcome some 
significant hurdles, with financing at the top of the list.  In the 
past Brazil has struggled to take major infrastructure ideas from 
the drawing board and bring them to fruition.  The GOB's current 
nuclear energy plans offer opportunities for both expanded 
government cooperation on the regulatory and management front, as 
well as business opportunities for private sector. 
 
SOBEL