VZCZCXRO8214
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHPG #0102/01 0511600
ZNR UUUUU ZZH
R 201600Z FEB 09
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC 1150
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 0793
RUEAIIA/CIA WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEFDIA/DIA WASHINGTON DC
RUEHUNV/USMISSION UNVIE VIENNA 0065

UNCLAS SECTION 01 OF 02 PRAGUE 000102 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EUR/CE AND ISN 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY BEXP BTIO RU EZ
SUBJECT: URANIUM RENAISSANCE IN THE CZECH REPUBLIC 
 
REF: 08 PRAGUE 789 
 
1.(SBU) Summary: For many years, the Czech Republic was a 
large producer of uranium for the former Eastern Bloc. During 
the communist years, many political prisoners were sent to 
work in the uranium mines. Uranium mining declined during the 
later communist period with most of the production and all 
exploration ending before 1989. The Dolni Rozinka mine, near 
the Czech Republic's second largest city of Brno, is the only 
functioning mine and produces around 300 tons of uranium a 
year. Originally, production was supposed to end in 2008. 
However, with the increase in uranium prices, the Czech's 
heightened desire for increased  energy security following 
January's Ukrainian-Russian gas crisis, and the need to 
reduce the use of brown coal to comply with EU environmental 
guidelines, the Government plans to keep the mine open until 
at least 2012. End Summary. 
 
A Long History of Uranium Mining 
 
2.(U) The Czech Republic has a long history of uranium 
mining. The first mining of radioactive ores took place in 
Jachymov in 1873. Radium, a by-product of uranium, was first 
mined to be used for luminous dials on watches and ceramics, 
as well as for specialized health treatments. Starting in 
1947, the then Czechoslovakia began to produce uranium for 
the Soviet Union. Early mining sites like Jachymov, Horni 
Slavkov, and Pribram also became part of the Czechoslovakian 
"Gulag system" with many political prisoners working in the 
mines, developing cancer, and dying as a result of their 
labor. Most of the uranium mines were closed by or just after 
1989's Velvet Revolution due to environmental concerns and 
the questionable economic viability of continued mining. 
 
Current Production 
 
3.(SBU) The Czech Republic currently produces around 300 tons 
of uranium each year, making it the 12th largest producer in 
the world. The state-owned Diamo company runs the last 
operating mine inside the Czech Republic and Europe. The 
uranium ore is mined and turned into yellow cake powder. 
Diamo then sells the yellow cake to CEZ, the state-owned, 
national power monopoly. Before utilizing the uranium in the 
Dukovany nuclear power plant, CEZ sends the yellow cake to 
Russia for processing into nuclear fuel. Officials at the 
Czech Ministry of Industry and Trade (MIT) told us that the 
Czech government planned to close the mine in 2008 for 
environmental reasons, but in May 2007 decided to continue 
production until at least 2012. The Czech Press reported 
preliminary calculations indicate that the mine could remain 
commercially viable for another five to ten years and provide 
the Government with an additional 2 billion crowns 
(approximately USD 100 million) of revenue. The same MIT 
officials mentioned that Diamo has also approached the 
ministry about re-opening the uranium mine at Straz pod 
Ralskem. 
 
Clean Up of Old Mines 
 
4.(SBU) Besides production at the Dolni Rozinka mine, Diamo 
is also charged with cleaning up the environmental 
contamination at old uranium production sites throughout the 
Czech Republic. Dinamo's ODRA division is responsible for 
cleaning up and dismantling of defunct uranium mines near 
Ostrava. The SUL Division focuses on the clean up and 
dismantlement of the mines near Pribram. The GEAM Division 
still mines uranium, but is also responsible for the clean up 
and environmental management at the Dolni Rozinka mine and 
old mining sites in the region. In all of these locations, 
these divisions seek to treat ground water, manage waste 
lagoons, replant trees, and take care of claims by businesses 
and individuals that they were harmed by uranium production. 
 
Commercial Interest in New Production at Czech Mines 
 
5.(SBU) With the increased interest in nuclear energy, 
several foreign companies have sought to re-open old mines or 
explore for new uranium deposits in the Czech Republic. For 
example, in early 2008, Uran, Ltd., an Australian company, 
applied to explore and possibly mine uranium at a site that 
may contain up to 7500 tons of ore near the small town of 
Pribyslav. In exchange for the right to explore and possible 
commercial production, Uran was prepared to pay the town 
800,000 Czech crowns (CZK), approximately $36,000, during the 
 
PRAGUE 00000102  002 OF 002 
 
 
exploration phase and 1.6 million CZK, around $72,000, once 
production began. The company hoped to use the town's backing 
to overcome the Ministry of Environment,s objections to the 
project. In April 2008, the municipal authorities turned down 
the firm's request. Uran is appealing the Ministry of the 
Environment,s rejection of their mining application. 
 
Future Prospects 
 
6.(SBU) With a growing interest in curbing climate change and 
increased desire for energy diversification, commercial 
interest in increased uranium production inside the Czech 
Republic will only grow. Studies indicate that there may be 
another 115,000 tons of uranium left in the country that 
could be commercially exploited. Although prices are down 
from a spot price of just over $106 per ton in 2008, prices 
are expected to remain at around $50 per ton for the 
foreseeable future, a profitable level for continuation of 
Czech mining. However, there are two possible obstacles to 
increased production. Most of the minable deposits are 
located in sandstone, which could require the use of acid and 
could lead to significant environmental contamination if 
there were any type of industrial accident. With most of the 
large scale deposits near Jachymov and Pribram already fully 
exploited, most new production would have to be on a smaller 
scale that could increase unit costs for each ton produced. 
 
7.(SBU) Comment: The Czech Republic will likely continue to 
produce uranium despite opposition from the Green Party, 
which is part of the current coalition government, and 
concerns from local residents. January 2009's 
Ukrainian-Russian gas dispute and the shift away from brown 
coal is increasing support for expanding CO2 emission free 
nuclear power. Domestic uranium production will most likely 
continue to be part of the Czech Republic's energy strategy, 
especially should the Czechs go forward with new units at the 
Temelin and Dukovany nuclear power plants (see reftel). 
However, even with domestic production, the Czechs will still 
be reliant on Russia for its nuclear fuel needs and for the 
processing of yellow cake into useable fuel. The Russian 
company TVEL currently processes the Czech yellow cake, which 
meets part, but not all, of Dukovany,s fuel requirement. 
The rest is supplied by TVEL. Westinghouse currently supplies 
Temelin, the Czech Republic's other commercial reactor, but 
his will end December 31. In 2010, TVEL will be the sole fuel 
supplier of both nuclear power stations. End Comment. 
 
 
Thompson-Jones