VZCZCXYZ0000
PP RUEHWEB

DE RUEHC #8236 0572255
ZNY SSSSS ZZH
P 262238Z FEB 09
FM SECSTATE WASHDC
TO RUEHBY/AMEMBASSY CANBERRA PRIORITY 0000
RUEHLO/AMEMBASSY LONDON PRIORITY 0000
INFO RUEHWD/AMEMBASSY WINDHOEK PRIORITY 0000
RUEHUNV/USMISSION UNVIE VIENNA PRIORITY 0000

S E C R E T STATE 018236

SIPDIS

E.O. 12958: DECL: 02/26/2029 TAGS: EMIN ENRG ETTC IR KNNP MNUC PARM TRGY AF

REF: A) 07 STATE 119630 B) 07 WINDHOEK 000458 C) 09 WINDHOEK 00063 D) 07 STATE 93518 E) 07 LONDON 002848 F) 09 WINDHOEK 00065

Classified By: A A/S Eliot Kang, for reasons 1.4 (b), (d), and (e)

¶1. (U) This is an action request. Please see paragraph 10.

¶2. (SBU) SUMMARY: Irans limited indigenous supply of uranium makes it nearly impossible to support its current and future nuclear reactor capabilities. As a consequence, Iran will likely be forced to reach out to foreign suppliers of uranium for its nuclear industry. However, the UN Security Council decided in Resolution 1737 that states must prevent the supply, sale, or transfer of items, materials, technology, and goods to Iran that could contribute to Irans enrichment-related, reprocessing or heavy water related activities. This includes most forms of uranium. Irans continuing violation of its UNSC obligation to suspend these activities renders it especially important that states refrain from all uranium exports to Iran unless contained in fuel rods and for a light-water reactor. The Namibian Government has been previously approached regarding these concerns (REFs A and B), and GON indicated that it would not transfer uranium to Iran as long as the UNSC sanctions remain in force. However, recent public remarks by Namibian Prime Minister Angula have caused concern. Embassy Windhoek has since approached a variety of GRN officials to ensure that Namibias policy has not changed; they have confirmed that this is the case (REFs C and F). Embassies London and Canberra are requested to approach UK and Australian counterparts to suggest that they approach the Namibian Government and Rio Tinto, the mining company that owns a controlling share of the Rossing Uranium Mine in Namibia, to press strongly for both to reject any Iranian attempt to acquire Namibian uranium. END SUMMARY.

¶3. (SBU) OBJECTIVE:

-- To encourage the UK and Australian governments to remind the Namibian government that UN Security Council resolution 1737 prohibits the sale or transfer to Iran of specified nuclear-related items -- including uranium (unless low enriched, contained in fuel rods, and for a light water reactor) and take similar actions with respect to Rio Tinto.

---------- BACKGROUND ----------

¶4. (SBU) As a consequence of its geology, Irans indigenous uranium reserves are insufficient to support its current nuclear power reactor program for a sustained period of time, much less the additional 7-20 power reactors it publicly proclaims an intention to build. Iran has two uranium mines, Saghand and Gachine, but the declared combined output from these mines will meet only about one-third of the annual fuel reload requirements of the single reactor at Bushehr. According to a study on Irans plans for future nuclear power reactors by the Department of Energy and using data provided by Iran to the Organization for Economic Cooperation and Development (OECD) and International Atomic Energy Agency (IAEA), Irans total uranium resources (approximately 16,050 tons including approximately 1,500 metric tons of identified and 14,550 metric tons of undiscovered resources) represent less than 25 percent of the 40 year life-cycle requirement of just seven reactors. Consequently, although Iran periodically presents optimistic plans for discovery and exploitation of new domestic uranium resources, its stated long-term uranium and reactor fuel requirements cannot be met without substantial foreign imports. However, its indigenous reserves are more than sufficient for a nuclear weapons program.

¶5. (SBU) Iran could soon begin to look for outside suppliers of uranium, either through uranium producers or countries with uranium mines both to build up its stockpile of uranium and to further its argument that its fuel cycle program is dedicated entirely to civil purposes. This is despite the fact that low enriched uranium fuel for power reactors can be procured on the international market at a lower cost than what Iranian indigenous production would require. Moreover, Iran would not need to engage in such an effort if it would accept the P5 1s generous offer of guaranteed nuclear fuel supply to Iran, contained in both the original June 2006 incentives package and June 2008 updated version, as well as Russias long-term contract to provide fuel to Irans sole nuclear power plant under construction at Bushehr.

¶6. (SBU) Iran has turned to the international market in the past, including by importing 531 tons of uranium ore concentrate, commonly referred to as "yellowcake," in 1982. Given the IAEAs report to the IAEA Board of Governors on 19 February 2009 that 357 tons of uranium in the form of UF6 have been produced at the Uranium Conversion Facility, it can be deduced that well over two-thirds of this imported material has already been processed at its Uranium Conversion Facility in Esfahan. Unclassified calculations based on Irans rate of uranium conversion thus far suggest that Iran will run out of yellowcake in early-to-mid 2009, assuming Iran does not slow its conversion process in order to avoid quickly depleting its stockpile. This uranium shortage suggests further that Iran may soon feel pressed to turn to a wide variety of possible suppliers.

¶7. (SBU) Under OP 3 of UNSC resolution 1737 and OP8 of UNSC 1803, states must prevent the export of nuclear-related items described in S/2006/814, which includes most forms of uranium. Given Irans publicly stated intention to continue its enrichment-related activities, we believe it is critically important that the worlds largest uranium producers prevent all/all exports of uranium to Iran unless contained in fuel rods and for a light-water reactor.

¶8. (S) A recent press article reported that Namibias Prime Minister Nahas Angula said that Namibia will not heed calls by individual countries on supplying uranium to Iran. PM Angula was quoted as saying that "unless an international agreement, such as with the United Nations Security Council, calls for countries not to supply to Iran, the Namibian Government treats Iran as any other country." The government of Iran has a 15 percent share of the Namibian firm Rossing Uranium Limited, which, according to the press article, supplied 7.6 percent of the worlds mined uranium last year. The Iranian government has held an ownership stake in Rossing since the 1970s and the firms External Affairs Manager has publicly stated that shareholders do not have any product take-off rights. Considering Namibias existing commitments and recent reassurances from the GRN (REFs C and F) it is possible that the Prime Ministers statement was either posturing and/or a misrepresentation of the Namibian Government position. However, it is imperative that the GRN has full appreciation of its UNSC obligations and does not/not engage with Iran on a uranium transfer arrangement. We therefore would like to encourage Australia and the UK to weigh in separately with the GRN to ensure that this is the case. Rio Tinto, as the dominant share-holder and operator of the Rossing Uranium Mine would also be a useful interlocutor. Given past exchanges Australia and the UK have had with the company, it would also be useful for them to raise with their POCs at the firm to solicit their views and press its leadership to re-commit to its previous pledge to not permit uranium deals with Iran from Rossing or any other uranium concerns under its management.

-------- NONPAPER --------

¶9. (SBU) BEGIN NONPAPER:

-- We are concerned about the article written by Nangula Shejavali in the Namibia press (3 February 2009) indicating that the GRN would allow Iran to procure uranium from its mines.

-- Iran could soon begin, or may have begun, to look for outside suppliers of uranium to build up its stockpile of uranium and to further its argument that its fuel cycle program is dedicated entirely to civil purposes.

-- As a consequence of its geology, Irans reported indigenous uranium reserves are insufficient to support its current nuclear power reactor program for a sustained period of time, much less the additional 7-20 power reactors it publicly proclaims an intention to build.

-- The IAEAs report of 19 February 2009 indicates that well over two-thirds of Irans available uranium yellowcake has been processed at its Uranium Conversion Facility in Esfahan. Calculations based on Irans rate of uranium conversion thus far suggest that Iran will run out of yellowcake in early-to-mid 2009, assuming Iran does not slow the current pace of its conversion process.

-- Under OP 3 of UNSC resolution 1737 states must prevent the supply, sale, or transfer of specified items, materials, equipment, goods, and technology, which could contribute to Irans enrichment-related, reprocessing or heavy-water related activities, as described in S/2006/814, including most forms of uranium.

-- Specifically, the transfer of natural uranium, in any form, is explicitly prohibited by the UNSC. This includes the transfer of uranium ore or its various processed forms.

-- Transfer of low enriched uranium, contained in fuel rods, and for a light water reactor is permitted, but requires notification to the UNSC Iran Sanctions Committee.

-- Iran would not need to engage in such an effort if it would accept the P5 1s generous offer of guaranteed nuclear fuel supply to Iran, contained in both the original June 2006 incentives package and June 2008 updated version, as well as Russias long-term contract to provide fuel to Irans sole nuclear power plant under construction at Bushehr.

-- Moreover, low enriched uranium fuel for power reactors can be securely procured on the international market at lower cost than Iranian indigenous production.

-- Extreme vigilance in dealing with Iran and its nuclear program is necessary given the requirements of the UN Security Council and the significant threat Iran,s nuclear program poses to international peace and security.

------------ END NONPAPER ------------

¶10. (SBU) ACTION REQUEST: Posts are requested to inform host government officials of U.S. concerns regarding the possibility of an Iranian attempt to acquire uranium from Namibia. Posts should note that GRN officials have generally allayed our immediate concerns but in light of our previous cooperation on this issue, additional discussion from their resident officials in Namibia on the basis of the press reports would be useful. Posts should encourage host governments to approach Namibia directly and express similar concerns. Posts may provide host governments with a copy of the non-paper contained in paragraph 9. Posts should also encourage host governments to engage again with local representatives of Rio Tinto to ensure any transfer request is denied (previous discussions are described in REFs D and E).

¶11. (U) Post is requested to report any substantive responses by 4 March 2009. Judee Allen-Close (ISN/RA, 202-736-4686, ) and Breck Heidlberg (ISN/RA, 202-647-6599, ) are the Departments POCs for this activity.
CLINTON