VZCZCXRO3133
OO RUEHIK
DE RUEHTA #1886/01 2920503
ZNR UUUUU ZZH
O 190503Z OCT 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6649
INFO RUCNCIS/CIS COLLECTIVE 2045
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1416
RUEHKO/AMEMBASSY TOKYO 2115
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
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RUEKJCS/SECDEF WASHDC 1470
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHUNV/USMISSION UNVIE VIENNA 0084

UNCLAS SECTION 01 OF 03 ASTANA 001886 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, ISN, EEB 
 
E.O. 12958: N/A 
TAGS: PARM PGOV PREL ECON MNUC KNNP KZ
SUBJECT:  KAZAKHSTAN:  DEPUTY SECRETARY OF ENERGY'S BILATERALS 
EMPHASIZE NON-PROLIFERATION AND PEACEFUL NUCLEAR DEVELOPMENT 
 
ASTANA 00001886  001.2 OF 003 
 
 
REFTEL:  ASTANA 1814 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  Deputy Secretary of Energy Daniel Poneman 
discussed cooperation on counter-proliferation and peaceful nuclear 
energy production with several of Kazakhstan's most influential 
non-proliferation policymakers during his October 6-8 visit to 
Kazakhstan.  Poneman and his delegation, which included 
representatives from the Department of Defense, Department of State, 
and the National Security Council, met Sauat Mynbayev, Minister of 
Energy and Mineral Resources; Vladimir Shkolnik, Director of 
Kazatomprom; and Timur Zhantikin, Director of the Kazakhstani Atomic 
Energy Committee.  The delegation toured the decommissioned BN-350 
reactor in Aktau and inspected the remaining 300 metric tons of 
spent-fuel  -- which contains enough plutonium and highly enriched 
uranium to fabricate 775 weapons of mass destruction -- which the 
United States and Kazakhstan are preparing to ship to a secure 
storage facility.  Deputy Secretary Poneman's interlocutors thanked 
the U.S. government for its assistance in securing nuclear 
materials, and asked for increased cooperation to enhance nuclear 
safeguards and facilitate commercial developments in the nuclear 
industry.  END SUMMARY. 
 
SECURING SPENT-FUEL AT BN-350 REACTOR CONTINUES 
 
¶3.  (SBU) On October 6, the Deputy Akim of Mangystau Oblast, a Vice 
Director of the Mangystau Atomic Energy Company (MAEC), and the 
BN-350 nuclear reactor Plant Director led Deputy Secretary Poneman 
on tour of the reactor, which the United States decommissioned in 
¶1999.  In addition to the reactor itself, they saw the spent fuel 
storage area and the casks of spent fuel that will be loaded for 
transportation to a secure site for up to 50 years of safe storage. 
MAEC's BN-350 representatives demonstrated the U.S. technology used 
to ensure physical security at the BN-350 facility.  Due to the long 
history of U.S.-Kazakhstani cooperation at the site in Aktau, the 
atmosphere throughout the visit was positive and upbeat.  Poneman's 
interlocutors thanked the United States for "its tremendous help on 
all aspects of decommissioning BN-350" and proudly discussed plans 
to build a new (non-plutonium -producing) reactor on the BN-350 site 
to produce nuclear energy and desalinate water for Mangystau Oblast 
-- as BN-350 once did. 
 
¶4.  (SBU) MAEC and BN-350 officials also gave the delegation a 
guided tour of the U.S.-funded $3.35 million sodium processing 
facility (SPF).  Once the government of Kazakhstan completes a 
planned geo-cement stone facility, the SPF will be used to process 
radioactive sodium for safe storage in cement blocks fabricated in 
the geo-cement stone facility -- the final step in the safe disposal 
of waste from the nuclear reactor. 
 
KAZATOMPROM WANTS TO SELL URANIUM TO U.S. COMPANIES 
 
¶5.  (SBU) Vladimir Shkolnik, President of Kazakhstan's National 
Atomic Company, Kazatomprom, met the delegation in Almaty on October 
¶7.  Shkolnik -- a nuclear physicist and former director of BN-350 
with close relationships with U.S. officials from his prior tenure 
as the Minister of Industry and Trade -- said the United States and 
Russia are Kazakhstan's leading partners in nuclear 
non-proliferation.  Appearing friendly and relaxed throughout the 
meeting, Shkolnik expressed disappointment that Kazatomprom does not 
supply uranium to any U.S. companies, and advocated for an event to 
introduce U.S. and Kazakshtani nuclear companies to one another. 
 
CRADLE-TO-GRAVE FUEL CYCLE 
 
¶6.  (SBU) In response to Poneman's comments that the international 
commercial nuclear sector should provide fuel assurances to 
compliant members of the Nuclear Non-proliferation Treaty, Shkolnik 
welcomed the concept as a necessary prerequisite to the expansion of 
the nuclear energy industry.  He replied jokingly that Kazakhstan 
"cannot refuse" to cooperate with the United States on the 
development of a reliable system of fuel assurances.  Shkolnik told 
 
ASTANA 00001886  002.2 OF 003 
 
 
Poneman that, as a physicist, he is convinced that the closed 
nuclear cycle, which generates no waste, is the future.  Therefore, 
re-fabrication should be considered as one element of the proposed 
"cradle-to-grave" fuel assurance cycle. 
 
GLOBAL NUCLEAR ENERGY PARTNERSHIP 
 
¶7.  (SBU) Poneman proposed that U.S. and Kazakhstani experts 
continue to discuss such issues over the next few weeks and on the 
margins of the October 23 Global Nuclear Energy Partnership (GNEP) 
Ministerial in China.  (COMMENT:  Kazatomprom's President said he 
would be in China on October 15, but he appeared unfamiliar with 
GNEP.  Kazakhstan is a member of the GNEP, but Ministry of Energy 
and Mineral Resource officials told PolOff that Kazakhstan has not 
participated actively over the last year.  END COMMENT.) 
 
NO PROGRESS ON NUCLEAR FUEL BANK 
 
¶8.  (SBU) Concerning Kazakhstan's offer to create a nuclear fuel 
bank, Shkolnik said although the fuel bank would be feasible for 
Kazakhstan, the government has not initiated negotiations with the 
International Atomic Energy Agency (IAEA).  Shkolnik said Kazakhstan 
-- number one in uranium output this year -- possesses both the 
technology and the uranium resources to host the bank. According to 
Schkolnik, "for us, an international nuclear fuel bank is just a 
derivative from our production."  Shkolnik concluded by stating that 
Kazakhstan's decision to renounce its nuclear weapons allows it to 
serve as a good example to other countries -- and a good host for a 
fuel bank. 
 
KAZATOMPROM SEEKS COOPERATION ON BUILDING SMALL REACTORS 
 
¶9.  (SBU) Kazatomprom's President, a well-known advocate of nuclear 
power, affirmed that Kazakhstan plans to build a nuclear reactor at 
Aktau.  He explained that since the electric grid in Mangystau 
cannot accommodate a high-capacity reactor, Kazakhstan is 
considering constructing two 300-megawatt reactors.  Shkolnik said 
that Kazatomprom, which sees a need to develop reliable small to 
medium-size reactors in Southeast Asia, Africa, and South America, 
is considering expanding into this new commercial arena.  Poneman 
suggested that DOE and Kazatomprom experts discuss potential 
cooperation in the development of small, modular reactors -- an area 
in which DOE already has significant experience. 
 
ONLY 20 KILOGRAMS 
 
¶10.  (SBU) When asked about DOE's project to down-blend highly 
enriched uranium (HEU) from the experimental reactor at the 
Institute of Nuclear Physics (INP), Shkolnik -- a former director of 
the INP -- quickly told Poneman "this project is not in my 
jurisdiction."  Kazatomprom's President nonetheless remarked, "the 
supply of HEU for the INP reactor is only 20 kilograms of uranium, 
and it is very important for Kazakhstan to have new low enriched 
uranium fuel that will enable research." 
 
KAZAKHSTAN SEEKS COOPERATION ON NUCLEAR DEVELOPMENT AND SAFEGUARDS 
 
¶11.  (SBU) On October 8, Timur Zhantikin, another nuclear physicist 
well-known to U.S. officials and Director of Kazakhstan's primary 
regulatory body in charge of nuclear physical security, thanked the 
United States for cooperation on the BN-350 and INP projects. 
Zhantikin reiterated Shkolnik's call to cooperate on the physical 
security of small nuclear reactors.  Zhantikin said the Kazakhstani 
Atomic Energy Committee (KAEC) is working to produce nuclear 
isotopes for medicines and develop a research center for biophysics 
and nuclear medicine at INP.  Deputy Secretary Poneman expressed 
interest in potential cooperation in these fields. 
 
¶12.  (SBU) Poneman also told Zhantikin that the United States would 
like to discuss fuel assurances and Kazakhstan's nuclear fuel bank 
proposal, and that liability protection is an important 
pre-requisite for civil nuclear cooperation.  Zhantikin confirmed 
that Kazakhstan plans to ratify the convention on liability 
 
ASTANA 00001886  003.2 OF 003 
 
 
protection this year, but said Kazakhstan has not been considering 
any other liability-related conventions.  Zhantikin, Kazakhstan's 
highest-ranking delegate to this year's U.S.-Kazakhstan energy 
partnership working group on atomic energy and nuclear security, 
said he had already discussed -- and reached basic agreement with 
U.S. delegates -- on next steps for U.S.-Kazakhstani cooperation on 
nuclear safeguards (reftel). 
 
KAZAKHSTAN RELUCTANT TO GIVE UP HEU 
 
¶13.  (SBU) Poneman told Zhantikin that the U.S. government would 
like to proceed with the down-blending of the bulk HEU at the INP 
reactor as soon as possible.  Zhantikin explained that the INP 
project consists of several stages:  design of the reactor to use 
low enriched uranium (LEU) fuel instead of highly enriched uranium 
(HEU) fuel, verification of its operability, and down-blending of 
the remaining HEU after the new LEU fuel is qualified.  When asked 
about "de-linking" fuel qualification from HEU down-blending, 
Zhantikin admitted that the Kazakhstani government is not yet 
convinced that the new fuel will work.  Poneman promised further 
explanation and evidence that the new fuel will work.  Zhantikin 
also admitted that Kazakhstan's possession of HEU may be perceived 
as "a political problem," but reiterated that the INP's bulk HEU is 
protected under strict nuclear safeguards.  Zhantikin also asserted 
that HEU is less efficient for production of isotopes.  He proposed 
the introduction of a tariff -- or other market mechanism -- on 
HEU-produced isotopes to compensate for the efficiency losses faced 
by Kazakhstan and other countries utilizing LEU.  According to 
Zhantikin, such a proposal would use market forces to promote 
nuclear non-proliferation.  Alternatively, Zhantikin suggested 
nuclear certification "licenses," "just as companies are rewarded 
with ISO certifications for compliance with industrial standards." 
 
ENERGY PARTNERSHIP PROMOTES COOPERATION 
 
¶14.  (SBU) COMMENT:  Poneman's interlocutors on non-proliferation 
issues -- in Aktau, Almaty and Astana -- praised U.S.-Kazakhstani 
cooperation and asked for collaboration on small and medium-sized 
reactors and nuclear safeguards.  Shkolnik and Zhantikin, both 
scientists who were part of Kazakhstan's former nuclear program, are 
anxious to help Kazakhstan build a strong, peaceful nuclear program 
and reluctant to give up Kazakhstan's supply of bulk HEU until new 
LEU fuel is qualified.  Kazakhstan's influential nuclear 
policymakers want to ensure that the new LEU fuel will work before 
down-blending the bulk HEU.  By signing the October 8 Joint 
Statement and Action Plan in the context of the 6th U.S.-Kazakhstani 
Energy Partnership, the United States reiterated the importance the 
U.S. government attaches to a partnership which has promoted, and we 
hope will continue to promote, nuclear security and peaceful nuclear 
development.  END COMMENT. 
 
HOAGLAND