The Uranium Deal: Duma wants to stop uranium export

Publish date: July 13, 1998

Written by: Igor Kudrik

The communist faction in the Russian Duma plans to introduce a law which would prohibit exports of fissile materials. This follows a review of the uranium deal between Russia and the U.S., conducted by the Duma's Security Committee in late April.

In February 1993, Moscow and Washington reached an agreement "On the use of Highly Enriched Uranium Extracted from Nuclear Weapons." As a follow-up to the agreement, the two countries signed a contract in 1994, under which 500 tons of highly enriched uranium (HEU) were to be purchased by the U.S. Enrichment Corp. (USEC). The main Russian partner was the Ministry for Atomic Energy (Minatom). The deal was evaluated at $12 billion. In 1996, USEC was privatised. Following the privatisation, the company stated it was not in position to pay for the uranium itself, but only for the services to blend it down. This process was conducted in Russia. With the U.S. partner found to be unreliable, Minatom officials demanded the return of the blended low-grade uranium. However, U.S. legislation forbids the export of nuclear materials to Russia. In a bid to find alternatives to the USEC contract, Minatom started to seek the services of intermediaries. Two candidates proposed their services: the Franco-German-Canadian consortium Cogema-Nukem-Cameco on one side and the little-known U.S. company Pleiades Group, headed by a Russian emigrant, on the other. Minatom’s choice fell on Pleiades. The U.S. State Department could hardly conceal its surprise at this choice.

The deal received considerable attention in the Russian media followed by a review conducted by the Security Committee of the Russian Duma in late April. The review resulted in an audit by Minatom, aimed at establishing whether the money received by the ministry so far was transferred to the federal treasury. The results of the audit have not yet been made public. Minatom’s new minister Yevgeny Adamov said the negotiations with Pleiades are currently suspended.

In late May, the chairman of the Duma Committee for Conversion and Science Technologies Aleksandr Pomorov, member of the communist faction, said the Duma is preparing a new law, which would prohibit export of fissile materials from Russia. Russia, according to Pomorov, may loose its status of a nuclear state if it continues to sell off uranium on such a scale. Pomorov also said the uranium deals with the U.S. and Germany must be cancelled. Germany reached a preliminary agreement with Minatom, authorised by the decree of the Russian Government on February 26, to buy 1,2 tons of HEU.

The final outcome of the battle over the uranium is still unclear. In the meantime, some of the U.S. officials started to criticise the Treasury Department’s plans to privatise the U.S. government’s uranium enrichment plants. Joseph Stiglitz, past chairman of the U.S. President’s Council of Economic Advisers, argued in an article published lately in the New York Times that the privatised, profit-seeking USEC "would have little incentive" to buy the Russian fuel, what stalls to a certain degree the U.S. non-prolifiration effort in respect to the Russian weapons-grade uranium.