Radioactive banking

By Elisabeth Braw

A new bank will open in Kazakhstan, taking deposits of nuclear fuel.

The head of the International Atomic Energy Agency will open a novel nuclear fuel bank in uranium-rich Kazakhstan this week where countries who build nuclear power plants will be able to make withdrawals of low-enriched uranium — hopefully removing the temptation to further enrich it for use in weapons.
Suspicions that Iran was using its ostensibly civilian nuclear program to develop nuclear-grade uranium led to international sanctions being imposed on Tehran. There are big questions now over whether the Kazakh bank, run under the aegis of the IAEA, will help dissuade countries from trying to set up their own uranium-enrichment programs.

The bank will allow any country to buy nuclear fuel in the event that its existing supplies are disrupted, and on condition that buying from the bank does not distort commercial markets.
“It’s a huge step forward,” said Andrew Bieniawski, vice president of material security and minimization at the Nuclear Threat Initiative, a non-profit started by CNN founder Ted Turner and former U.S. Senator Sam Nunn that works to reduce nuclear dangers. “The bank is a milestone that will enable countries to pursue nuclear energy without increasing the risk of nuclear proliferation.”

Billionaire Warren Buffett provided the initial $50 million

The bank boasts unconventional funding. Billionaire Warren Buffett provided the initial $50 million to NTI on the condition that the IAEA find donors who would at least double his gift.
The IAEA did that, lining up an additional $105 million from the governments of the United States, Norway, Kuwait and the UAE, as well as the European Union. The money will cover construction and operating costs.
“Of course we’re having discussions with the donors, and they have some influence on the enterprise,” Timur Zhantikin, deputy chair of Kazakhstan’s Committee for Atomic Energy at the Ministry for Investment and Development and a key negotiator in the establishment of the bank, told POLITICO. “But it’s an IAEA project and it’s run by the IAEA.”
That makes it the world’s first IAEA-operated fuel bank. IAEA Director-General Yukiya Amano will inaugurate the Kazakh bank, which will be located at Ulba Metallurgical Plant in the northeastern city of Ust-Kamenogorsk. During Soviet times, Ulba supplied the USSR’s nuclear reactors with low-enriched uranium and its nuclear submarines with the high-enriched kind. Today it is owned by Kazakhstan’s nuclear corporation, Kazatomprom.

How it works

The IAEA bank, which is expected to become operational within two years, will look nothing like your standard bank office. Indeed, most customers will never visit the bank, a specially guarded storage facility holding large metal cylinders containing the LEU.
Given that customers get to keep their goods, the bank should more accurately be called an LEU shop. The nuclear materials will first be enriched to 4.95 percent pure uranium, a level that is enough to power a light water reactor but not nearly enough to be used for a weapon. Just who will do the enriching will be decided in an open tender, said Terry Wood, the bank project manager. The fuel, in the form of a waxy solid, will then be stored in Ust-Kamenogorsk.

Cylinders containing Low Enriched Uranium | Kazakhstan’s Committee for Atomic Energy/Timur Zhantikin

Upon payment by the customer, staff will send LEU-filled cylinders by train — via Russia or China — and then to the final destination. The IAEA will monitor buyers, ensuring that there is no attempt to turn the LEU into weapons-grade uranium.
“In the early 2000s a fuel bank was seen as a solution to Iranian enrichment,” said Olli Heinonen, a former deputy director-general of the IAEA who is now a fellow at Harvard University. “But launching a nuclear bank took a long time and the plans of offering it to Iran didn’t work out.”
An agreement signed in July by Iran and six world powers group allows it to develop nuclear fuel for civilian purposes under very strict international supervision. Those restrictions will remain in place from 15 to 25 years, so the fuel bank could be an incentive for Iran to limit expansion of its civilian nuclear program.
“Russia has a contract to provide fuel to an Iranian nuclear reactor until 2021, and will build several more reactors for the Iranians, so Iran may be interested in supplementing its own fuel with fuel from the bank,” said Thomas Pickering, a former U.S. ambassador to the United Nations. “The Iranians have a natural distrust in sources of energy provided by individual countries and may place more trust in a fuel bank run by the IAEA.”
The bank also provides a welcome burst of positive publicity for Kazakhstan, which is often criticized for its dodgy human rights record and for the long-lasting rule of President Nursultan Nazarbayev, who has led the country of 17 million since 1989, before the collapse of the USSR. Earlier this year, he won his fifth consecutive election with a 97.7 percent share of the vote.

Nazarbayev has turned his oil and gas-rich nation into a poster-child of denuclearization.

Nazarbayev has turned his oil and gas-rich nation into a poster-child of denuclearization. As a Soviet republic, Kazakhstan hosted over 1,400 strategic nuclear warheads as well as tactical nuclear warheads, missiles, and missile launchers. But following the breakup of the Soviet Union, Kazakhstan and its fellow nuclear republics Ukraine and Belarus agreed to hand over their atomic weapons to Russia. By 1996, the three countries had delivered their entire nuclear arsenals to Russia.
Kazakhstan is the world’s leading uranium producer, producing 41 percent of the world’s uranium and exporting to a large number of countries including Russia, China, and Japan.
“Kazakhstan has significant experience storing and transporting nuclear fuel,” said Bieniawski of the Nuclear Threat Initiative.

No customers

Although the IAEA has long pushed for a nuclear bank, the project is getting a mixed reception. Many non-nuclear states fear that the scheme will preclude them from developing their own nuclear enrichment programs, cementing in the advantage of existing nuclear states that have already mastered the nuclear fuel cycle.
The bank is also supposed to only be used in the event of a disruption in supply, and at the moment there is no problem in sourcing. “There’s no shortage of nuclear fuel in the world,” said Heinonen.
According to the World Nuclear Association, there is currently a global oversupply of nuclear enrichment capacity, with 13 countries possessing all or most of the technology required to enrich uranium. Zhantikin said countries currently “have no burning desire to use this bank, and we don’t expect any customers in the near future.”
However, he added, the Kazakh government expects interest to grow as more countries begin to pursue nuclear energy. “It’s very expensive to develop nuclear enrichment technology,” he said.
Other countries have political reasons for keeping control of their own nuclear fuel.
“It’s hard to see North Korea giving up its nuclear enrichment program in favor of loans from the fuel bank,” said Heinonen.