$12Bln Uranium Deal Soldiers On
- By H. Josef Hebert
- Mar. 30 1999 00:00
WASHINGTON -- The deterioration in U.S.-Russia relations caused by the bombings in Yugoslavia have failed to stand in the way of a uranium deal that could yield as much as $12 billion for cash-starved Russia.
Only hours after NATO forces began their attacks in Yugoslavia, prompting outrage from Moscow, Russia and the United States quietly signed an agreement aimed at salvaging the multibillion dollar uranium deal that has run into trouble in recent months.
U.S. Energy Secretary Bill Richardson and Russian Nuclear Power Minister Yevgeny Adamov toasted the agreement with champagne last Wednesday night in a ceremony at the Energy Department, officials confirmed over the weekend. The signing was given no advance publicity.
Earlier that day, NATO missiles and aircraft began attacking Yugoslavia over strong Russian protests. Only the day before, Russian Prime Minister Yevgeny Primakov canceled his trip to Washington in midflight because of the impending NATO airstrikes.
The uranium deal is a key part of the U.S. President Bill Clinton's nuclear nonproliferation efforts. To Russia, the agreement, worth $12 billion over 20 years, means access to badly needed hard currency.
The agreement "will facilitate the conversion of highly enriched uranium from dismantled Russian nuclear weapons into fuel for U.S. nuclear reactors,'' an Energy Department statement said.
The agreement is part of a complicated arrangement reached in 1993 between the United States and Russia for the sale of 550 tons of Russia's highly enriched uranium, used in nuclear weapons, to the United States.
About 40 tons of Russian weapons-grade uranium, diluted so it can be used in civilian reactors, has already been shipped to the United States. But in recent months the program has foundered with Russia threatening to stop further shipments. As the deal is structured, Russia sends diluted weapons-grade uranium to the private United States Enrichment Corp., which pays Russia, then sells the now low-enriched uranium to utilities for use in power reactors.
Part of the deal has Russia taking ownership of the natural uranium that the Russian highly enriched uranium replaces.
Because of a glut in the uranium market, the Russians have been unable to sell the natural uranium at the price they anticipated and have stopped shipping diluted highly enriched uranium as agreed in 1993.
The new agreement includes a commitment by the United States to take 22,000 tons of natural uranium off the market, while Russia agrees to stockpile some uranium. Congress last year provided $325 million to begin the purchases.
With the agreement in place and the government stockpiles propping up uranium prices, three Western companies came forward at the end of last week to commit to buy much of the natural uranium Russia is expected to obtain from sale of the weapons-grade uranium, officials said.
The companies - Cameco Corp., of Canada, the world's largest uranium producer; Cogema of France; and Nukem Group of Germany - announced a 15-year commercial agreement with Tenex, the commercial arm of Russia's atomic agency, for the purchase of 130,000 tons of natural uranium.