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Iran: Nuclear Fuel Bank Seen As Way Out Of Crisis

By Fatemeh Aman and Robert McMahon IAEA Director-General el-Baradei (file photo) (AFP) Iran's insistence on the right to develop a nuclear fuel cycle has fed growing international concern about its intentions. It has also spurred a revival of interest in the concept of establishing a central bank for nuclear fuel supplies. The head of the UN nuclear agency, International Atomic Energy Agency (IAEA) chief Muhammad el-Baradei, has said an international program to assure such supplies could hold the key to resolving the impasse with Iran.

WASHINGTON, 16 January 2006 (RFE/RL) -- El-Baradei last year revived the decades-old idea of establishing a central bank for nuclear fuel. The aim is to provide reliable access to nuclear fuel at market prices. This would remove incentives for countries to develop their own fuel cycle capabilities -- and hence, possess the capability of building nuclear weapons.

Tehran so far only appears interested in international partnerships involving uranium-enrichment programs on Iranian soil.

Receptive To The Idea

The United States reacted positively to el-Baradei's proposal, saying it would make available more than 17 metric tons of highly enriched uranium that could be blended down to lightly enriched fuel. Russia has also indicated it would make nuclear material available to a central bank.

Encouraged by the response, el-Baradei told a conference in Washington in November that the IAEA would soon establish this so-called "assurance" supply. "Once you have an assurance supply you are taking away the justification from countries to say, 'I would like to make my own fuel,'" he said. "And that's 80 percent resolving the problem. I would like, once we get assurance of supply, to couple that with a 10-year moratorium for any new enrichment facility or reprocessing facility."

Such a program is attractive to a number of countries with civilian nuclear programs. But it is aimed at defusing the crisis over Iran's program, which Tehran says is peaceful and necessary for the country's energy security. The United States and European powers are concerned the program is a cover for a nuclear weapons program.

Not Dependent On A Country For Energy

To date, the main proposal to address Iran's supply needs has come from Russia, which has offered to conduct uranium enrichment for Iran. But the head of the Iranian Security Council, Ali Larijani, said this month it made no sense for any country to entrust energy security to another. He referred to Russia's recent dispute over gas supplies for Ukraine.

But a fuel bank helps address this concern, says Mathew Bunn, acting director of the Project on Managing the Atom at Harvard University's Kennedy School.

Bunn, a former architect of U.S. government policy on North Korea's nuclear program, told RFE/RL's Radio Farda there are several ways to ensure uninterrupted fuel supplies to Iran. "First of all, back-up from the other major suppliers is one obvious possibility," he said. "Secondly, the IAEA, as you know, has been working to put together a fuel bank arrangement that would provide supplies of the fuel in the event of a major supplier, such as Russia, not being willing to provide supplies. Thirdly, one of the great things about nuclear energy is that the fuel is cheap and small and therefore is easy to stockpile."

A Solution For Iran And Others?

Other experts agree that a possible solution to the crisis would require assurances of a steady supply for Iran. Joseph Cirincione, the director of the nonproliferation program at the independent Carnegie Endowment in Washington, says that providing this assurance would probably spur key reforms at the international level.

He said: "If we handle it properly, Iran might be the trigger for resolving this problem that troubles all nations relying on nuclear power. Iran, ironically, could be the catalyst for creating a fundamentally new system of how we produce and sell nuclear fuel."

Bruno Pellaud, the IAEA's former deputy director-general for safeguards, says the fuel bank idea was developed as far back as 1957. He tells Radio Farda that compelling nonproliferation and economic concerns make it an idea whose time has come.

"Nuclear fuel can be purchased all over the world now," Pellaud said. "There are many, many suppliers and this, of course, is an assurance of supply, the fact that there are many suppliers that come from different political environments. So the need to produce one's fuel is not really overriding in an international context."

But Pellaud says a fuel bank is not likely to be a short-term solution for the Iran crisis. He says there is a deep feeling in Iran, currently projected by its hard-line government, that it should have the whole fuel cycle and not depend on foreign resources.
Tehran so far only appears interested in international partnerships involving uranium-enrichment programs on Iranian soil.

Iranian President Mahmud Ahmadinejad spoke of this in an address to the UN General Assembly in September: "Therefore, as a further confidence-building measure and in order to provide the greatest degree of transparency, the Islamic Republic of Iran is prepared to engage in serious partnership with private and public sectors of other countries in the implementation of the uranium-enrichment program in Iran. This represents the most far-reaching step, outside all requirements of the [Nuclear Nonproliferation Treaty], being proposed by Iran as a further confidence-building measure."

But the reaction of key European states to this proposal has been cool. It does not satisfy the main demand of Iran's EU-3 negotiating partners -- Britain, France, and Germany -- that Iran should not have the capacity to produce fissile material for nuclear weapons.

Iran's Nuclear Program

Iran's Nuclear Program

THE COMPLETE PICTURE: RFE/RL's complete coverage of controversy surrounding Iran's nuclear program.


An annotated timeline of Iran's nuclear program.