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Russia: U.S. Company Tries To Avoid Obligation To Buy Military Uranium

Washington D.C., 30 August 1996 (RFE/RL) - A U.S. government-owned corporation repeatedly rejected Russian offers this year to sell to the corporation enough nuclear material to make 400 small atomic bombs.

The federal entity, called the United States Enrichment Corporation (USEC), later reversed itself and agreed to buy the material -- but only after a key American senator threatened to block USEC's efforts to become a private company.

The agreement between Moscow and Washington to purchase Russian military stockpile of uranium as civilian nuclear reactor fuel is considered crucial to U.S. national security. The deal was forged following the collapse of the Soviet Union to prevent uranium from falling into the hands of terrorists or nations hostile to the West. Uranium is a key ingredient for manufacturing nuclear weapons.

U.S. Senator Pete V. Domenici, a Republican from the U.S. state of New Mexico, wrote a letter recently to the federal Energy Department, saying he is "convinced that the USEC is acting directly contrary to the national security interests of the United States" by balking at the purchase. The letter, addressed to Deputy Energy Secretary Charles Curtis, was published by "The New York Times" this week and its contents confirmed to RFE/RL.

Domenici was a key figure in pushing through congressional legislation encouraging Russia to dismantle nuclear warheads and sell the uranium to the United States.

The Energy Department and the USEC declined comment on the matter. Domenici is away from Washington on vacation but an aide told RFE/RL that, in the Senator's view, "it is in the U.S. national interest to accept Russian uranium shipments."

The USEC was created in 1993 to run two government plants that process fuel for power plants. It is also to execute terms of an agreement with Russia to market material from nuclear weapons as fuel for power plants.

The corporation has taken delivery from Russia of 13 metric tons of bomb-grade uranium. Russian officials have asked it to accept 18 tons in 1997, rather than the previously agreed 12 tons. Domenici had threatened to launch a congressional inquiry into the matter if the corporation did not buy the six additional tons of material from Russia.

USEC can produce nuclear power plant fuel at its two plants at a price lower than the cost of fuel bought from Russia. So critics say the profit on reselling Russian fuel is less than the profit on sales of its own product -- an incentive to minimize the amount bought from Russia.

Domenici's aide said that the USEC appeared to have a "conflict between national security and the need to make a profit."

A 1992 agreement between the United States and Russia calls for the corporation to purchase $12 billion dollars worth of uranium from dismantled Russian warheads in a 20-year period.