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Russia: Energy Secretary Completes Nuclear Security Talks

Moscow, 23 July 1997 (RFE/RL) - U.S. Energy Secretary Federico Pena completed three days of talks in Moscow today focusing on non-proliferation of weapons of mass destruction and nuclear security.

Pena advanced plans to hold a summit of energy ministers of the Group of Seven industrialized nations, tentatively scheduled for next spring. In meetings with a range of top Russian officials, Pena also discussed ways to strengthen bilateral programs designed to ensure the safety of nuclear materials in Russia.

The U.S. supports Russian efforts to control its nuclear arsenal and weapons grade nuclear material as the cash-strapped government here tries to cope with disarmament.

The Russians are eager for financial help. They want to speed implementation of several bilateral agreements which allow Russia to earn desperately needed cash while dismantling its weapons of mass destruction.

One of the most important swords-into-ploughshares agreements following the end of the Cold War was a deal known as the Megatons to Megawatts program. Signed in 1994, the 20-year agreement calls for Russia to remove highly enriched uranium from dismantled nuclear warheads, mix it with natural uranium and sell the diluted product to the U.S. for use as nuclear reactor fuel. Russia is slated to earn $12 billion through the sale of the reactor fuel and the sale of the natural uranium Russia uses under the program.

Russian Atomic Energy Minister Viktor Mikhailov pressed Pena to lift U.S. restrictions on the sale of natural uranium from Russia under the bilateral agreement.

Russia, which processes the weapons grade uranium at a site in the Urals, is supposed to be paid partly in cash and partly in natural, unenriched, uranium which is taken from the nuclear reactor fuel.

Previously the United States paid cash for the natural uranium, which the Russian government pocketed. But under recently concluded terms of the deal, the natural uranium is now Russian property, to be used as Moscow sees fit.

However, the natural uranium, which is removed from the fuel in the United States cannot be exported directly back to Russia for use in domestic nuclear power stations because of U.S. laws preventing the transfer of nuclear materials to Russia. As one analyst put it: "Russian officials don't understand why uranium of Russian origin cannot be returned to Russia."

At the same time, Russia is restricted from selling natural uranium in the United States, mostly because of quota arrangements put in place following charges that Russian producers were dumping uranium in the U.S. market at unfairly low prices.

In a bid to resolve the dispute over how to sell the natural uranium, the Atomic Energy Ministry has been negotiating with three multinational companies on a deal to store $4 billion worth of uranium in the United States for sale at a later date.

James Cornell, vice president of Nukem Inc., one of three companies that is negotiating the deal with the Ministry, said they are close to agreement.

Under the proposed terms of the deal, the Russian side would be able to stockpile some of the natural uranium and sell specific quantities to the three companies when it believes market prices, which have fallen recently, are favorable. The consortium would then sell the uranium, mostly to customers outside the United States.

Russia's Atomic Energy Ministry, beset with financial problems and debts t workers at aging nuclear power plants, is eager to take advantage of the deal in full. During 1995-96, Russia earned about $450 million in cash from the uranium deal. However, the restrictions on selling and exporting the natural uranium component could cut into Russian earnings under the agreement.

The U.S. is concerned that it protects its own depressed uranium industry. It also has been reluctant to lift restrictions on the export of nuclear materials to Russia because of Moscow's recent deal to build a nuclear power station in Iran, which Washington considers a rogue state.