IAEA and Kazakhstan agree to create nuclear fuel bank

27 August 2015

The International Atomic Energy Agency (IAEA) and Kazakhstan today signed an agreement to set up a low-enriched uranium (LEU) fuel 'bank' in Oskemen, Kazakhstan.

IAEA LEU Bank agreement signing - 460 (IAEA)
Idrissov and Amano following the signing of the agreement (Image: IAEA)

Operated by Kazakhstan and expected to start operations in 2017, the IAEA LEU Bank will be a physical reserve of LEU - the basic ingredient of nuclear fuel - and act as a supplier of last resort for the Vienna-based agency's Member States in case they cannot obtain LEU on the global commercial market or otherwise.

The facility is also seen as an important part of international efforts to prevent nuclear proliferation - as a way to dissuade countries from building enrichment facilities that might be misused to purify uranium to weapons-grade levels.

The agreement was signed in Astana by IAEA director general Yukiya Amano and Kazakhstan's foreign minister Erlan Idrissov. The Kazakh government said today that the signing ceremony was attended by representatives of UN Security Council members, including China, France, Russia, the UK and the USA, as well as representatives of donor countries for the project - the European Union (EU), Kuwait, Norway and the United Arab Emirates (UAE).

"I am confident that the IAEA LEU Bank will operate safely and securely, in line with the applicable IAEA nuclear safety standards and nuclear security guidance," Amano said, according to an IAEA statement.

In addition to the Host State Agreement, the ceremony included the signing by Amano and Kazakhstan's energy minister Vladimir Shkolnik of a related technical agreement, and a contract between the IAEA and Kazakhstan's Ulba Metallurgical Plant. The three documents comprise the legal framework for the IAEA LEU Bank.

"A lot of work must still be done, but after the signing of the relevant documents today, the legal framework is fully in place and we can move ahead with full-scale implementation," Amano said.

The IAEA LEU Bank will host up to 90 tonnes of LEU, sufficient to run a 1000 MWe light-water reactor. The Ulba Metallurgical Plant has been handling and storing nuclear material, including LEU, safely and securely for more than 60 years.

The establishment and operation of the IAEA LEU Bank is fully funded through $150 million of voluntary contributions from the Nuclear Threat Initiative, the USA, the EU, the UAE, Kuwait, Norway and Kazakhstan. Their contributions will cover the cost of the facility for the first ten years of operation, Amano said.

Kazakhstan's leadership

Following the signing of the agreement, Thomas Countryman, US assistant secretary of state for international security and non-proliferation, said the fuel bank "is not the first place you go to for nuclear fuel", but is "specifically in case there is a sudden disruption in that supply". Kazakhstan "can play a very important role in giving that insurance to countries around the world," he said.

The IAEA Board of Governors authorized the establishment and operation of the IAEA LEU Bank in December 2010. In July 2011, Kazakhstan offered to host the IAEA LEU Bank in response to the agency's request for Expressions of Interest. Since 2011, Kazakhstan and the IAEA have been working on the technical details for the establishment of the IAEA LEU Bank and have negotiated the Host State Agreement governing the establishment and hosting of the bank.

In June 2015, the IAEA and Russia signed an agreement allowing transit of LEU and equipment through Russian territory to and from the IAEA LEU Bank.

"As the world's largest uranium producer, with expertise in peaceful nuclear technology, Kazakhstan is well suited to hosting the IAEA LEU Bank," Amano said today.

Kazakhstan hosts more than 15% of global uranium reserves, but has no nuclear power plants of its own.

The safety and security of the IAEA LEU Bank will be governed by Kazakhstan's legal and regulatory requirements, and will meet the applicable provisions of the IAEA's safety standards and security guidance documents. The LEU will also be subject to IAEA safeguards.

International security

Other assurance of supply mechanisms established with IAEA approval include a guaranteed physical reserve of LEU maintained by Russia at the International Uranium Enrichment Centre in Angarsk, and a UK assurance of supply guarantee for supplies of LEU enrichment services. The USA also operates its own LEU reserve.

US National Security Council spokesperson Ned Price said yesterday that the American Assured Fuel Supply, along with the similar programs by Russia and the UK, complement the IAEA's LEU Bank. Price said that US President Barack Obama "appreciates" Kazakh President Nursultan Nazarbayev's "important leadership on non-proliferation spanning more than two decades". After the collapse of the Soviet Union, the Central Asian country voluntarily gave up its nuclear arsenal.

According to Reuters news agency, former US Senator Sam Nunn said in a speech after the signing of the agreement today that the IAEA LEU Bank "will enable and encourage peaceful uses of nuclear energy, while reducing the risks of proliferation and reducing the risks of catastrophic terrorism". Nunn is co-chairman and CEO of Nuclear Threat Initiative (NTI). One of NTI's supporters, US billionaire investor Warren Buffett, contributed $50 million to "jumpstart" the project, Nunn said.

Amano said today, that in line with the Joint Comprehensive Plan of Action (JCPOA) on Iran's nuclear program, signed in July, Iran might in the future offer part of its own LEU stocks for the bank. Inventory for the bank will be bought through open tenders, he said.

On 25 August, Amano sought approval for extra funding of €9.2 million ($10.6 million) per year for the IAEA's "special arrangement" with Iran, which he stressed "would not serve as a precedent". Amano made his request to the agency's Board of Governors at a meeting convened to consider the UN Security Council's resolution 2231, namely, its request for the IAEA to undertake verification and monitoring of Iran's nuclear-related commitments under the JCPOA.

Today's ceremony was also attended by Andrew Weber, principal advisor to the US secretary of defence for matters concerning nuclear, chemical, and biological defence programs between May 2009 and October 2014.

Weber said the new fuel bank reduces the possibility for countries to develop nuclear weapons. "It gives them an international, neutral, reliable supply of low-enriched uranium for power reactors, so they don't have to develop their own enrichment capacity that could be misused to produce the fuel for nuclear weapons. So it takes that off the table and as a result it makes everyone in the world safer," Weber said.

"If this fuel bank had existed ten years ago, perhaps Iran would not have pursued uranium enrichment even to low-enriched uranium for peaceful use in its power reactors. They would have had a reliable, international supply devoid of politics under UN and IAEA auspices."

Researched and written
by World Nuclear News