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– General John Shalikashvili
former Chairman of the Joint Chiefs of Staff
Iranian Fuel Swap Still Up for Discussion
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Peter Crail

Iran remains open to talks with France, Russia, and the United States on a proposed nuclear fuel deal but is delaying the negotiations in response to international sanctions, Iranian officials said in June. Iranian President Mahmoud Ahmadinejad said during a June 28 press conference in Tehran that Iran would not hold talks prior to late August as “punishment” for imposing sanctions.

The UN Security Council adopted a fourth round of sanctions against Iran June 9.

Iran also said that it was preparing a response to a June 9 letter that the three countries, known as the Vienna Group, submitted to the International Atomic Energy Agency (IAEA) outlining concerns with a nuclear fuel swap declaration by Brazil, Iran, and Turkey. (See ACT, June 2010.)

The May 17 declaration, signed in Tehran, lays out an arrangement mirroring a deal proposed by the Vienna Group to Iran last fall wherein Iran would relinquish 1,200 kilograms of low-enriched uranium (LEU) in return for fuel for the Tehran Research Reactor, which produces medical isotopes.

In a June 17 interview with Iran’s state-run Press TV, Atomic Energy Organization of Iran (AEOI) chief Ali Akbar Salehi appeared upbeat about the prospects for dialogue. “I’m optimistic that the Tehran declaration will eventually open the way for a just and fair dialogue and negotiation with the Vienna Group,” he said.

Salehi dismissed the sanctions as “face-saving measures,” suggesting they would not impede negotiations.

Ahmadinejad had previously suggested Iran would not be willing to negotiate if sanctions were adopted, telling reporters in Istanbul June 8, “The U.S. government and its allies are so mistaken that if they think they can brandish the stick of resolution and then sit down to talk with us, such a thing will not happen.”

The five permanent members of the Security Council (China, France, Russia, the United Kingdom, and the United States) and Germany have also signaled their readiness to hold negotiations. Catherine Ashton, the European Union’s high representative for foreign affairs and security policy, told reporters June 14 that she invited Iran for talks on the nuclear issue on behalf of the six countries.

Although they compared the May 17 proposal unfavorably to the Vienna Group’s original version, U.S. officials have suggested it could be salvaged. U.S. Permanent Representative to the IAEA Glyn Davies told the agency’s Board of Governors June 9, “We still think the [Tehran Research Reactor] proposal, if Iran implemented it in a way that addressed the international community’s concerns, would be a positive step.”

The Vienna Group responded with skepticism to the declaration. U.S. officials said they believed Tehran was only seeking to avoid UN sanctions.

Hours before the sanctions were adopted, the group delivered a letter to the IAEA detailing nine specific concerns they had with the declaration. The concerns included Iran’s continued production of 20 percent-enriched uranium, which the declaration did not address, and Iran’s doubling of its LEU stockpile since the group’s initial proposal last October. That LEU is enriched to less than 5 percent.

In February, Iran began producing 20 percent-enriched uranium, the level required for the Tehran reactor, although it does not have the ability to make the fuel plates for the plant. Following the May 17 declaration, Iranian officials said that Iran would continue such production, which puts the material closer to weapons-grade levels, even if the deal to receive the fuel from abroad were concluded.

In addition, although Iran would turn over 1,200 kilograms of its LEU as part of the fuel exchange, according to a May 31 IAEA report, Iran had accumulated an estimated 2,427 kilograms of LEU as of May 1. When the fuel swap was first proposed in October, it would have accounted for about 75 percent of Iran’s LEU stockpile. (See ACT, November 2009.)

New Medical Reactors

Potentially complicating any discussions over the fuel swap is Iran’s recent announcement that it would begin the construction of additional medical research reactors operating on 20 percent-enriched uranium fuel. Salehi said during his June 17 interview that Iran has begun to design the first of the new reactors, which he expected to be ready for operations in four to five years. Although UN sanctions prohibit Iran from importing nuclear technologies, such a reactor could fall under the exception for specific goods designated for light-water reactors.

Such imports would need first to be approved by the UN committee overseeing the Iran sanctions.

He indicated that the plant would be similar to the Tehran reactor and require the same fuel plates, although it would be more powerful, running between 10 and 20 megawatts rather than the Tehran reactor’s five megawatts.

Salehi said during a radiomedicine conference in Tehran June 16 that the reactors would produce medical isotopes both for consumption in Iran and for export “to regional and Islamic countries.”

If Iran moved ahead with plans to construct additional reactors operating on 20 percent-enriched fuel, it might continue enriching uranium to that level, a key sticking point raised by the Vienna Group over the declaration.

The May IAEA report said that Iran was preparing to expand its production of 20 percent-enriched uranium, having installed a second 164-centrifuge cascade for that purpose at its pilot enrichment facility.

But Iran does not yet have the capability to manufacture the fuel plates for the Tehran reactor out of the 20 percent-enriched uranium. The Iranian Students News Agency (ISNA) quoted Salehi June 16 as saying that Iran “has acquired the know-how” to do so and expected to produce an initial batch of fuel by September of next year.

It does not yet appear that Iran has carried out substantial work on making such fuel plates. The IAEA’s May report indicated that Iran had not yet installed new process equipment to produce nuclear fuel rods or pellets at its Fuel Manufacturing Plant at Isfahan since May 2009.

Meanwhile, Iranian officials have suggested that Iran is reversing plans to terminate the operations of the Tehran reactor once a heavy-water reactor under construction at Arak is completed. The Arak reactor is also intended to produce radioisotopes, including for medicine. Salehi said June 17 that the Tehran reactor could be operated “for another 20 years.” However, his predecessor, Gholamreza Aghazadeh, told ISNA in 2006, “Tehran’s reactor will be turned off by the time that Arak’s reactor is started up.” (See ACT, March 2010.)

Construction on the Arak reactor is expected to be completed in 2011, with the reactor beginning operations in 2013. The UN Security Council has demanded that Iran halt construction because the reactor can produce up to two bombs’ worth of plutonium in its spent fuel each year.