July 2, 2009 / 3:40 AM / 10 years ago

ANALYSIS - Row over nuclear fuel bank awaits new IAEA chief

VIENNA (Reuters) - Whoever becomes head of the U.N. nuclear watchdog later this year will have to tackle a deep political divide over a nuclear fuel supply plan aimed at keeping the world safe from the spread of atomic weapons.

The flag of the International Atomic Energy Agency (IAEA) flies in front of the Vienna headquarters in this August 9, 2005 file photo. REUTERS/Heinz-Peter Bader

The International Atomic Energy Agency (IAEA) holds a vote on Thursday to try to pick a successor to director-general Mohamed ElBaradei, who will retire in November without realising his vision of a safe nuclear fuel supply for all.

The issue will test his successor’s diplomatic mettle but who that will be is also up in the air, with industrialised and developed nations at odds over the best candidate.

On the backburner for decades, the fuel bank has been given a strong boost U.S. President Barack Obama, and got further impetus from Iran’s expanding enrichment programme which the West suspects is aimed at yielding atom bombs.

The IAEA forecasts that demand for nuclear energy, most visible so far in countries across the conflict-ridden Middle East, will almost double over the next generation as nations seek an alternative to high-polluting and finite fossil fuels.

But the uranium used in nuclear power plants can also be enriched to high levels to form the fissile core of atom bombs — something the West fears Iran could be pursuing but Tehran denies, saying its programme is intended only for electricity.

“This is an issue which will increasingly demand the attention of the (IAEA) director-general — to manage the expansion of nuclear power in ways that provide for confidence,” said Mark Fitzpatrick, senior non-proliferation fellow at London’s International Institute for Strategic Studies.

ElBaradei, backed by uranium producer Russia, has been trying to propel the plan forward but was blocked at a June IAEA board meeting by developing states, who fear it could limit their right to establishing their own atomic energy programmes. Some 60 countries want to develop projects according to the IAEA.

Keen to build his legacy after 12 high-profile years at the agency helm, ElBaradei has promoted “multinationalising” the fuel cycle through an IAEA-supervised bank which would provide low-enriched uranium from industrialised nations’ stocks if recipients can show an impeccable non-proliferation record.

Countries would be able to tap the bank if their fuel supply is cut off for political reasons.

“There is a difficult line — who is this aimed at? With countries like Iran, how do you manage the criteria so you don’t reward bad behaviour but at the same time supply to countries you fear are engaging in that behaviour?” an EU diplomat said.

“That’s quite a delicate balance.”


India, which along with China is set to become one of the world’s biggest users of atomic power, has led objections to the fuel bank solution, rejecting ElBaradei’s request to flesh out the plan for approval in September.

Developing nations warned against “any attempts (meant) to discourage the pursuit of any peaceful nuclear technology on the grounds of its alleged ‘sensitivity’”, in a statement to the IAEA board of governors meeting on June 18.

Developing nations comprise about half the IAEA board, which makes key decisions by diplomatic consensus. Despite the setback, diplomats said, the plan will remain on the table.

“Many countries recognise that the extra energy security that would be afforded by fuel assurances may make nuclear power more feasible,” a senior Western diplomat said.

ElBaradei, a Nobel Peace Prize laureate, has argued that all new and existing enrichment and reprocessing facilities should eventually come under multilateral control — but has recognised just how politically sensitive this idea could be.

“Make no mistake — any mechanism that smacks of inequality or dependency will never get off the ground,” he told the U.N. General Assembly in October.

There are two main draft plans for the fuel bank, which would be the first step towards full multilateral ownership.

An IAEA proposal says $150 million in donations pledged for the initiative could buy 60-80 tonnes of low-enriched uranium that would be offered to member states at market prices. Russia has offered to host an 120-tonne LEU reserve to supply the IAEA.

The debate over the plan highlights a divide on the IAEA board between countries with nuclear power, who stress the agency’s anti-proliferation watchdog role, and developing nations who focus on the IAEA mandate to promote peaceful uses of the atom — the 52-year-old agency’s original purpose.

But the IAEA sees fostering peaceful applications of nuclear energy as inseparable from its higher-profile mandate to stop the illicit spread of nuclear weapons capability.

“Whoever is the next director-general will have to realise that the IAEA’s role is not just as the policeman of nuclear material but as the facilitator for making the best use of it in a sustainable manner,” IAEA nuclear power expert Ian Facer said.

Additional reporting by Mark Heinrich

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