Kazakhstan’s Nuclear Bank: Achieving Benefits at Acceptable Risk

Dr. Richard Weitz (Credit: The Hudson Institute)

By Dr. Richard Weitz

01/25/2012 – The world needs a multinational nuclear fuel bank and Kazakhstan is eager to host it. Kazakhstan has certain attributes that make it a welcome candidate to house one of perhaps several nuclear fuel banks.

But Kazakhstan needs to reduce certain problems that render its suitability as a host suspect in the eyes of many domestic and foreign observers.

A well-known problem with the Nuclear Non-Proliferation Treaty (NPT) is that parties are legally allowed to acquire sensitive nuclear capabilities that can quickly be transformed from producing fuel for nuclear power plants to fissile material for manufacturing nuclear bombs.

In particular, a state can develop extensive uranium enrichment and plutonium reprocessing capabilities while a member in good standing with the NPT and the International Atomic Energy Agency (IAEA). It can then legally withdraw from the treaty by giving 90-days’ notice as specified in NPT Article 10, which permits a States Party to renounce the Treaty if “decides that extraordinary events, related to the subject matter of this treaty, have jeopardized the supreme interests of its country.”

Can Kazakhstan become a global nuclear fuel bank? (Credit Image: Bigstock)
Can Kazakhstan become a global nuclear fuel bank? (Credit Image: Bigstock)

North Korea has already exploited this loophole, and Iran may soon follow.

Although many countries pursue uranium enrichment and plutonium separation technologies with no intentions of seeking nuclear weapons, their intentions can rapidly change for many reasons. 
To avert a world of dozens of de facto nuclear weapons capable states, the IAEA, its member governments, and various arms control advocates have sought to create mechanisms to discourage the spread of proliferation-sensitive technologies.

Proposals to establish one or more nuclear fuel banks clearly fit within this framework. Under this arrangement, countries can “borrow” any fuel they need for their nuclear power reactors from a repository under IAEA control. A nuclear fuel bank relies on market incentives, rather than coercive methods, to encourage countries to lease nuclear fuel from designated provider states and then repatriate the resulting spent uranium fuel to the original supplier for reprocessing and disposal.

The assumption underpinning proposals to establish a bank is that guaranteeing countries the right to purchase and store fuel internationally, at modest cost providing they met their nonproliferation obligations, would reduce incentives for states to develop expensive and proliferation-problematic national uranium enrichment and reprocessing capabilities that can be misused to make nuclear weapons.

Enter Kazakhstan

The government of Kazakhstan had offered to establish an international nuclear fuel bank on its territory. President Nursultan Nazarbaev made public his interest in possibly hosting such a bank during an April 2009 joint press conference in Astana with visiting Iranian President Mahmoud Ahmadinejad.

Kazakhstan has certain attributes that could make it a good candidate for such a fuel bank. Since gaining independence in 1991, the government of Kazakhstan has established a strong nonproliferation record, beginning with its decision to renounce its Soviet nuclear inheritance and continuing with its support for various international nonproliferation endeavors.

Kazakhstan has established a good nonproliferation record, joining all relevant treaties and institutions. It acceded to the NPT as a non-nuclear weapons state and has placed all Kazakhstan nuclear facilities under IAEA safeguards, subjecting them to IAEA monitoring and inspections. The Kazakh government has negotiated both a standard safeguards agreement with the IAEA (1994) and acceded to the agency’s more stringent Additional Protocol (2007), which grants IAEA staff additional inspection and monitoring rights. It has worked with the IAEA and the U.S. government to strengthen the safety and security of its nuclear plants.

Kazakhstan also carries considerable weight in international nuclear markets.

It has enormous stocks of natural uranium (approximately one-fifth of the world’s proven reserves), is becoming the largest national producer of uranium, and exports natural uranium to many countries. Kazatomprom, the national nuclear monopoly, plans to increase its role in several international nuclear energy markets. The conglomerate wants to mine 30,000 tons of uranium annually by 2018. It also has set the goal of supplying 12% of the global uranium conversion market, 6% of the market for enriched uranium, and 30% of the fuel fabrication market by 2015.

Kazakh ambitions in the international market for nuclear services extend further. The government and nuclear industry would like to establish a full-fledged “nuclear fuel service center” that, in addition to serving as a uranium fuel bank, could reprocess the spent fuel from nuclear reactors to recycle it as plutonium while storing the residual nuclear waste. The center could also provide nuclear reactors and other nuclear energy technologies.

In general, Kazakhstan has pursued a “multi-vector” foreign policy aiming to achieve good relations with many countries rather than align too closely with any one bloc.
Many countries justify their decision to develop indigenous nuclear enrichment capabilities on the grounds that they do not want to become vulnerable to foreign suppliers for nuclear fuel, citing especially the risk of politically motivated supply cut-offs unrelated to non-fulfillment of their nonproliferation obligations. The Kazakh government’s desire not to antagonize foreign governments or align too closely with Western countries should allow foreign governments to feel more comfortable depending on nuclear fuel provided from Kazakhstan. Kazakh officials have always supported the right of other countries to pursue nuclear energy for peaceful purposes.

Kazakhstan analysts also believe their country could obtain several distinct benefits from hosting such a facility—including strengthening the country’s nonproliferation reputation, securing millions of dollars in foreign investment, and helping to develop the country’s domestic nuclear infrastructure.  The lure of these benefits provides the authorities with incentives to run the fuel bank efficiently and effectively.

But Kazakhstan still needs to address certain problems before the international community can support establishing a multinational uranium fuel bank on its territory.

Despite constraints on freedom of expression and mass protests, it is evident that many Kazakhstan citizens are anxious about their country’s increasing nuclear activities due to how Kazakhstan was exploited during the Soviet period as a testbed for hundreds of nuclear explosions. Parts of eastern Kazakhstan around the former Soviet test site of Semipalatinsk remain heavily polluted and environmental contamination has polluted much of the surrounding environment and left thousands of people suffering adverse medical consequences. Kazakhstan’s citizens worry that their nuclear industry will again downplay environmental and ecological risks in order to expand the country’s dangerous nuclear activities.

Analysts are also uncertain whether Kazakhstan can train an adequate number of scientists, engineers, and technicians to manage the rapid expansion of the national nuclear industry envisaged by current government plans.  The government has had difficulty in training managers and workers to help diversify the national economy and reduce Kazakhstan’s reliance on energy exports.
Conversely, fears exist that the growing number of Kazakh nuclear specialists might sell or rent their expertise to criminals, terrorists, or foreign governments seeking nuclear knowledge for illicit purposes.

Regarding the latter, some commentators are uneasy about the Kazakhstan’s proximity and friendly relations with Iran. Kazakhstan’s desire to remain on good terms with all governments means they have avoided confronting Iran over its suspect nuclear activities. Kazakhstan’s leaders have denounced North Korea for its nuclear weapons tests, but have refrained from criticizing Tehran for pursuing nuclear enrichment and other activities that the UN Security Council has termed illegal and the IAEA has now assessed as possibly aiming to develop nuclear weapons.

One benefit an international fuel bank cannot bring is to reign in Iran’s nuclear program. Iranian leaders have shown that at least some states would likely still seek to acquire a compete portfolio of nuclear fuel cycle technologies, even if some of its elements could be converted to making nuclear weapons, regardless of international calls for restraint and multiple multinational sanctions. Iranian leaders cite considerations of national sovereignty and status as well as economic justifications for their pursuit of indigenous nuclear technologies.

For this reason, even ardent supporters of creating an international fuel bank see it as one more supporting layer—along with strengthened IAEA safeguards, more proliferation-resistant nuclear technologies, improved export controls, an end to the production of fissile materials, and other initiatives—in the newly fortified nonproliferation architecture under construction.