ARGENTINA TO EXPAND NUCLEAR POWER SECTOR, RESTART

C O N F I D E N T I A L BUENOS AIRES 001888

SIPDIS

SIPDIS

STATE FOR WHA/BSC AND ISN/NESS
DOE FOR HE-1 AND HE-23
NRC FOR OIP AND COMMISSIONER MERRIFIELD

E.O. 12958: DECL: 08/22/2016
TAGS: KNNP ENRG IAEA OTRA PREL ECON AR
SUBJECT: ARGENTINA TO EXPAND NUCLEAR POWER SECTOR, RESTART
DOMESTIC URANIUM ENRICHMENT, AND SIGN NPT ADDITIONAL
PROTOCOL

REF: A. BUENOS AIRES 01227

B. STATE 129965

C. 05 BUENOS AIRES 03053 AND PREVIOUS

Classified By: CDA MICHAEL MATERA, FOR REASONS 1.4 (B) AND (D)


1. (SBU) Summary: Argentina plans an expansion of its
nuclear energy infrastructure, including a return of its
uranium enrichment program, according to MFA Director General
for International Security Issues Ambassador Elsa Kelly.
Planning Minister Julio De Vido is expected to lay out the
plans during a formal announcement the evening of August 23.
Kelly also confirmed that the GOA plans to sign a voluntary
Additional Protocol to the Treaty on the Non-Proliferation of
Nuclear Weapons (NPT),and stressed that all Argentine
nuclear activities would be fully transparent and under
strict IAEA safeguards. Kelly did not know if the August 23
announcement would include the Additonal Protocol news. End
Summary.

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One More Reactor
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2. (U) Argentina plans to ramp up its nuclear energy
producing capabilities to compensate for its depleting
hydrocarbon reserves, MFA Director for International Security
Issues Ambassador Elsa Kelly told Emboffs during a lunch
hosted by Charge August 22. The plan will be announced on
August 23 by Federal Planning Minister Julio De Vido in a
ceremony at the Casa Rosada. A focus of that plan, according
to Kelly, will be the completion of the derelict Atucha II
reactor complex, where construction ceased in 1995. Plant
management has estimated that getting Atucha II on-line will
take fifty-two months and cost USD 700 million (Ref A). Upon
completion, those officials estimate that the reactor will be
able to provide a net output of 700MW. That power would
increase the contribution of nuclear energy as a percentage
of Argentina's total energy use from around nine percent to
fifteen percent, Kelly said. Argentina currently has two
operational nuclear power plants: the 357 MW Atucha I in
Buenos Aires Province and the 648 MW Embalse plant in Cordoba
Province.

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Argentina to Resume Uranium Enrichment
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3. (SBU) As part of the August 23 announcement, Argentina
will publicly declare a resumption of its uranium enrichment
program, according to Kelly. The GOA plans to reopen its
Pilcaniyeu enrichment facility, which had been mothballed in
the early 1990's, and use it to enrich uranium up to three
percent for use as fuel in its own reactors. Kelly added
that Argentina is also interested in one day producing enough
fuel to export, thereby joining the exclusive nuclear fuel
suppliers' club. Kelly said that the GOA does not see the
six-country concept for reliable access to nuclear fuel
currently circulating in the IAEA (Ref B) as an attractive
option, because for Argentina to avail itself of the program
it would have to relinquish rights that in Article IV of the
NPT are described as "inalienable."

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100 Percent Transparency Claimed
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4. (SBU) Kelly took pains to stress the Argentine nuclear
program's peaceful nature. As evidence she stated that
Argentina would soon sign a voluntary Additional Protocol to
the NPT, and that all of Argentina's nuclear activities would
thereby be completely transparent and under IAEA safeguards.
In response to a question about coordinating the Voluntary
Protocol signing with Brazil, Kelly stated that Argentina
"was not going to wait for Brazil." (Note: The GOA has been
saying for at least a year that Brazil's decision regarding
an Additional Protocol would have no bearing on its own (Ref
C). End Note.) Kelly did not know if Minister De Vido would
include the news regarding the Voluntary Protocol in his
August 23 announcement.

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Comment
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5. (C) Argentina's announcement that it plans to expand its
nuclear power program, including resumption of uranium
enrichment, coming as it does amidst the crisis surrounding
Iran's nuclear ambitions, is certain to draw considerable
international attention. All of the available evidence,
however, points to this action being taken strictly in
support of increased domestic energy production. As
Argentina fossil fuel reserves dwindle and its energy demand
grows, expanding nuclear power production has been pointed to
by many as a good option for the GOA to promote. Argentina
has also been a strict advocate of non-proliferation for many
years, beginning with its return to democracy in 1983. That
Argentina has reacted negatively to the six-country fuel
assurances concept is no real surprise, especially as it has
maintained a long-standing enrichment research and
development program that would have excluded it from program
benefits in any case. Finally, increasing Argentina's
nuclear power infrastructure is good domestic politics.
Indeed, the local press has reported that the initiative will
generate more than six thousand new jobs. With President
Kirchner coming up for reelection in 2007, a number of
infrastructure megaprojects (e.g. construction of a bullet
train) have been floated. That Planning Minister De Vido,
the country's chief deliverer of GOA largesse, is making the
announcement makes it all the more likely that the GOA is
looking at this in part as support for Kirchner's reelection
bid. The Embassy will report again following the August 23
announcement.
MATERA