TUWAITHA YELLOW CAKE UPDATE

S E C R E T SECTION 01 OF 02 BAGHDAD 002788 SIPDIS SIPDIS E.O. 12958: DECL: 08/20/2017 TAGS: ECON ENRG IAEA IZ PREL AORC SUBJECT: TUWAITHA YELLOW CAKE UPDATE Classified By: ECONOMIC MINISTER CHARLES P. RIES FOR REASONS 1.4 (b) an d (d) SUMMARY: There have been a number of informal discussions with Ambassador Najib and others regarding the natural uranium (yellow cake) stored at the Tuwaitha Nuclear Research Complex (TNRC). These discussions concerned progress on the Request Letter from the Government of Iraq, contacts with potential purchasers of the yellow cake, the need for addition information collected by the Oak Ridge National Laboratory, the "missing" yellow cake, the disposition of small radioactive sources stored at the TNRC, and Ambassador Najib's tenure as the chairman of the Prime Minister's TNRC committee. In addition, Embassy officers accompanied Ambassador Najib on a site visit to the TNRC. END SUMMARY. ¶1. (S). Energy Attache and Econ Officer have had a series of discussions with Ambassador Najib and members of the Prime Minister's TNRC committee on a full range of subjects. Regarding the GoI request letter, Amb. Najib had at first stated that he had spoken with the Prime Minister regarding the inclusion of an indemnification clause in the letter and was told he could write the clause "however he wanted." It appeared thereafter, that Amb. Najib had consulted legal counsel and was told to be cautious, and that the clause, as drafted, might require sanction by the Council of Representatives. Amb. Najib proposed a concept based on United Nations resolution language as a middle ground. Energy Attache is working with Embassy legal counsel to prepare alternative language based on this concept. ¶2. (S). Amb. Najib informed us that his South Korean and German contacts stated that they had no interest in purchasing the yellow cake, and that the Canadians, Australians and the Chinese had not responded at all to the request for expressions of interest. He also stated that the French had granted the TNRC committee members Schengen visas valid for one year and that these visas were waiting at the French Embassy. (Note: In a separate meeting on August 20, Dr. al-Shara'a stated that the visas were not yet ready to be picked up. End Note.) Amb. Najib mentioned that meetings with the French company (and presumably Edlow International) could be held as soon as later this week. When asked about any additional contact with British representatives, Amb. Najib noted that he was still waiting for a response, but that the lack of a response had not disqualified the British from consideration as a purchaser. ¶3. (S). Amb. Najib produced a July 31, 2007, letter from the International Atomic Energy Agency (IAEA). The letter states that, while the IAEA could assist in identifying potential purchasers of the yellow cake, it could not directly arrange for its export or sale. Amb. Najib persisted in stating his need to discuss safeguards requirements with the IAEA, not the identification of potential purchasers. Since that letter arrived, Amb. Najib stated that he has received word from the IAEA that relevant representatives are willing to meet with him, and that he has asked for a formal letter of invitation. ¶4. (S). On August 13, Emboffs accompanied Amb. Najib and representatives of the Army Corps of Engineers on a trip to the TNRC. We viewed the proposed LSA site, Site C, Bunker B, and one location inside the TNRC where barrels of ammonium nitrate are stored. We confirmed that the security upgrades, new concertina wire and communications system were in place, but that the cement barriers had not been placed in front of and behind the gate. Since the visit, Emboffs have been informed that the barriers have been properly placed, but that the local security force had indicated that they would reposition barriers in the road to slow traffic, but not block access to the Site C gate. (Note: In an August 20 meeting with the Minister of Science and Technology, his head of security and others, Energy Attache requested that the TNRC security force be instructed not to move the barriers from in front of and behind the Site C gate. End Note.) ¶5. (S). During a separate discussion with Dr. Mousa al-Atia regarding reimbursement for the USG's repackaging and transportation efforts, Dr. al-Atia mentioned that he would like the USG to donate to the GoI the 20 tons of equipment to be used by the Oak Ridge National Laboratory team. Dr. al-Atia indicated that he planned to raise this during the BAGHDAD 00002788 002 OF 002 negotiations for the amount of reimbursement to the USG. As for the smaller radioactive sources stored at the TNRC, Dr. al-Atia stated that the list of these sources was completed and a separate committee formed within the Ministry of Science and Technology was considering disposal options, including disposal of the sources in the "Russian Channel" at the TNRC. ¶6. (S). In a discussion with Dr. Mohamad al-Shara'a, he stated that he had written the IAEA requesting a copy of the 2003 yellow cake inventory. He stated that he recalled a discrepancy of approximately 600 kilograms of yellow cake between the IAEA inventory and the one performed by the Oak Ridge National Laboratory. ¶7. (S). Lastly, Amb. Najib, in an e-mail message to Energy Attache, stated that he has been receiving death threats and, as a result, may have to "pull out" of his duties on the TNRC committee. (Comment: Amb. Najib's departure as chairman of the TNRC committee would significantly reduce our access to timely information and reduce the committee's ability to make decisions. While he is not a subject matter expert, he is clearly the driving force in contacting potential purchasers and coordinating the entire yellow cake sales effort. End Comment.) CROCKER