S E C R E T BAGHDAD 004126

SIPDIS

NOFORN
SIPDIS

STATE FOR NEA-I, PM

E.O. 12958: DECL: 12/17/2017
TAGS: ENRG IZ KNNP PARM PREL
SUBJECT: EMBASSY-GOI 12/16 MEETING ON URANIUM REMOVAL FROM
TUWAITHA NUCLEAR COMPLEX

REF: STATE 163968

Classified By: ECONOMIC MINISTER CHARLES P. RIES FOR REASONS 1.4 A,B,D,
F,H

1.(S/NF/REL AGCU) SUMMARY: On 12/16 EMIN met with Surood
Najib and agreed on a schedule for removing 4 irradiators and
554 metric tons (MT) of uranium yellow cake (yellow cake)
from Iraq. Prime Minister Maliki's (PM) letter to the USG
authorizing the removals is expected soon.

(COMMENT: Najib called Energy Attach the evening of 12/17
saying PM decided to review Embassy's 12/8 request with the
Cabinet before responding. Najib said nothing substantively
had changed from his discussion with EMIN on 12/16 and he
thought the PM's letter would be forthcoming very soon.
(NOTE: the next Cabinet meeting is 12/19.) Responding to
Energy Attach's inquiry Najib indicated the PM's Advisor(s)
were not interested in pursuing the storage option for yellow
cake. END COMMENT.)

On 1/3/08 Najib will commence yellow cake contract
negotiations with GE/Hitachi in DC. (COMMENT: Should Areva
send a letter of interest on the purchase of yellow-cake
Najib can met with them separately. Separately, Emb.
understands GE/Hitachi has agreed to meet Najib in DC on 1/3.
END COMMENT.) On 1/10 (fallback 1/15) EMIN and Najib will
discuss whether the yellow cake sales agreement will be
signed in January.If that's unlikely Najib will negotiate for
storage in a third country (TBD). Once GOI's sales proceeds
and USG's costs (for yellow cake transport) are known EMIN
and Najib have agreed to negotiate cost-sharing of the yellow
cake's packing and transport as well as possible acquisition
of substitute devices for the 4 irradiators. END SUMMARY.


2. (S/NF/REL AGCU) On 12/16 EMIN met with Surood Najib
(Najib), Chairman Tuwaitha Committee, and agreed on a
schedule for removing 4 irradiators and 554 metric tons (MT)
of uranium yellow cake (yellow cake) from Iraq. Prime
Minister Maliki's (PM) letter to the USG authorizing the
removals is expected soon. (COMMENT: Najib called Energy
Attach the evening of 12/17 to advise that PM has decided to
review Embassy's 12/8 request with the Cabinet before
responding. Najib said nothing substantively had changed from
his discussion with EMIN on 12/16 and he thought the PM's
letter would be forthcoming very soon. (The Cabinet meets on
12/19.) END COMMENT.)


3. (S) EMIN and Najib (hereafter, They, referring to both)
agreed, in 12/16 meeting, Najib would meet GE/Hitachi in DC
on 1/3 to negotiate a sales contract for the yellow
cake.(COMMENT: The PM is the authorized person to sign such a
contract. END COMMENT.) They agreed that by 1/10 (fallback
1/15) EMIN and Najib would discuss if GOI will execute a
yellow cake sales agreement before January 31st. If this
contract execution is unlikely Najib agreed to negotiate a
storage agreement with a facility in a third country (TBD).
(COMMENT: Najib said that he needed to bring the storage
option to the PM's attention since it hadn't yet been
discussed. Later Najib told Energy Attach, in 12/17 telecom,
that PM's Advisors expressed no interest in using the storage
option. Najib said they want "to get rid of it (yellow cake)
once and for all".END COMMENT.)


4. (S/NF REL AGCU) They agreed to negotiate cost-sharing on
the USG's yellow cake packaging and transport expenditures,
as well as acquiring a non-nuclear substitute device for the
irradiators once the movement costs and sales proceeds
figures are available. (COMMENT: Najib stated, during 12/16
meeting, that GOI wants compensation for the irradiators and
it intends to receive a "fair price" from the yellow cake
sale. Najib added that the PM's Advisors said that "if they
(US) want to move the it (yellow cake out of Iraq) why don't
they pay for it?".Najib concluded that "it'll be difficult to
get Iraq to contribute." END COMMENT.)


5. (S) Najib agreed that the yellow cake sales proceeds would
go through its DFI Account in the NY Branch of the US Federal
Reserve Bank.He agreed to hire a law firm and consultant to
assist him in the GE/Hitachi contract negotiations.


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