EMBASSY-GOI 12/16 MEETING ON URANIUM REMOVAL FROM

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. CROCKER