Uranium marriage - is Astana cheating on Moscow?

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MOSCOW. (RIA Novosti political commentator Maxim Krans) - Kazatomprom, Kazakhstan's national uranium company, will purchase a 10% stake in Westinghouse Electric.

This sensational deal will signal a new stage in the fierce battle for Kazakh uranium. It also shows that despite its passionate assurances of love for Moscow, Astana is pragmatically self-centered when it comes to economic cooperation. It does not fancy putting all of its uranium eggs in the Russian basket.

Yet only yesterday Kazakhstan seemed to have chosen its main strategic partner. Moreover, the marriage had been blessed and sealed by both the Russian and Kazakh presidents when they signed protocols setting up three joint ventures - developing the Budenovskoye uranium deposit in Kazakhstan, enriching uranium in Russia and building small and medium nuclear reactors, including a state-of-the-art reactor for what will be Kazakhstan's first nuclear power plant.

Under the May agreement, the international uranium-enrichment center will be based at the Angarsk chemical plant. The deal is good for both sides - Kazakhstan will supply Russia with uranium in exchange for access to new technologies.

Uranium-starved Russia currently has to use strategic reserves and decommissioned warheads in order to meet its demand for nuclear fuel - it produces a mere 3,000 metric tons of uranium ore out of a required 18,000. Kazakhstan, whose reserves of this strategic resource are second only to Australia's, will provide Russia with 180,000 tons of the stuff.

The two countries have commissioned or are about to launch seven joint ventures with a view to developing close cooperation in the nuclear field. Zarechnoye, the first Russian-Kazakh nuclear facility, started commercial operation in late 2006.

Russian nuclear engineers were quite happy with this breakthrough into the Kazakh nuclear market, where they were looking forward to competing with their colleagues from Kazakh joint ventures with the French, Canadians, Americans and the Japanese. Nor were they deterred by the Kazakh uranium-enrichment deal with the China Guangdong Nuclear Power Group, which will enrich Kazakh uranium. The future seemed cloudless. Then Westinghouse emerged on the horizon.

This major American energy corporation is the chief rival to Rosatom (Russian Nuclear Power Agency). Kazatomprom's intention to purchase a stake in Westinghouse from its majority owner Toshiba (77% of all shares) evoked unanimous consternation in the Russian press; and the company's president, Mukhtar Jakishev, hastened to quell concerns that Russia may lose access to Kazakh uranium: "A deal with Westinghouse will have no effect on relations with our Russian colleagues."

Nonetheless, there are grounds for concern. An anonymous expert from the Japanese Eurasia 21 Research Institute has admitted that an article in the newspaper Nezavisimaya entitled "Russia Ousted from Kazakh Uranium" was not far from the truth. The Tokyo-based analyst wrote that the deal epitomized the intention to restrain Russia.

The Alma Ata-based Kursiv, a weekly business publication, explained where the threat lies: "Using American technologies, Kazakhstan is planning to completely discontinue natural uranium exports by 2014. Instead it intends to export a finished product with higher added value - heat assemblies tailored to Western rather than Russian standards." In addition to that, we will probably have to give up our hopes for lucrative contracts for the construction of power plants.

But maybe this is a turn for the better. After all, the nuclear industry is a strategic asset with a direct bearing on national security, and we have our reservations about our Kazakh partner.

Earlier this year, Sergei Zhalybin, a deputy in the Mazhilis, Kazakhstan's lower chamber of parliament, made a sensational statement. In a question to the government, he reported that through a chain of subsidiaries Kazatomprom had handed several major nuclear facilities to foreigners. They received the Stepnogorsk Chemical Mining Plant, a uranium processing facility; Mynkuduk, a big uranium ore deposit; and Uranenergo, a company that supplies the industry with electricity.

All of these faculties now belong to a certain British New Power Systems Ltd. Zhalybin found out that it is owned by a Singapore-registered consulting company with a charter capital of $100. But this is not all. The latter's only owner is an Australian citizen of Russian descent called Yevgeny Charyshkin. We can only guess why such an intricate chain was built.

Ex-deputy Tatyana Kvyatkovskaya, who joined the investigation of this dramatic case, wonders whether Astana still controls the production, processing and export of uranium on its own territory.

This should probably give Russia food for thought as well.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

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