Nuclear States’ Double Standards

By Valerie Epps From time to time, the world community becomes concerned that a country, or other entity, not currently possessing nuclear weapons, might be on the road to acquiring them. First it was Iraq, then it was Iran or al-Qaida. Recently, the discussion has shifted to trying to persuade the North Koreans to abandon further development of nuclear weapons. Most people are rightly convinced that the fewer nuclear weapons there are, and the fewer people with access to such weapons, the better off we all are. But there is something decidedly odd about the structure of the legal argument about the right to possess nuclear weapons. Groups of nations have often come together to ban certain sorts of weapons. The 1868 Declaration of St. Petersburg prohibited certain explosive projectiles; biological weapons were outlawed in 1972; chemical weapons in 1993; land mines in 1997; and a long list of other weapons have also been declared illegal. These weapons were banned because they were perceived as violating the laws of war. Although soldiers are permitted to kill the enemy in warfare, weapons that cause unnecessary suffering to combatants are prohibited. Civilians may never be targeted in warfare and thus a weapon that cannot distinguish between military and civilian targets violates the law, as does a weapon, which although targeting the military, in fact, kills a disproportionate number of civilians. Whenever there is sufficient sentiment to ban a weapon, states draft a treaty, work out the final language, and sign on to the ban. These treaties contemplate a total ban of the designated weapon. They do not list countries that are permitted to retain the prohibited weapon, nor do parties to such treaties indicate that states who chose not to ratify the treaty will be entirely free to acquire the banned weapon. Most of us learn early in our lives that if we expect rules that we set to be respected, we cannot promulgate the rule and, at the same time, grant ourselves a permanent exception. The main treaty that deals with nuclear weapons, the 1968 Nuclear Non-Proliferation Treaty, has a very different and fundamentally flawed structure. This treaty specifically permits five states ― China, France, Russia, the U.K. and the U.S. ― to retain nuclear weapons, but any other party to the treaty must agree to forgo the acquisition of nuclear weapons. States that refuse to ratify the treaty, such as Cuba, Pakistan, India and Israel are free to acquire such weapons, and three of them have done so. Why are states and other entities so eager to retain or acquire nuclear weapons? The motive is the same whether a state already has such weapons or hopes to acquire them. Nuclear weapons are perceived as giving the possessor a huge military advantage. The determination on the part of the five nuclear declared states to create a structure that allows them to retain nuclear weapons while denying ownership to other nations, is exactly the same sort of determination that we see being brought to bear by states, and other non-state actors, to acquire such weapons. They all want military superiority. Should nuclear weapons be banned? Such weapons have the capacity to cause untold suffering indiscriminately to military and civilians alike. They can cause vast environmental and economic devastation, not only in the area and at the time of detonation, but throughout the world and for future generations. Surely nuclear weapons, including the so-called ``low-yield" nuclear weapons, carve out a far more destructive path than all of the weapons previously coming under the regime of a total ban. Nuclear weapons certainly need to be prohibited, but they must be prohibited for all states and all entities. Article 6 of the Non-Proliferation Treaty requires all states party to the treaty ``to pursue negotiations on nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control." The International Court of Justice has described this as a binding treaty obligation. As long as some states, including the U.S. and China, insist on their right to retain nuclear weapons, other states will wish to own such weapons and will work out ways to acquire them, even if it means violating treaty obligations. If all the nuclear states would get together and start negotiations toward the total elimination of nuclear weapons, including their own weapons, with a tough verification system applicable to all, the ``problem" of North Korea, Iran and all of the other nuclear aspirants would begin to disappear. Under the present flawed structure, by which the nuclear states have legalized the ultimate double standard, all we have to look forward to is a new nuclear aspirant on the horizon every time we turn around. Trying to eliminate nuclear weapons will surely be a monumental task but its success might just ensure us all a future in a hopeful world. Valerie Epps is a visiting professor of law at Hongik University College of Law, Seoul, and professor of law and director of the International Law Concentration, Suffolk University Law School, Boston. She can be reached at vepps@suffolk.edu.

Final Warning on India Nukes Deal

By MADHUR SINGH/NEW DELHI

During the final full dress rehearsal for India's Republic Day Parade in New Delhi, a replica of India's Agni-III missile passes by spectators. The Agni is capable of carrying a nuclear warhead.

Raveendran / AFP / Getty

Assistant Secretary of State Richard Boucher last week visited New Delhi with a sharp reminder: it's now or never for the Indo-U.S. Civilian Nuclear Cooperation Agreement, which has been stalled since India's Prime Minister Manmohan Singh failed to garner the votes from within his own coalition to pass the deal.

Washington is warning that given the U.S. presidential campaign season, India has until June to complete all the steps required to get the agreement — which provides for civilian nuclear cooperation between the two countries without India having to sign the Comprehensive Test Ban Treaty — before Congress for a yes or no vote. Having invested immense political capital in the deal, the Bush administration is keen to see it completed, and has been quietly pressuring New Delhi to expedite matters. Last week, former Under Secretary of State Nicholas Burns publicly asked India to take a "courageous decision" in view of the "short timelines". Before that, on February 20, U.S. Senators Chuck Hagel, John Kerry and Joe Biden has visited New Delhi with the same message.

Making haste, however, is proving difficult for India's government, because of the resistance to the deal by opposition parties as well as the leftist parties in the ruling coalition who have delayed the deal at every step since it was first proposed in July 2005. The government has sidestepped this resistance by agreeing to hold talks with leftist allies, buying itself time to complete the requirements to get the deal before the U.S. Congress. But now, time is running out. Experts agree that the current deal is the best one India can get: it allows India to trade internationally in nuclear materials and technology, without signing the CTBT and despite carrying on with its nuclear weapons program. And it has the backing of a congressional consensus in the U.S. sufficient to win endorsement on Capitol Hill. If the deal is not passed during the tenure of the current administration, however, its successor might seek to renegotiate on terms less favorable to India.

The realization that Washington's position may harden has prompted India's power brokers to burn the midnight oil in order to meet the deadlines. This requires concluding, by the end of this month, an agreement with the International Atomic Energy Agency to regulate India's civilian nuclear energy program and to ensure that it remains separate from its nuclear weapons program. By May, they must secure an exemption from the Nuclear Suppliers Group, which controls international trade in nuclear materials, to rules that preclude supplying states that are not signatory to the Non-Proliferation Treaty, and India's failure to sign the Test Ban Treaty will not go down easily with some of its members. India reiterated its support for universal nuclear disarmament at the Conference on Disarmament in Geneva last month, and proposed a seven-point agenda. Getting an NSG waiver will be tricky, but the U.S. has assured India of its support in convincing skeptics.

With opponents of the deal — mainly the Communist Party of India (Marxist) and the Hindu-nationalist Bharatiya Janata Party — digging their heels in, the June deadline may prompt the government to tell its leftist allies to take a hike. Riding high on a popular budget announced last week — which substantially reduced income tax and waived $150 billion worth of loans owed by small and marginal farmers — the government is in a good position to face elections. Politicians know that the average citizen cares little about the nuclear deal, as the CPI (M) learned last September: While the CPI (M) was focusing its attention on holding up the nuclear deal in New Delhi, in Bengal, the state it governs, villagers angry at food shortages and corruption broke into a riot. Many CPI (M) cadres were assaulted in riots over the following weeks. Most Indians may, in fact, be glad to get the nuclear deal out of the way, so that politicians can get on with working on issues more important in the minds of the citizenry.

http://www.time.com/

Nuclear Energy Not Part of Volvo's Environmental Goals

by EVANDER KLUM

Volvo has recently announced that its truck-making business has signed an energy supply contract with utility Vattenfall. The contract specified that none of the company’s electricity will be generated from nuclear power plants by 2008.

According to Volvo’s environmental chief Inge Horkeby, the nuclear energy is not in line with the company’s environmental goals. She told the Dagens Nyheter newspaper, “We place nuclear energy far down the scale. It’s not sustainable from a number of aspects.”

“The raw materials used to produce nuclear energy are a finite resource and the waste management problem has not been solved,” she added.

In contrast however, a position statement on Volvo’s website said, “Volvo is not opposed to nuclear energy… Taking into account the climate issue, our view is that nuclear energy is needed in the energy system – perhaps even more nuclear power than today.”

Under the agreement between Volvo and Vattenfall, only Sweden is covered. The Swedish automaker said, “We have agreed on receiving renewable energy – nuclear energy is not renewable. The reason we made this demand is to help bring other alternative energy sources to the market. Accordingly, the aim of the agreement is not to eliminate nuclear energy but to choose alternatives in an effort to increase the availability of renewable energy on the market.” Thus, the company is still eager to continue the use of nuclear-generated electricity outside Sweden.

Volvo said, in its statement, “We would like to see that a parliamentary commission is appointed with the mission of investigating what the conditions are for continued use of nuclear power – particularly taking into account the fourth-generation.”

“We are not prepared to say that we should expand nuclear energy. What we are prepared to say, however, is that we believe that it would be favourable if we dared to again take a look and seriously investigate the conditions for the future of nuclear energy against the background of the technology development that has occurred since the referendum in 1980. There has not been any new thinking about nuclear energy in Sweden since then,” it continued.

Since the 1970s, Volvo holds environmental consideration as one of its core values. The company has said that its long-term objectives included the increase in use of the carbon dioxide-neutral energy, the reduction of energy consumption by 50% per manufactured unit and the no longer use of coal or oil for heating.

Volvo also stated its goals in powering all of its worldwide plants with the use of renewable energy sources. The company said that its truck plant in Ghent, Belgium, is actually the world’s first vehicle factory to be totally carbon dioxide-free. Most of the plant’s energy is being supplied by onsite wind turbines and a biomass production facility. Some electricity is being provided by Electrabel from renewable sources. At present, the plant produces 40,000 truck units (equipped with quality Volvo floor mats and other genuine parts) annually.

Volvo Trucks’ Europe Division President Claes Nilsson said, “We are fully aware of the environmental problems we have in the world today and we’re working to reduce emissions of carbon dioxide in both fixed facilities and from vehicles.”

“However, for practical and economic reasons it is simpler to make a factory carbon-dioxide free, something we achieved within a period of two years.”

China's Battle for African Uranium

by JAMES FINCH

As reported by the Wall Street Journal, Sunday night’s revelations that China National Nuclear Corp (CNNC) may strengthen its ties to UraMin could represent a broader picture than an ordinary acquisition of a near-term uranium producer.

There is an ongoing global war for energy security, which appears to be politically inspired. China and Russia are the main opponents, especially in Africa, but have rivaled each other, over the past several years, in Central Asia. The goal for both nations is not only energy security but political influence and alliance over their targeted territories.

On May 12th, Russia, Kazakhstan and Turkmenistan signed a declaration to upgrade and expand transport pipelines along the Caspian Sea coast directly to Russia. The project relies mainly upon the vast Turkmen gas reserves. This is part of Russia’s growing monopoly of Central Asian gas. Although Europe was shocked by Vladimir Putin’s new arrangement, the Chinese were flabbergasted.

We’ve been following developments in Central Asia, and had reported upon milestone events in both of our uranium publications, and again (with far greater details) in our soon-to-be-released Investing in China’s Energy Crisis.

After more than two decades in power, Turkmen strongman Saparmurat Niyazov passed away this past December. In April 2006, Niyazov had signed a framework agreement on oil and gas cooperation. By August, Niyazov had announced a pipeline, designed to pump gas to China, would be opened in 2009. The deal died with the dictator, it appears.

A few weeks ago, a spokesman for China’s National Reform and Development Committee announced China was unlikely to reach its natural gas target of a 10-percent portion of the country’s energy portfolio by 2010. Increasingly, Russia has shut China out of Central Asia in obtaining long-term, multiple energy sources.

Aside from South America, where China has strengthened the country’s ties with Venezuela and others, Africa is a prime hunting ground for China’s future energy security. China has established a strong foothold in the Sudan for petroleum. But, Africa is rich in uranium deposits.

According to a report published by the International Atomic Energy Agency in 2005, Africa has 18 percent of the world’s known recoverable uranium resources – about six percent less than Australia and one percent more than Kazakhstan. We began coverage on both Namibia and Niger, after Russia sent a delegation to Egypt to discuss the nuclear renaissance. At the time, our research pointed to Africa, particularly those countries, as ripe for future uranium production. Chinese prospectors raced to Niger within weeks after our initial coverage.

During 2006, Namibia became saturated with numerous exploration plays hoping to capitalize on the country’s uranium resources and relaxed environment. Consequently, the Namibian Minister of Mines and Energy closed the country’s exploration window. Since then, Niger has become a new hunting ground. We expect this country to become just as saturated as Namibia has been.

China is eager to capitalize upon the continent’s uranium resources before Russia outmaneuvers them as has been accomplished in Central Asia.

According to an email we received from TradeTech’s Gene Clark, after presenting at the China Power & Alternative Energy Summit on May 18th, he told us China’s official target for nuclear power capacity was ‘40 GWe by 2020 and another 18 GWe in the following five-year plan.’ This confirms China’s aggressive plans to acquire sufficient uranium to reach this capacity, and would be foolish to rely on just Australia.

Typically, China has built its energy portfolio through numerous deals across multiple regions. This past October, Yang Changli, vice president of China National Nuclear, said it would seek uranium not only from Australia, but from Canada, Kazakhstan, South Africa and Namibia. In an interview Yang gave during the 15th Pacific Basin Nuclear Conference, he said, “China won't rely on any single supplier of uranium because of energy security considerations.

Namibia is the First African Focus of Uranium Politiques

On May 14th, Russia’s second-largest bank Vneshtorgbank and Russia’s state-run nuclear exporter Tekhsnabexport announced they were considered a joint venture to operate in Namibia through licenses they directly hold and through investments in other companies which have obtained licenses in Namibia.

In March Russian Prime Minister Mikhail Fradkov announced his country was prepared to building nuclear plants in Namibia. Neighboring South Africa had previously warned Namibia to expect reductions in energy supplies. Namibia is dependent upon South Africa for electricity and has forecast an energy deficit of 300 megawatts within the next three years.

On May 10th, Russia and Kazakhstan signed an agreement to set up the International Uranium Enrichment Center, anticipated to come onstream by 2013. As part of this announcement, Sergei Kiriyenko, head of the Federal Nuclear Power Agency, said, “Any country can become a member of the center by signing an intergovernmental agreement granting it guaranteed access to uranium enrichment services.” We conclude Namibia may wish to participate in this arrangement.

Enter CNNC on Sunday night. The Chinese company’s deputy general manager for uranium procurement announced to Bloomberg News that CNNC and UraMin will start ‘more formal’ talks this week.

UraMin is a prime acquisition candidate for the Chinese because of its uranium prospects in both Namibia and Niger. The company also has holdings in South Africa and the Central African Republic.

We are now facing a new era of uranium politics or rather ‘Uranium Politiques.’ And there is good reason for this to escalate. Yesterday, the U.S. Energy Information Administration issued ‘International Energy Outlook 2007.’ The report announced, “World marketed energy is expected to grow by 57 percent between 2004 and 2030.”

The most rapid growth in energy demand is anticipated in non-OECD Asia. The majority of this energy demand growth would come from China and India. This was the reference case – the middle ground of growth.

Also on Monday, leading Russian nuclear expert Yevgeny Velikhov, head of the Kurchatov Institute, told reporters at a news conference that the recent surge in uranium prices “may still grow by another order of magnitude.” He believes the uranium price will continue to rise as global uranium demand soars while supplies remain tight. “The global energy market is very turbulent,” Velikhov said. “The uranium price can hit any mark at a time of crisis.” Ironically, both crisis and turbulence have come about because of the Asian and Russian scramble to lock-up the uranium resources of entire countries.

The energy battle in Africa is good news for the two front-runners in Namibia: UraMin and Forsys Metals. We’ve called this a horse race, over the past several months. Both endeavor to become the ‘next miner’ following Paladin Resources in this country.

Yet, both companies are vulnerable to acquisition efforts by Russian or Chinese companies. Or either could be acquired by one or more majors hoping to build up their uranium reserves. In the case of Rio Tinto, acquiring one or both could mean expanding uranium operations in this country.

Acquisition Candidates

Just as the announcement by Energy Metals Corp, regarding a potential sale of the company, fueled weekend speculation as to the ‘next’ takeover candidates, the same could occur this week with African acquisition candidates.

One might be misled into believing China would focus on Niger, where the company has built a foundation, and Russia’s focus would remain in Namibia. However, in a state visit to China this week, Namibian Defense force chief exchanged views with Guo Boxiong, Central Military Commission vice chairman, on promoting relations between the two countries.

In February, Chinese President Hu Jintao visited Namibia to sign an economic deal with Namibia giving the country a grant of US$4.3 million and an interest-free loan of the same amount. Reportedly, some of the money would be used to boost group tourism from China to Namibia. This is the same tactic China has utilized in courting relationships in South America to help develop natural resource deals.

With US$1.2 trillion in foreign currency reserves, China is exercising its financial biceps. In March, the country formed the Huijin Fund as the state’s investment arm. Up to US$400 billion have reportedly been placed in this fund for investment purposes. On Sunday night, the Huijin Fund invested US$3 billion to purchase a stake in about 9.9 percent of the Blackstone private equity firm. Our research suggests the fund is likely to strongly invest in natural resources.

On this basis, we can not rule out a simple carving of Africa. We don’t believe China will quietly step back and focus the country’s uranium acquisition efforts in Niger, permitting Russia to concentrate on Namibia and South African uranium.

In Niger, we covered two ‘early days’ prospective uranium juniors over a year ago. North Atlantic Resources acquired a uranium permit in the 1900-square kilometer Abelajouad in this country. This past April, the company increased its holdings to nearly 3,000 square kilometers. In late April, Northwestern Mineral Ventures announced uranium mineralization in assays from rock samples after a first-pass reconnaissance on its In Gall and Irhazer uranium properties. Both would need to further explore their properties before attracting serious interest from the Chinese.

However, in Namibia both UraMin and Forsys Metals are actively progressing toward mining uranium on their properties. Either could be the first, but we believe both should become winners in the uranium bull market. Because China has carefully aligned with UraMin, or at least shown an inkling to do so, we suspect Russia might begin to look more carefully at Forsys Metals. This is purely speculation based upon our premise of ‘uranium Politiques.’ We do not have any ‘inside track’ on this matter.

Fortunately, we had the opportunity to chat with Forsys chief executive Duane Parnham late last week. His company had announced the completion of the pre-feasibility study on the company’s Valencia uranium deposit in Namibia. We missed the company’s conference call, but were allowed the opportunity to discuss his company’s prospects and future plans during a telephone call.

The company’s pre-feasibility study was prepared by Australia-based Snowden Mining, which used the guidelines of Australia’s JORC code. Subsequently, the Valencia uranium mineral reserve was classified as Probable Reserves. These were calculated at 24 million pounds U3O8.

We asked about production. “We are now modeling 2.4 million pounds per year,” Parnham told us. He expects to payback in less than two years. With Forsys as with all near-term producers, some early conversations have begun about pre-selling the company’s uranium production after production has commenced.

His company’s news release talked about six month of stripping during the initial part of the operation so we started there. “We’ll start when we get a mining license and then looking at production.” When will the company complete its ongoing environmental assessment? “We are hoping to have an environmental decision by year end,” Parnham told us. “We are hoping to have enough data to apply for a mining license in early 2008. If that’s successful, then obviously the decision to go forward will be made at that time.”

For the time being, the company plans to expand its resource. “The pre-feasibility is just the first snapshot of the situation,” he said. “We are finding the pit optimization study is only looking at a very small portion of the overall resource.” Does that mean the resource is actually larger, then? “It’s a heck of a lot bigger,” he told us. “It’s just a function of how much data you have available to punch into the model. Then, how much does the model give you back? The evaluation process is ongoing. You’ll probably see a change in the pit design very shortly because we have the ability to move more resource into the reserve category.”

We talked about his company’s horse race with UraMin. How does it look? “Neck and neck, toe to toe,” Parnham said. “I think it shows there’s opportunity in Namibia, and that’s good that there are a number of us working for a common goal.”

Finally, we asked what has emerged as the key question: Is Forsys a ripe plum for the picking. He offered both sides of the coin. “Where the real opportunity lies is putting a property into production,” he responded. “The operation isn’t all that difficult so it’s not a deposit that our expanding team couldn’t put into production.” And then Parnham left the door open. “Anything can happen. It’s an open market, and we are a public company. But, we are certainly geared toward putting this into production.”

And from what we’ve seen among the recent, significant consolidations, those companies who have commenced production, and those closest to production, are the prime acquisition candidates. Why should companies developing projects in Africa become the exception instead of the rule? Especially when two super powers are both eagerly trying to establish stronger uranium footholds in this continent.

COPYRIGHT© 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. His focus on the uranium mining and nuclear fuel sector resulted in the widely popular “Investing in the Great Uranium Bull Market,” which is now available on http://www.stockinterview.com and on http://www.amazon.com

Related Articles - China, Africa, Uranium, Namibia,

Iran Says First Nuclear Plant to Start in Mid-2008

by VOA News

Iran says its first nuclear power plant will begin operating in mid-2008.

Foreign Minister Manouchehr Mottaki told state media Sunday that the Bushehr nuclear power station will start generating electricity next year at 50 percent of its 1,000 megawatt capacity.

Construction of the reactor has been delayed by payment disputes between Russia and Iran.

Earlier this month, the Russian company that is completing the construction said the plant will not be launched before late 2008.

Russia began making internationally-supervised deliveries of nuclear fuel to the plant this month under terms that mandate the return of all spent fuel to Russia.

Both Russia and the United States said the fuel deliveries make it unnecessary for Iran to enrich its own nuclear fuel.

But Tehran says it needs to make its own fuel to supply a series of new nuclear power plants it plans to build.

Iranian officials have said they plan to generate 20,000 megawatts of electricity through nuclear energy in the next two decades.

The United States and its Western allies have accused Iran of attempting to develop nuclear weapons under the guise of its civilian nuclear program.

Tehran argues that its nuclear work is strictly for civilian purposes.

Some information for this report was provided by AFP, AP and Reuters.