VZCZCXRO2794
RR RUEHDU
DE RUEHSA #3012/01 2410752
ZNR UUUUU ZZH
R 290752Z AUG 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 1409
INFO RUEHBJ/AMEMBASSY BEIJING 0646
RUEHLO/AMEMBASSY LONDON 1270
RUEHMO/AMEMBASSY MOSCOW 0654
RUEHFR/AMEMBASSY PARIS 1143
RUEHUL/AMEMBASSY SEOUL 0214
RUEHKO/AMEMBASSY TOKYO 0492
RUEHTN/AMCONSUL CAPE TOWN 4744
RUEHDU/AMCONSUL DURBAN 9096
RUCPDC/DEPT OF COMMERCE WASHDC
RUEHUNV/USMISSION UNVIE VIENNA 0203
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
UNCLAS SECTION 01 OF 02 PRETORIA 003012
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR AF/S, EEB/CBA, ISN
DOE FOR SPERL, PERSON, BIENAWSKI, AND PARKER
E.O. 12958: N/A
TAGS: ENRG TRGY KNNP PREL ECON SF
SUBJECT: SOUTH AFRICA REAFFIRMS ITS NUCLEAR ENERGY POLICY
TO INCREASE RELIANCE ON NUCEAR POWER
REF: A. PRETORIA 2494
B. PRETORIA 317
1. (SBU) SUMMARY: South Africa released a new draft nuclear
energy policy on August 13 for public comment. The draft
policy reaffirms SAG commitment to expanding nuclear power
generation from the current 6 percent to 15 percent of
electric power generation by 2025, lessening dependence on
coal and taking advantage of significant uranium reserves.
Targeting the long-term goal of self-sufficiency in aspects
of the nuclear fuel cycle, the policy considers possible
recycling of spent nuclear fuel and rebuilding South Africa's
enrichment capacity. The SAG stressed that enrichment would
solely be for peaceful purposes, with the aim of producing
nuclear fuel for South Africa's own reactors and for the
international market. Westinghouse views the policy as a
positive step for its pursuit of contracts for constructing
new nuclear power plants in South Africa (Ref B). South
Africa could be a partner in providing comprehensive fuel
services to other partner countries. This might help limit
the spread of nuclear enrichment capabilities to other
countries. END SUMMARY.
2. (SBU) South Africa Department of Minerals and Energy
(DME) Director General Sandile Nogzina and Chief Director:
Nuclear Tseliso Maqubela announced the release for public
comment of the SAG's new draft policy on nuclear energy on
August 13, 2007. According to the draft document, the policy
aims to expand nuclear power generation within South Africa's
electricity mix (from the current 6 percent to 15 percent of
power generation by 2025), to diversify dependence on coal,
to address climate change concerns, to take advantage of the
country's significant uranium deposits, and to create jobs.
In addition, the policy considers possible recycling of spent
nuclear fuel and rebuilding South Africa's uranium enrichment
capacity, originally developed for nuclear weapons, but
voluntarily dismantled before 1994. The SAG stressed that
enrichment would be for peaceful purposes, with the aim of
producing nuclear fuel for South Africa's own nuclear
reactors and for the international market. State electricity
company ESKOM would be tasked to put in place additional
conventional nuclear power stations and to bring to fruition
experimental pebble bed reactors. The announced policy
builds on President Thabo Mbeki's expression in the February
State of the Nation address of commitment to increase South
Africa's reliance on nuclear and renewable energy sources.
Building on previous law and white papers, the SAG unveiled
the draft nuclear energy policy for 60-day public comment
with the aim of finalizing the policy by the end of the year.
A full copy of the draft was e-mailed to AF/S on August 28.
3. (SBU) Westinghouse, which is competing for new nuclear
power plant construction in South Africa, found the draft
nuclear energy policy paper a positive step. The company
intends to submit brief positive comments during the 60-day
comment period. The local Westinghouse General Manager Rita
Bowser highlighted the following points to Energy Officer in
a meeting on August 22:
-- The policy assigns the building of new reactors (new
build) to state electricity company ESKOM and assigns uranium
management and value-chain issues to the Nuclear Energy
Corporation of South Africa (NECSA), separating the new build
aspect of reactors from the more controversial and political
aspects of fuel enrichment and production. The Pressurized
Water Reactor (PWR) procurement does not contain requirements
for enrichment or reprocessing. Therefore, Westinghouse
would not be required to participate in enrichment or
reprocessing.
-- The policy specifies PWR technology for new build,
consistent with Westinghouse,s expectations.
-- The policy addresses the full gamut of "cradle-to-grave"
production, from ore production to spent fuel disposal,
including exercising better control over uranium ore for
export purposes to increase benefits to the domestic economy.
-- The SAG aims to guide actions to develop, promote, and
sustain the nuclear sector in South Africa. The SAG commits
PRETORIA 00003012 002 OF 002
to providing adequate funding to implement its new policy.
Westinghouse perceives itself as well positioned for gaining
the nuclear plant construction opportunity given its
competence and commitment in price, technology transfer,
nuclear safety, the modular size of its reactor, and
localization (i.e., working closely with local suppliers and
engineering services to fill existing gaps in South Africa,s
nuclear service sector). Its probable comments to the SAG
may highlight localization, thus playing to its strength.
4. (SBU) DME Chief Director: Nuclear Tselio Maqubela told
the Embassy energy team on August 27 that the new policy was
comprehensive and serious. Recognizing that enrichment was
inherently political, he noted that bidding companies should
focus on supplying reactors and fuel. Elsewhere, in multiple
conversations with Energy Officer, industry observers have
noted that much of the policy was not new, and was a
repackaging of existing policy.
5. (SBU) COMMENT: The SAG,s newly launched policy paper
represents a significant step forward for South Africa,s
commitment to increasing its reliance on nuclear power. The
prospect of vigorous competition with French AREVA means that
the USG must present itself as a reliable nuclear energy
partner if Westinghouse is to be awarded the contract.
Mission reiterates Ref A recommendation that Energy Secretary
Bodman consider signing the proposed U.S.-S.A. Nuclear R
Cooperation Agreement to demonstrate high level USG support
for this contract. In addition, South Africa could be a
partner in providing comprehensive fuel services to other
partner countries. This might help limit the spread of
nuclear enrichment capabilities to other countries.
Teitelbaum