Cablegate: Argentina: Overview of Civil Nuclear Program

Published: Wed 24 Dec 2008 12:00 PM
R 241200Z DEC 08
E.O. 12958: N/A
REF: STATE 127468
1. (U) This message is sensitive but unclassified, and not
for Internet distribution.
2. (SBU) Summary: Argentina has had a nuclear program for
nearly sixty years and currently draws on two power reactors
to supply approximately nine percent of its total electricity
generation. The country is engaged in ongoing nuclear
research and development, and is a member of the Nuclear
Suppliers Group as a provider of nuclear material and
services in the international market. Argentina is currently
expanding its nuclear power program by completing the
construction of a third nuclear power plant, developing plans
for a fourth, and signing several international nuclear power
cooperation agreements. It is also signatory to the Nuclear
Nonproliferation Treaty, has a well-developed nuclear
regulatory capability, and dedicated state entities for the
administration and oversight of both its domestic and foreign
nuclear programs and projects. Although Argentina has a
well-trained nuclear work force, a generation gap has
lessened its organic ability to staff large-scale start-up
projects without outside assistance. Its cadre of nuclear
experts has been able to sustain a high quality of research
and development, but has not enabled it to conduct
large-scale start-up operations without substantial
involvement by foreign firms. A personnel shortage, coupled
with ambitious expansion plans, opens the door to the
possibility of increased trade in the fabrication of nuclear
components and subsystems, and in the longer term, of
treatment or management of nuclear waste. End Summary.
Plans for expansion of nuclear program
3. (SBU) Argentina has two pressurized heavy water nuclear
power plants in operation, one under construction, three
critical assemblies, three research and isotope production
reactors, 25 major radioactive facilities, and more than
1,500 facilities for medical, industrial, research, or
training purposes which use radioactive material or sources.
The two functioning nuclear power plants, Atucha I and
Embalse, supply the country with approximately nine percent
of its power needs. The third power plant, Atucha II, is
currently under construction after 23 years in mothball
status. Initial planning is underway for a fourth power
reactor. The Government of Argentina (GOA) plans to increase
its nuclear consumption from 9 percent to 15 percent of total
power consumption to meet a perceived growing internal demand
and address rising global prices for fossil fuels.
4. (SBU) Plans for Argentina's nuclear program are based on
four principal objectives: the completion of the Atucha II
power reactor, life cycle extensions for the Atucha I and
Embalse power reactors, the completion of a locally designed
small-scale grid power reactor (the CAREM), and the
construction of a fourth power reactor. Argentina is
motivated to expand its nuclear capability to ease domestic
dependence on imported fuel, to keep energy prices low, and
to build on its reputation as a provider of nuclear materials
and services in the international marketplace.
5. (SBU) All of Argentina's nuclear reactors, both for power
and for research, use low-enriched uranium (LEU), and
Argentina has been an innovator in the use of LEU for both
power and research reactors. Argentina has established the
capability to enrich uranium at a mock-up enrichment facility
at Pilicaneyeu, but has chosen not to conduct actual
enrichment operations. We believe Argentina established the
capability in order to be "grandfathered" into any future
resolutions limiting uranium enrichment to those with an
existing capability.
6. (SBU) Although Argentina has ample natural uranium, it is
not currently engaged in mining operations. Areas where
mining previously occurred are not active, and there is
significant local resistance to uranium mining by
environmental groups. Given market prices, the GOA considers
it cost-effective to purchase uranium on the world market for
domestic processing and use. Its principal source of
concentrated uranium oxide ("yellow cake") is Kazakhstan.
Key Nuclear Decision-Making entities
7. (SBU) Nuclear decision-making falls within two distinct
GOA ministries. For foreign policy issues, the Ministry of
Foreign Affairs (MFA) is the lead agency. The MFA advises on
the GOA's nuclear relationship with the international
community, membership in international control regimes,
non-proliferation issues, and import/export control issues.
The Directorate for International Security and Nuclear
Affairs (DIGAN) is the MFA office responsible for advising
the Office of the Presidency and executing GOA policy.
Ambassador Elsa Kelly is the DIGAN Director, but is scheduled
to retire in February 2009. As of December 2008, the GOA had
not yet named her successor.
8. (SBU) For the development of nuclear power within
Argentina, the Ministry of Federal Planning, Public
Investment and Services is the lead Agency. The current
Minister of Planning is Julio De Vido, a close confidant and
advisor to ex-President Nestor Kirchner and current President
Cristina Fernandez de Kirchner (CFK). De Vido has named
Roberto Baratta as his point man on nuclear issues.
9. (SBU) For technical issues, the National Commission on
Atomic Energy (CNEA, in its Spanish acronym) is the lead
agency to administer the GOA's nuclear plans and programs.
CNEA falls under Minister of Planning De Vido. In mid-2008,
following a public corruption scandal involving misuse of
public funds by the then-CNEA President, De Vido selected
Norma Boero as the new President of CNEA. Boero is a CNEA
careerist and a fuel specialist with significant technical
experience. Boero has dedicated much of the early part of
her tenure to improving accountability within CNEA.
10. (SBU) The Nuclear Regulatory Authority (ARN) is
responsible for establishing and enforcing all regulatory
functions related to nuclear activity in Argentina. This
includes radiological protection issues, nuclear safety and
security, and the licensing of all nuclear facilities, sales,
purchases, and other nuclear matters requiring special
approvals, in accordance with Argentine law and international
agreements to which Argentina is signatory.
11. (SBU) Argentine law gives ARN the ability to conduct
routine or unscheduled inspections of any facility involved
in the use of radioactive material. This includes the
environmental monitoring of mining sites. ARN employs
approximately 190 staff members, with an additional 100
contractors. According to ARN figures, 90 percent of those
positions related directly to technical tasks. The President
of ARN is Dr. Raul Racana, a career nuclear expert with a
strong technical background. ARN is an executive agency
which reports to the Office of the Presidency, which extended
Racana's tenure as President of the organization in 2007. As
an executive agency, ARN is an independent oversight entity
outside the realm of nuclear decision-making. However, as
one of Argentina's principal nuclear entities, ARN wields
considerable bureaucratic influence over domestic nuclear
Domestic Companies in Civil Nuclear Sector
12. (U) There are a limited number of companies within
Argentina involved in the nuclear industry. However, they
run the gamut of nuclear products and services. Their
activities include uranium research, the construction of fuel
and control elements, reactor and plant design and
construction, and facility administration. Should Argentina
resume domestic uranium mining, their activities would expand
to include mining activities. The principal companies are
the following:
- Applied Research (INVAP by its Spanish acronym) is a
high-tech company owned by Argentina's Rio Negro Province,
but functioning as a private company without public subsidy.
INVAP provides nuclear design and fabrication services to
Argentina and other countries. Because of its unique
capabilities, INVAP is a principal private contractor to CNEA
and is currently involved in the resurrection of the Atucha
II nuclear facility. Although INVAP's General Manager/CEO,
Dr. Hector Otheguy runs INVAP on a day-to-day basis, four of
the members of its Board of Directors are CNEA officials, and
two are appointed by Rio Negro Province. As of late 2007,
Otheguy or other senior INVAP officials routinely accompanied
the Argentine President, or senior GOA officials, on state
visits and official delegations.
- Nucleo-Electrica Argentina (NA-S.A) is the private company
which manages Argentina's two current power reactors (Atucha
I and Embalse) and will run Atucha II when it reaches
- CONUAR S.A is a private company which constructs fuel
elements and control rods for use in Argentine nuclear
reactors. Grupo Perez Companc is a 67 percent share holder
in CONUAR S.A., with CNEA owning the remaining 33 percent.
In addition to its production of fuel elements and other
components for Argentine nuclear reactors, CONUAR S.A. is a
nuclear services provider for Argentina's research reactors.
In addition to other Argentine companies and state entities,
CONUAR S.A. does business with public and private sector
entities in Belgium, the United Kingdom, the European Union,
Romania, Canada, and Brazil.
- DIOXITEK is a parastatal company owned 99 percent by CNEA
and one percent by the Province of Mendoza. DIOXITEK
produces uranium oxide and cobalt 60 for conversion into fuel
for nuclear reactors. Currently, DIOXITEK obtains "yellow
cake" from outside Argentina for domestic conversion to low
enriched uranium for use in the country's reactors.
- ENSI S.E. (Neuquen Business for Engineering Services, State
Enterprise, in English) is another parastatal company, owned
by CNEA and the government of Neuquen Province. ENSI S.E.
administers the heavy water plant in Arroyito, Neuquen.
Arroyito produces heavy water for use in Argentine reactors.
As of November 2008, it was not exporting heavy water, all of
which the GOA needed for its expanding program of additional
reactors for power generation.
Local Manufacturing Base
13. (SBU) Argentina has a domestic ability to meet many of
its current needs in the nuclear field. However, its
expansion plans will likely stretch domestic resources to
their maximum. The companies mentioned above are currently
fully committed to the Atucha II restart, especially in the
production of fuel elements. CONUAR has significantly
increased its operations to produce fuel rods and fuel rod
assemblies for the facility and INVAP is involved as a
contractor in the fabrication of specialized welding
machines, and in other aspects of the project. Some outside
participation is likely, as Argentina submits other aspects
of Atucha II to an open competitive bid process. Plans to
construct a fourth power reactor, unlikely before 2012, will
also open up opportunities for sales of U.S-origin components
and sub-systems.
Nuclear Trained Work Force
14. (SBU) Argentina has a well-trained but aging nuclear
work force which has experienced a significant generation
gap. Argentina embarked aggressively on its nuclear program
in the 1950s, resulting in a cadre of skilled physicists,
engineers, and chemists. Many of this generation have been
lost to attrition, and many of the subsequent generation left
Argentina during difficult economic times to seek more
profitable employment in Europe or the United States.
Although Argentina has the academic capacity to produce
skilled technicians, it has not been wholly successful in
retaining them.
15. (SBU) A further problem is the lack of project management
capability within public sector nuclear entities. Until
recently, Argentina had not embarked on any major nuclear
projects in many years. The relative lack of activity was
detrimental to the country's ability to manage a project from
start to finish. This has caused the GOA to rely on private
sector contractors with experience in reactor start-ups.
INVAP, which sold start-up research reactors and major
sub-systems to both Egypt, Australia, Peru and Algeria, has
provided know-how to the Atucha II project.
16. (SBU) Argentina is slowly addressing the effects of the
generation gap through the continued training of highly
qualified technicians and scientists. Improved economic
conditions in Argentina since 2003, relative to the economic
collapse of 2001, improved the GOA's ability to retain their
best students for the domestic nuclear work force. A
possible downturn in the Argentine economy in 2009 could,
however, complicate efforts to retain members of the younger
generation of nuclear experts.
Opportunities for U.S. Industry
17. (SBU) U.S.-based company Westinghouse is heavily
committed in Argentina, as are several smaller U.S. firms
which serve as subcontractors to Argentine entities. U.S.
firms produce zirconium rods for use in fuel bundles, and
there is significant interaction between Argentine companies
and the U.S. university and National Lab systems. One
developing technology between INVAP and Westinghouse is the
use of LEU Molybdenum targets for cancer treatment.
18. (SBU) In addition to the ongoing commerce with U.S.
companies, there is room for expansion of trade into the
field of waste processing and storage. Argentine nuclear
officials involved in the "back-end" of the nuclear fuel
cycle have made candid comments that Argentina needs to
pursue a long-term solution to its increasing stores of spent
fuel rods and other forms of nuclear waste. U.S. companies
specializing in long-term storage of spent fuel may find the
GOA receptive to business discussions. The ongoing Atucha II
project, and plans for the construction of a fourth reactor,
may also provide an opening to U.S. firms with experience in
the construction of LEU reactors and subsystems.
Foreign Competitors
19. (SBU) The Canadian firm Atomic Energy of Canada, LTD.
(AECL) has significant business dealings in the Argentine
nuclear sector, having built the Embalse nuclear power plant
in the 1970-80s and signed a Memorandum of Understanding for
its refurbishment in 2006. AECL also signed an MO to restart
the Atucha II project, and to begin exploratory work on a
possible fourth power reactor. The German firm Siemens
constructed the Atucha I reactor in the 1960s, and was the
contractor for Atucha II before the project went into
mothballs in the mid-1980s. Siemens has a tangential role in
current nuclear operations, likely limited to assisting
Atucha II project by identifying technicians who formerly
participated in its construction.
20. (SBU) Argentina signed a nuclear cooperation agreement
with Russia in December 2008, but the details of the
agreement are still unclear. Argentina also signed a broad
nuclear agreement with Brazil in 2007. The agreement with
Brazil established the "Binational Enrichment Company"
(COBEN), but little concrete progress seems to have occurred
following the initial announcement. One issue which has
since stalled was a desire of the GOB to build a
nuclear-powered submarine with assistance from the Argentine
nuclear community. In December 2008, Argentina and the
Republic of South Africa signed an agreement to share
technology on the peaceful use of nuclear energy. The
concrete results of that agreement are still unclear. Recent
history demonstrates the GOA's eagerness to sign broad
international cooperation agreements, which result in little
actual business activity or technology transfer.
Political Considerations
21. (SBU) Argentina is signatory to the Treaty of Tlatalelco,
the Nuclear Nonproliferation Treaty, and other bilateral and
multilateral nonproliferation agreements. Decisions to enter
into agreements with nuclear supplier states are subject to
the requirements of Argentina's nonproliferation commitments,
which the GOA takes seriously. Argentina prefers to conduct
its nuclear activities under the rubric of the International
Atomic Energy Agency (IAEA). It has ratified the Vienna
Convention on Civil Liability for Nuclear Damage and the
Convention on Supplementary Compensation for Nuclear Damage
(CSC). Argentina and Brazil have successfully addressed old
tensions over respective nuclear programs through the
Brazilian-Argentina Agency for Accounting and Control of
Nuclear Materials (ABACC), in which the IAEA also
participates. ABACC facilitates a robust joint inspection
regime of civilian nuclear facilities between the two
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