Kazakhstan Opens Worlds First Nuclear Fuel Bank

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The International Atomic Energy Agency (IAEA) took delivery of a shipment of low enriched uranium (LEU) at a purpose-built facility in Kazakhstan today, officially establishing the IAEA LEU Bank aimed at providing assurance to countries about the availability of nuclear fuel.

Owned by the IAEA and hosted by Kazakhstan, the IAEA LEU Bank is one of the Agency’s most ambitious and challenging projects since it was founded in 1957. “With the arrival of the first shipment, the IAEA LEU Bank is now established and operational,” IAEA Acting Director General Cornel Feruta said. “It is the first time the Agency has undertaken a project of this legal, operational and logistical complexity.”

It was all fairly low key but the shipment of grey steel barrels that finally made it to the eastern edge of the Kazakh steppe from France via Russia, has significant global implications for the world. Inside the 32 barrels were 90 tonnes of low-enriched uranium, the first consignment to be laid-down in the warehouse run by the International Atomic Energy Agency (IAEA). Other than the IAEA branding, the blue and white warehouse looks fairly non-descript, the sort of giant shed you see on industrial parks across the world. However, this is the IAEA’s Low Enriched-Uranium Fuel Bank, designed to allow countries to buy fuel for a nuclear power plant.

This is an ambitious scheme and one that has yet to be tested properly. It has taken years to get to this point, a deal to host the fuel bank was unveiled by Kazakhstan in 2015, and any deal to actually sell the low enriched uranium to a country has yet to be agreed. What it does have, though, is goodwill and kudos. For Kazakhstan, the IAEA’s Low Enriched-Uranium Fuel Bank is a chance to flaunt its credentials as a harbinger of a new nuclear power age, to market its potential as a technology for peace. Former President Nursultan Nazarbayev has made much of his decision in the early 1990s to give up the nuclear weapons that Kazakhstan inherited after the collapse of the Soviet Union, allegedly lobbying the Nobel Peace Prize for an award. The location of the fuel bank, in the town of Ust-Kamenogorsk near Semey in eastern Kazakhstan, is also a poignant choice of location. Semey still carries the memories of the Soviet Union’s nuclear weapons test site. Kazatomprom, which is majority-owned by the Kazakh government, is also the world’s biggest uranium miner. The nuclear power industry needs a boost. It has fallen out of favour since a tsunami knocked out a nuclear power station in Japan in 2011, stunting demand and suppressing uranium prices. The IAEA’s Low Enriched-Uranium Fuel Bank has yet to be proved but in the meantime, Kazakhstan will enjoy the positive PR generated by it.

A video introducing the bank may be viewed here:

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Silk Road Development Weekly is compiled each week by Chris Devonshire-Ellis, Chairman of Dezan Shira & Associates. The firm has 28 offices throughout Eurasia and assists foreign investors into the region. For strategic advisory and business intelligence issues please contact the firm at silkroad@dezshira.com or visit www.dezshira.com