November 2014

1. Why is Russia interested in Australian
   uranium?
2. Why did Australia and Russia need a new nuclear
   cooperation agreement?
3. Does the Agreement comply with Australian nuclear
   safeguards requirements?
4. Will Australian uranium be covered by IAEA
   safeguards?
5. What conditions will apply to Australian uranium?
6. Has Russia concluded an IAEA Additional Protocol on strengthened safeguards?
7. Could Russia transfer Australian uranium to
   Iran?
8. Are military uses proscribed?
9. Would Australian uranium be used in Chernobyl-type (RBMK)
   reactors?
10. How can we be sure that Russia will not divert Australian
    uranium to weapons?
11. Does the IAEA inspect nuclear facilities in
    Russia?
12. What happens if Russia does not abide by the terms of the
    Agreement?
13. How can we be sure that Australian uranium would be
    properly secured in Russia?
14. What other countries have concluded nuclear agreements
    with Russia?
15. When will the new Agreement come into force?
16. When will we start selling uranium to Russia?
17. What types of nuclear cooperation are
    envisaged?
18. Won't supply of Australian uranium free-up
    Russia's own uranium for military use?
19. Why is there provision in the Agreement for the use of
    conversion and enrichment facilities outside of IAEA
    safeguards?
20. What is "direct substitution"?
21. Which facilities would use or process Australian
    uranium?
22. Glossary of terms

Why is Russia interested in Australian
uranium?

Russia is seeking secure, long-term sources of energy for
its planned major expansion over the coming decades of its
civil nuclear power industry. Currently it generates
around 60% of its electricity by fossil fuel. However,
Russia has plans to more than double its nuclear power
generating capacity by 2020. Diversifying energy sources by
using nuclear power will help Russia manage greenhouse gas
emissions and reduce pollution

Why did Australia and Russia need a new nuclear
cooperation agreement?

The existing Australia-Russia nuclear agreement, concluded in
1990, is more limited than Australia's other bilateral
nuclear agreements, in that it does not allow for use of Australian
uranium in Russian nuclear power plants. The existing 1990
agreement only allows for Australian uranium to be processed (e.g.
enriched) in Russia for third countries. Russia has plans for a
significant expansion of its civil nuclear power industry and as
such is seeking to expand its sources of uranium supply.

Does the Agreement comply with Australian nuclear
safeguards requirements?

Yes, the Agreement fully meets all Australia's safeguards
requirements. Under the terms of the Agreement nuclear
material transferred between Australia and Russia can be used
solely for peaceful, non-military purposes. Likewise, any
nuclear-related material, equipment or technology transferred
between Australia and Russia, and any nuclear material produced
using such material, equipment or technology, can be used solely
for peaceful, non-military purposes.

Will Australian uranium be covered by IAEA
safeguards?

Yes. Under the terms of the Agreement AONM (Australian
obligated nuclear material – Australian uranium and nuclear
material derived from its use) can only be stored, processed, or
used in facilities covered by Russia's safeguards agreement
with the IAEA.

What conditions will apply to Australian uranium? ^[1]

A key condition is that AONM be used, processed or stored only
within facilities which will be subject to Russia's
safeguards agreement with the IAEA. While Russia has the
right to choose which facilities are eligible for IAEA inspections,
under the terms of the Agreement Australia and Russia must jointly
determine which facilities will be eligible to use AONM. ASNO
(Australian Safeguards and Non-Proliferation Office) will
cross-check reports on AONM provided by Russia for consistency with
information from the IAEA and from other sources.

Further safeguards conditions required by the Agreement
include:

• there can
  be no retransfers to third countries, no enrichment to 20% or
  greater in the isotope uranium-235, and no reprocessing without
  Australia's prior consent;
• internationally agreed standards of physical security will be
  applied to all AONM during use, storage and transport; and
• detailed
  administrative arrangements, setting out procedures for accounting
  for and reporting on AONM, are to be established through a
  memorandum of understanding concluded between ASNO and its
  counterpart, the Russian Federal Atomic Energy Agency
  (Rosatom).

Has Russia concluded an IAEA Additional Protocol on strengthened safeguards?

Yes. The Additional Protocol entered into force in Russia on 16 October 2007.

Could Russia transfer Australian uranium to
Iran?

No. All of Australia's bilateral nuclear safeguards
agreements, including the existing (1990) agreement with Russia,
and this new Agreement, require Australia's consent before
AONM can be transferred to a third
country. Under longstanding Australian policy, consent is
given only for transfers to countries with which Australia has a
bilateral nuclear safeguards agreement. Australia does not
have such an agreement with Iran, so Iran cannot receive Australian
uranium.

Are military uses proscribed?

Yes. Under the terms of the new Agreement, nuclear
material, material, equipment, components and technology
transferred under the Agreement cannot be used for any military
purpose or in any way to further any military purpose.

Would Australian uranium be used in Chernobyl-type (RBMK)
reactors?

No. Russia is not seeking to import Australian uranium to
fuelRBMK reactors as these reactors use recycled uranium recovered
from reprocessing of Russia's large stockpiles of spent fuel.
Light water reactors in Russia already outnumber RBMK reactors, and Russia's plans to expand its
nuclear power program are based on light water reactors.

How can we be sure that Russia will not divert Australian
uranium to weapons?

Russia announced in 1994 that it had ceased production of fissile material for weapons. It has made substantial cuts in its nuclear weapons arsenal since the Cold War, with further reductions agreed with the United States in the 2002 Moscow Treaty, and the 2010 New START Treaty (not yet in force). Further, Russia has pursued an extensive program of down-blending weapons-grade uranium (equivalent to thousands of warheads) for use in civil nuclear power plants – for several years Russia has been a major supplier to the international uranium market through this down-blending program.

In concluding this Agreement, Russia has undertaken a
treaty-level commitment to use AONM solely for peaceful purposes
and in facilities covered by its safeguards agreement with the
IAEA. Russia will also provide detailed nuclear accounting
information to ASNO.

Does the IAEA inspect nuclear facilities in
Russia?

Russia has limited experience with IAEA inspections of its nuclear facilities as, until recently, it had not sought to source uranium from countries (such as Australia) that require supplied nuclear material be used in facilities subject to IAEA safeguards. However, Russia has completed a major reform of its nuclear industry to clearly separate its civil and military sectors, and to place civil facilities under its IAEA safeguards agreement. Given the requirement that AONM can only be used in facilities subject to IAEA safeguards, once supply begins it is likely that the number of facilities eligible for IAEA inspections in Russia will increase beyond those already designated.

What happens if Russia does not abide by the terms of the
Agreement?

Either party has the right to suspend or cancel transfers of
nuclear material should there be non-compliance with provisions of
the Agreement or with IAEA safeguards arrangements.

How can we be sure that Australian uranium would be
properly secured in Russia?

Russia has committed itself, in the new Agreement, to meet the requirements of the Convention on the Physical Protection of Nuclear Material (CPPNM) and the security guidelines set out by the IAEA. On 19 September 2008 Russia became the eighteenth country (Australia was the seventeenth) to ratify the Amended CPPNM.

What other countries have concluded nuclear agreements
with Russia?

Russia has concluded nuclear cooperation agreements with several countries, including Canada, the United Kingdom, the United States, and Japan.

When will the new Agreement come into force?

The Agreement entered into force on 11 November 2010 through an exchange of notes witnessed by Prime Minister Julia Gillard and President Medvedev in Seoul.

When will we start selling uranium to Russia?

Following Russia's intervention in Ukraine and purported annexation of Crimea, Australia introduced autonomous sanctions and travel bans against designated persons and entities in relation to Russia. On 3 September 2014, Prime Minister Abbott announced the suspension of Australian uranium sales to Russia until further notice.

More information on Australia's sanctions

What types of nuclear cooperation are
envisaged?

As with most of Australia's bilateral nuclear agreements,
the new Australia-Russia Nuclear Cooperation Agreement provides for
a broad range of cooperation in many nuclear-related areas. While
no specific proposals are presently being considered, an example of
existing cooperation between Australia and Russia is Russia's
supply of a major piece of scientific equipment for the OPAL
research reactor, the cold neutron source.

Won't supply of Australian uranium free-up
Russia's own uranium for military use?

No. Uranium is not a scarce commodity in Russia, Russia has the world's sixth largest reserves of uranium. Russia has a significant surplus of weapons-grade uranium and has a long-standing program of down-blending weapons-grade uranium (equivalent to thousands of warheads) for use in civilian nuclear power plants. This program is currently a major source of uranium on the international market. Further, Russia announced in 1994 that it had ceased production of fissile material (plutonium and high enriched uranium) for nuclear weapons.

Why is there provision in the Agreement for the use of
conversion and enrichment facilities outside of IAEA
safeguards?

Under the previous (1990) agreement there was no requirement for IAEA safeguards to apply to any facility (e.g. conversion or enrichment facilities) processing Australian uranium, provided the processed product was transferred out of Russia "expeditiously" and any remaining processing tails or waste was placed under safeguards arrangements. The new Agreement strengthens considerably safeguards provisions contained in the previous agreement by providing for a direct substitution approach (see following question for more details) similar to that contained in the Australia-China Nuclear Transfer Agreement.

In the case of conversion facilities, such facilities are
considered to be before the "starting point" for IAEA
safeguards procedures as set out in the IAEA's safeguards
agreements with nuclear-weapon states.

In the case of enrichment facilities, there is a unique circumstance that applies to Russia related to longstanding contracts. Russia wished to retain in the new Agreement its right to re-enrich Australian obligated depleted uranium tails on behalf of third countries in facilities outside of safeguards, due to longstanding contracts with European enrichment companies that hold this material. Russia cannot re-enrich depleted uranium tails at its showcase international nuclear fuel cycle centre at Angarsk (which is under IAEA safeguards) due to the presence of undesirable uranium isotopes in depleted uranium that would complicate the operation of this facility. However, Russia proposes that Australian uranium for use in Russian nuclear power plants would be enriched at the international fuel cycle centre at Angarsk, which is under IAEA safeguards.

What is "direct substitution"?

A fundamental reality of accounting for obligated nuclear
material worldwide is that individual atoms cannot be tracked
– i.e. one uranium atom is indistinguishable from
another. Therefore, uranium exporters ensure exports do not
contribute to military applications by applying safeguards
obligations to the overall quantityof exported material. This
practice of tracking quantities rather than atoms has led to the
establishment of universal conventions for the industry, known as
the principles of equivalence and proportionality^[2]. These principles have been
applied internationally for some 30 years.

Under the new Agreement, in the case of conversion or enrichment
facilities outside of IAEA safeguards, a direct substitution
approach would be used. Under this approach, on receipt of
AONM at such a facility, by applying the principle of equivalence
an equivalent quantity of processed uranium and processed tails or
waste will be added to the inventory of a facility (or facilities)
designated for safeguards. This will have exactly the same
effect as if the AONM had moved through the conversion or
enrichment facility in question, and will ensure that AONM remains
in a facility eligible for safeguards at all times.

Which facilities would use or process Australian
uranium?

Under the new Agreement all facilities eligible to use AONM must be mutually determined between ASNO and Rosatom. The first such list would need to be concluded before any transfer of Australian uranium to Russia under the new Agreement.

Glossary of Terms