173 Memorandum from Sadleir¹ to Acting Secretary, Department of Foreign Affairs

Washington, 6 July 1971

Secret

Visit of Mr Swartz: Uranium Enrichment

Enclosed, for your information, are copies of records of discussions between the Minister for National Development, Mr Swartz, and-

1. members of the Joint Congressional Committee on Atomic Energy; and
2. the United States Atomic Energy Commission.

Both discussions took place in Washington on 25 June during Mr Swartz's official visit here from 24 to 27 June. As you will see the discussions were centred mainly on the conditions and circumstances under which the United States might share its uranium enrichment technology with other countries, including Australia.

2. The records were prepared by the Atomic Energy Attaché of this Embassy, Mr Crooks,² who has sent copies direct to the Australian Atomic Energy Commission and to the Department of National Development.

Meeting Between

The Minister outlined to the Members the reasons for his visit, the main one being to explore the general climate of views of the U.S., Canada and Japan to the long term future of nuclear fuel and in particular the question of whether Australia should sell its new found discoveries of uranium as UO2⁸ or UF6,⁹ and further whether the developing situation would justify the eventual construction of an enrichment capability in Australia. The general question of world energy supplies was briefly discussed and it was mutually agreed that nuclear power holds the key to future world demand and even more so now, Congressman Hosmer noted, because nuclear power is the only way we can provide electricity and simultaneously preserve the environment.

The Minister then referred to the question of the possibility of constructing an enrichment plant in Australia, and asked the Congressman what they felt about this latter question. Would the U.S. be willing to cooperate in such a venture? In reply Hosmer then gave a résumé of the need for increased enrichment capacity over the next 20 years, and said that by about 1980 existing U.S. capacity would be exhausted. In addition, there is a need for countries like Japan to have alternative sources for strategic fuel supplies and therefore there is a realisation now in the U.S. for the need for enrichment plants off-shore from this country.

The U.S. had recently taken two major steps towards technology sharing with friendly countries. The first was the decision of the Administration to invite private U.S. industrial groups to share USAEC know-how in both diffusions and centrifuge technology, and secondly the decision to go ahead with the Cascade Improvement Program for the existing plants. The first of these will enable U.S. industry to decide whether or not it wants to be involved in enrichment, and which is the best system.

Hosmer then said that in view of these concessions, a decision for technology sharing in diffusion technology with friendly foreign powers is only about *three weeks away. Any deal the U.S. makes would probably involve some royalties arrangements to recompense the U.S. for the vast amounts of money already invested and also, for a plant being built on a very cheap power location, the option for the U.S. to construct for its own use enrichment plants on the same site. The reason for this is the high sensitivity of large diffusion plants to power costs and therefore the need for the U.S. to be given equal access opportunities, if it is going to compete on the world market.

He reiterated that the U.S. is not enamoured with the centrifuge method because of its easy use for the diversion of materials for weapons manufacture. The Minister asked if Australia would have to ratify the Non-Proliferation Treaty before being given access to enrichment technology. In reply the Joint Committee said they would not like to answer this as it was purely a political question and should be considered by the State Department and the AEC, not the Joint Committee.

Mr. Bott asked if barrier technology would be available and Hosmer said 'No'. This would be a 'black box' arrangement whereby the secrecy of the barrier technology would be protected but the rest of the plant design, etc., would be made available. Mr. Bott again asked 'Is Japan acceptable as a partner in a multi-national venture?', and the Joint Committee replied in the affirmative. Mr. Bott said Australia could probably provide power at 4 mils for a large plant on our coal fields and this is a very competitive price for such an installation. He asked if the true economics were completely known and the reply was that, with increasing labour and other costs, it is difficult to say, but rapidly improving technology would protect the market and maintain reasonable costs. Mr. Bott asked if Australia and Canada would be viewed as the best sites and the reply was that these locations would be favourable politically and technically but that others would also be considered, although power costs in Europe would weigh heavily against an installation there.

In summing up, the Minister thanked the Joint Committee Members for their time and said that he was pleased to receive such a favourable response to these preliminary queries, repeating again that Australia is not making any proposals at this stage, but merely exploring the developing situation to try to establish what her course of action should be.

Peter V. Crooks

*Note: After the meeting, Mr. Bauser told the Australian group that Mr. Hosmer's prediction of three weeks before an announcement concerning technology sharing with foreign powers was extremely optimistic. Bauser said a decision certainly is not far off, but three months would be a better estimate than three weeks.

Meeting Between

The Minister in his introductory remarks outlined the purpose of his mission, which was essentially to undertake exploratory discussions on the current world situation in nuclear energy and with particular reference to Australia's recent major uranium discoveries. There is definitely no intention at this point to make any firm proposals on such things as enrichment plants, etc. The Minister then gave some details on the extent of the proven uranium reserves in Australia and indications for further discoveries which experts feel are likely.

The Minister then described the importance of these discoveries to Australia in the context of developing world energy demands, and the need for us to examine closely whether or not we should export ore in its natural form or take steps to enable us to have the capacity to move higher up the technological ladder in fuel processing, in particular the question of whether or not we should consider building an enrichment plant in Australia. It was pointed out that a decision on Jervis Bay had been delayed twelve months but in any case the use of nuclear power in Australia would make only a minor impact on our large fuel reserves, and we therefore have a pressing interest in developing our export potential. For these reasons we are seeking the guidance and views of the major nuclear countries in order to determine our course of action.

In reply the Chairman of the USAEC, Dr. Seaborg, referred to the President's recent Energy Message¹⁴ with its emphasis on nuclear power, and said that the sharing of technology with selected countries in diffusion plant design and construction should be decided in the fairly near future. Discussions on this subject were currently taking place in Congress following favourable recommendations by the Administration and the USAEC. Dr. Seaborg said he welcomed Australian interest in this field.

Commissioner Johnson said that enrichment plants, particularly diffusion plants, are very sensitive to power costs and it is necessary to select a site which would give cheap power with the minimum possibility of significant increases in power costs. Mr. Bott said that Australia's massive coal reserves make us a cheap power country suitable for the installation of large diffusion plants, and that total costs should be stable and low for a long time, perhaps 20 years, since we have mainly surface coal, the recovery of which is not sensitive to labour costs. In fact, we should be able to produce power at below 4 mils at the right location. Mr. Bott then went on to point out that our decision on whether to participate in an enrichment project will have to be taken before centrifuge technology is proven, since world power demands will require a decision within the next four years.

Commissioner Johnson pointed out that although world energy demand is growing at the rate of about 9% a year, the demand for nuclear power is growing much faster than this, with the result that the nuclear power industry will have to double its supplying capability every five years, and this will be a very difficult demand to meet.

The Minister then asked for an outline of the fast breeder development situation, and Dr. Seaborg said that the breeder reactor would have to come to solve the world long-term energy requirements, and that all the leading nuclear countries were going along the same path, viz., the sodium cooled fast breeder system. In the U.S. breeders should be on stream by the middle 1980s but Commissioner Johnson pointed out that there will be a big need for light water reactors and enrichment capability well into the 21st century because of the need to produce plutonium to fuel the big breeder reactors. Even in the year 2000, 50% of power will be nuclear, and light water reactors will have the major portion of this. The Minister asked how long would we need to supply uranium, and Dr. Seaborg replied for about the next 40 years, provided fast breeders come on stream as they are expected to.

The Minister then repeated the point that we must assess the need for an enrichment plant in Australia, and asked again whether or not the U.S. are favourably inclined to this development. Dr. Seaborg replied 'Yes. The U.S. is very interested and see the need as a vital one'. Currently the U.S. are looking at two main areas, viz., Europe and the Pacific Basin, as suitable venues, and in his opinion talks would commence fairly soon with interested countries. The U.S. sees the project as being multi-national and when the time comes would invite the interest of certain selected countries.

Mr. Zook of State Department then asked the Minister, 'To what extent are the Japanese and Canadians interested in a multi-national deal?', and the Minister replied that so far we have had tentative expressions of interest from the Japanese, as well as firm indications from the Canadians of their interest.

Mr. Bott asked if it is possible to give a true cost for a diffusion plant, and Mr. Quinn¹⁵ replied that for a plant of 5,000 tonnes SWUs or bigger you can count on $100 per KW but we can obtain estimates which are publicly available. Mr. Bott asked the size of a typical operating staff and Quinn replied currently about 1,100 people for a large plant, but this could be much less with more fully automated installations.

Commissioner Johnson then raised the matter of the Non-Proliferation Treaty and asked if this is likely to be ratified by Australia and the Minister replied that we are still considering the question of ratification. The Minister said we would reconsider our position in September and then asked Johnson if the U.S. considers that we would have to ratify as a condition for the sharing of enrichment technology. Johnson said he could not give a definitive answer on this, but it was certain that it would make things much easier politically if Australia ratified.

Mr. Bott then asked about the situation on fusion and Seaborg said fusion is the ultimate energy source but tremendous problems remain to be solved and it will be unlikely to have a working reactor before early next century. We must put our trust in the fast breeder system and look forward to a mix of thermal and fast reactors as the main trend in energy development for the next 40 years, followed by a fully fast breeder regime from then on. If fusion works, both energy sources would be used for the foreseeable future.

Mr. Bott then asked what the Commission thought of the centrifuge method for separation of isotopes. Dr. Seaborg said it is much too early yet for the U.S., or anyone, to make an estimate on the commercial and technical viability of the system but, on the other hand, that the U.S. knows its gaseous diffusion performs to a high degree of precision. Mr. Johnson then said the main unknowns in the centrifuge system are the true cost of mass produced spinners and also the reliability of the units, and it would be some time before definitive answers could be supplied.

Dr. Seaborg then repeated his pleasure at having an opportunity to hear the Minister's views and to be aware of Australia's growing interest in this field. The Minister in turn thanked Dr. Seaborg and the Commission for giving him the opportunity to put his views to them.

Peter V. Crooks

[NAA: A1838, 720/4/9 part 2]

• 1 David Sadleir, Counsellor, Australian Embassy, Washington.
• 2 Peter V. Crooks, AAEC Attaché, Australian Embassy, Washington.
• 3 Chester Craig Hosmer was subsequently President of the American Nuclear Energy Council, 1975–79.
• 4 Lloyd Bott, Secretary, Department of National Development.
• 5 Robert Dale (Bob) Price.
• 6 Senator Wallace F. Bennett.
• 7 Edward J. Bauser, Executive Director, Joint Congressional Committee on Atomic Energy.
• 8 Uranium dioxide.
• 9 Uranium hexafluoride.
• 10 Glenn T. Seaborg, Chairman, US Atomic Energy Commission.
• 11 Clarence E. Larson, Commissioner, US Atomic Energy Commission.
• 12 Lyall Erskine Johnson, Commissioner, US Atomic Energy Commission.
• 13 James T. Ramey, Commissioner, US Atomic Energy Commission.
• 14 On 4 June 1971, President Nixon had delivered a special message on energy resources to Congress.
• 15 Perhaps Joseph Richard Quinn.