Memorandum, Ambassador Paulo Nogueira Batista, Information for the President of Brazil, 'Enrichment of Uranium'

SECRET                                                                                                                     

April 19, 1971

INFORMATION FOR THE MINISTER OF STATE

Uranium enrichment

      Starting in 1980 , the present capacity of the United States to enrich uranium (by gaseous diffusion) will no longer be sufficient to supply the demand of the nuclear reactors being installed in that country and in Western Europe and Japan. Consequently, there are already studies in the United States for the construction of new plants for isotopic uranium separation.

2.  For economic and political reasons, the Western European countries wish, however, to acquire autonomous enrichment capacity. For this end, the Federal Republic of Germany , the Netherlands and England decided to join efforts for the development of a new uranium enrichment technology, using ultracentrifuges, a process economically better suited to the European peculiarities  because of the low relative consumption of electric energy (the cost of which is higher in Europe that in the United States) and the possibility of construction of smaller plants.

3.     The participation of the Federal Republic of Germany in the tripartite project is also due to the fact that the FRG cannot produce enriched uranium in its territory, according to the Paris Agreements of 1954. Through the tripartite project, the Federal Republic of Germany will produce the ultracentrifuges to be installed in the Netherlands’ plant.

4.     After the decision taken at the end of last year to abandon the line of natural uranium reactors and adopt enriched uranium, France – which has not carried out research in the ultracentrifuge sector, is trying to interest Italy and other European countries in the construction, in French territory, of an isotopic separation plant for gaseous diffusion, a technology that France developed in small scale, on its own, for military purposes.

5.      For countries like Brazil, the situation is as follows: (a) the enriched uranium market should top the billion dollar mark during the next decade, drawing close to the petroleum market; (b) the countries that decide now to aquire an autonomous enrichment capacity will have, nevertheless, a privileged competitive position as well as participate in a virtual oligopoly, with obvious political implications.

6.      Brazil, whose need for enriched uranium will be relatively modest in 1980, would find itself facing four options: (1) to be an importer of enriched uranium, at the then prevailing prices and conditions; (2) to try, then, to import enrichment equipment for its own supply; (3) to try, starting now, to build in Brazil a plant to supply the world market, in association with another country possessing technology already industrialized (gasesous diffusion); (4) to try, starting now, to asociate itself with the development of a technology not yet industrially tested (ultracentrifuges of the “nozzle process”)  also for supplying the world market.

7.     The most attractive lines of action are (3) and (4). In the case of (3) – construction in Brazil of a gaseous diffusion plant – the most likely partner would be France. Our trump card would be the offer – in the medium San Francisco river – of abundant electric energy at a price much below the European and even the North-American rates. Our share of capital could be the construction of a hydroelectric plant for this purpose. The greatest drawback would be the large initial size that a gaseous diffusion plant must have, which can be unfavorable as much from the point of view of the initial investment as from that of the offer/demand of enriched uranium.

8.          Association with the development of a not yet industrialized technology would lead us to the Federal Republic of Germany as a natural partner. While the centrifuge process consumes little energy, we might even then be attractive to the FRG if we join together the offer of low energy cost with the eventual guarantee of supply of natural uranium. By virtue of the tripartite agreement, however, it is quite likely that the Federal Republic of Germany is not able to grant access to the ultra-centrifuce technology in order to enable us to manufacture those machines. Perhaps they can only supply already made centrifuges for the production in Brazil of enriched uranium.

9.            There would also be the possibility of considering a Brazilian-German association for the full development of a third method os isotopic separation – the “nozzle process.” Due to its high electric energy consumption, even higher than that of gaseous diffusion, this process has not attracted much interest in the Federal Republic of Germany and in Europe, where it would not be competitive. It would however be certainly competitive in Brazil, at the price that [electricity] can be obtained from the San Francisco river. If it is industrially proven, the “nozzle” method would have over gaseous diffusion the advantage of not requiring very large plants.  On this count it its similar to the centrifuges.

10.        The idea would be to demonstrate to the Minister of External Relations of the Federal Republic of Germany, on the occasion of his forthcoming visit to Brazil, that the Brazilian Government is interested in joining the uranium enrichment race and that we would like to consider the possibilities og German-Brazilian cooperation  in this field. Since the Federal Republic of Germany is a signatory of the Treaty on the Non-Proliferation of Nuclear Weapons, it is convenient to assuage Minister Seheel right away by stating our willingness to apply IAEA safeguards to any joint undertaking. The participation of the Federal Republic of Germany in the tripartite Anglo-German-Dutch project will make more difficult, on the other hand, a German-Brazilian intergovernmental agreement. Any solution will have to be prepared on the basis of understandings with German private firms, to which the Bonn Government would give the necessary “green light.” This kind of understanding will also be easier not only because of the political-legal restrictions that exist over the FRG in the nuclear field but also of the problems of “image” that Brazil is facing abroad at present.

11.    The importance of Brazil to engage itself in the uranium enrichment race is transcendental. Besides its high economic value, such a decision would put Brazil in the forefront of modern technology, a step more significant, perhaps, that the production of steel for the Brazilian industrial process.

Respectfully,

(Signed) Paulo Nogueira Batista            

  Minister, First Class