Memorandum DEM/132 by Luiz Augusto de Castro Neves, Deputy Chief of Energy and Mineral Resources, for the Head of the Department of Economy, 'Possible Brazil-Argentina Nuclear Cooperation'

Memorandum for the Chief of the Economic Department

December 10th 1979

Classified

DEM/132

Possible Brazil-Argentina nuclear cooperation.

1. I have received a call from the Argentine Embassy in Brasília informing that Vice-Admiral Carlos Castro Madero, president of the National Atomic Energy Commission in that country shall arrive at Rio de Janeiro on Thursday December 20th, on Varig flight 743, estimated time of arrival at 7 AM. Admiral Castro Madero is returning from New Delhi, where he will be leading the Argentine delegation at the 23rd Regular Session of IAEA General Conference. He will remain in Rio de Janeiro for 3 days and will return to Buenos Aires on Sunday morning, December 23rd.

2. The purpose of the President of CNEA’s visit is to maintain informal contact with CNEN and NUCLEABRÁS officials, so they can examine the possibilities of nuclear cooperation between Brazil and Argentina, as well as try to identify areas of interest for such cooperation.

3. The nuclear cooperation between Brazil and Argentina has already been the subject of Memorandums DEM/86 and DEM/89, whose copies are attached hereto. I do not think it is necessary to detail the potentials brought by the cooperation between the two countries for the peaceful use of nuclear energy. Both countries are regional leaders on developments in that field of study and also have Latin America’s largest known uranium and thorium reserves. From the political standpoint, a possible collaboration between Brazil and Argentina can create favorable impacts, whose effects will not be limited to bilateral relations. In this sense, the following aspects are worth highlighting:

a) in recent years, the USA has intensively pressured both countries with the purpose of forcing them to waive some aspects of their national programs for nuclear development and to accept additional and discriminatory safeguards, by alleging that nuclear development in both countries could set a nuclear arms race;

b) the abovementioned argument was also used to pressure the FRG, whose agreement with Brazil could disrupt the “regional balance” of nuclear affairs – there were frequent implicit references to this fact at the International Atomic Energy Agency meetings.

4. There was the underlying Argentine-Brazilian dispute over the use of Paraná River – which has been satisfactory solved by now. Under those conditions, the nuclear cooperation between Brazil and Argentina will serve the purpose of disarticulating pressures based on the abovementioned arguments. The fact that FRG is associated to Argentina through KWU to supply Atucha II Nuclear Power Plant is worth mentioning, so Brazil and Argentina then have FDG as a mutual nuclear partner. The importance of such fact arises from the possibility that some nuclear equipment to be supplied by KWU to Argentina may come from Brazilian companies that are part of joint ventures between KWU and NUCLEBRAS, for instance, NUCLEP AND NUCLEN.

5. On the other hand, Argentinian Embassy Counselor Raul Estrada informed me he had just been to Buenos Aires, where he was in touch with CNEA to explore possible areas of nuclear cooperation between the  two  countries.  He  has  also  reported  some  preliminary  ideas  on  this  matter,  heard  at  CNEA.  I summarized what Estrada told me in a document describing possible areas of cooperation on peaceful uses of nuclear energy between Brazil and Argentina. This document – hereunder – brings up three basic areas of cooperation, which are:

a) Research and staff training;

b) technical and industrial cooperation;

c)information exchange.

6. Item (a) makes reference to the fundamental research and development of projects, as well as education and training of relevant human resources to nuclear studies in both countries. In research, some previous proposals by CNEA could be implemented by negotiating covenants with Brazilian universities and research institutions. Such proposals would allow the development of joint research between the Brazilian Federal University of Rio Grande do Sul, the Physics Institute of São Carlos, and Argentinian CNEA. There was a preliminary agreement between the stakeholders – there was never, however, a manifestation by the Brazilian Government, which is an unconditional prerequisite to implement the agreements reached at technical level. The Brazilian position was based on the premise that there should not be any nuclear cooperation with Argentina while the dispute over Itaipú was not over.

7. On that matter, there was also the possibility of jointly developing some projects. CNEA has already indicated to the Argentinian Embassy that the Thorium fuel cycle and nuclear fission might be objects of cooperation between the countries. Brazil is interested in both topics. For instance, we are developing researches with the purpose of using mixed cycles of thorium and uranium in PWRs, as well as maintaining a covenant with the FRG to develop high-temperature reactors (which use thorium as fissile material). FRG has already manifested interest in expanding activities in that area in collaboration with other countries (I have already discussed the topic of thorium fuel cycle on Memorandum DPB/32, in 1978). By the way, Brazil and Argentina have considerable thorium deposits. Regarding nuclear fission, it is highly likely to be the most advanced use of nuclear energy for peaceful purposes. Brazil is highly interested in this matter and is currently building (in São Paulo) a tokamak, a kind of experimental fusion reactor.

8. The possibility of technical and industrial cooperation between the two countries on nuclear affairs would certainly have the largest short and medium-term repercussions. This area contemplates bilateral cooperation with the purpose of allowing a more efficient implementation of Brazilian and Argentinian nuclear programs. For instance, CNEA may be interested in cooperating with NUCLEBRAS on uranium prospection, mining and processing. Moreover, interesting possibilities for industrial cooperation arise from the use of nominal capacity in both countries’ nuclear industries for mutual supply of equipment. For example, Argentina could supply Brazil with zirconium tubes (which has fuel elements to reactors), until we are able to produce them here. The counterpart would possibly be NUCLEP manufacturing equipment for Atucha II Nuclear Power Plant. As known, KWU and NUCLEP will supply Atucha II with KWU-certified equipment, under the form of a joint venture formed by NUCLEBRAS, KWU and others. It is also known that some delays in the implementation of the Brazilian nuclear program will inevitably create some idle capacity at [N]UCLEP, which could be used to produce equipment for the Argentinian nuclear program. In this sense, it would be especially important if NUCLEP could manufacture the pressure vessel for Atucha II’s reactor, whose dimensions are so big (since natural uranium is the fissile material used in Argentina) that it would be hard and expensive to transport it from Europe.

9. The technical and industrial areas of cooperation should be subjected to careful examination, with the purpose of identifying all possibilities of bilateral cooperation that serve the purpose of a faster and more efficient implementation of the Brazilian and Argentinian nuclear programs. The fact that both countries aim at having access to the complete nuclear fuel cycle is worth highlighting. Thus, the cooperation between the two countries – which are in similar stages of nuclear development at global level, but indifferent sectors – may speed the achievement of the aforementioned goal, before the reduction of some external vulnerabilities.

10. The exchange of information is highly important if we take into consideration the nuclear policy and non-proliferation data that interests both countries. Brazil and Argentina have consistently held virtually identical opinions both in several international forums and in their bilateral relations. In this context, both countries are under international pressure for the same reason, which is preventing Brazil and Argentina from reaching complete nuclear autonomy. Thus, a mechanism to exchange information on the international nuclear scenario would be particularly important as a subsidy to prepare both countries’ positions and actions in the appropriate forums. By the way, I remind Your Excellency that both countries have maintained informal contact regarding new safeguards requirements that were separately presented to both governments by the American administration. Such contact has been authorized by Mr. Minister of State, in the Memorandum DEM/78, from 07.19.1979.

11. Taking the trip Mr. President may go on to Buenos Aires next March into consideration, I believe its is desirable to have the possibility of an agreement on nuclear cooperation as basic premise. Under such conditions, there is a little more than two months to negotiate such agreement. I also understand that the visit by Castro Madero (who is the highest authority in Argentina on nuclear affairs, directly subordinated to the President), regardless of its informality, may serve to define the general guidelines for that cooperation, as well as the procedures for bilateral negotiations. The next step may be sending a mission to Buenos Aires, possibly in late January, or early February, with the purpose of negotiating the bases for nuclear cooperation between Argentina and Brazil. Such bases may also be included in the Protocol, which could also define priority implementation areas, as well as a description of association models between institutions from both countries. The following step would be both governments’ approving the Protocol and will consist of negotiating the cooperation agreement on peaceful uses of nuclear energy.

12. This document may and should be a “framework agreement”, with simple text and few clauses. The areas of cooperation would then be implemented through specific convents and adjustments. It would be highly desirable if some of these specific cooperation instruments were signed together with the main agreement. This perspective would offer more initial content to the Brazil-Argentina nuclear cooperation, which is fundamental in my point of view, not only because of the potentialities, but also of the context arisen from nuclear cooperation agreements we have recently executed with other developing countries.

13. In regard to the global theme of nuclear cooperation between Brazil and Argentina, I take this opportunity to register that Dr. Manfred Hagen, Scientific Counsel of FRG Embassy in Brasilia came to see me a few days ago. Dr. Hagen revealed that his Government would be interested in and satisfied with the perspective of nuclear cooperation between both countries.

14. In respect to the visit by Admiral Castro Madero, I believe a previous coordination between Itamaraty, the Secretary-General of the National Security Council, the Ministry of Mines and Energy, CNEN and NUCLEBRAS to be essential. Due to the visit’s initial and informal characteristics, I think Castro Madero’s trip to Brasilia is dispensable. However, it would be particularly useful if an Itamaraty official could accompany him during his meetings in Rio de Janeiro.

15. I humbly suggest that a copy of this Memorandum is forwarded to Mr. Chief of the Department for the Americas.

Yours faithfully, [signature]

(Luiz Augusto de Castro Neves)

Deputy Chief of the Energy and Mineral Resources Division.

In addition to what I have just said,

1. The Argentinian Embassy in Buenos Aires has just called me to inform  it  has  been  notified  that  Castro Madero has not been able to confirm its plane tickets reservations as expected and he suggested the conversations to happen in early February in Buenos Aires. It was also said that due to the recent promotion of Castro Madero to Vice-Admiral, it was probable that he was needed in Buenos Aires earlier than expected and he would probably be on holidays in January. As requested to me, I immediately informed Ambassador Paulo Nogueira Batista of such facts, who, by the way, confirmed that NUCLEBRAS may supply equipment to Atucha II Nuclear Power Plant. The President of NUCLEBRAS told me that he would eventually contact you Mr. Minister of State regarding this issue.
2. Having Castro Madero’s visit been called off, there is virtually no available time to negotiate an agreement to be signed during Mr. President’s trip to Buenos Aires. However, due to its importance, I believe we should get a definition from Argentine officials that would allow us to evaluate the real possibilities of concluding a nuclear cooperation agreement with that country before mid-March.

Yours faithfully,
[signature]

(Luiz Augusto de Castro Neves)

Deputy Chief of the Energy and Mineral Resources Division.

[Handwritten below:]

To Mr. Secretary-General,

The previous government had already entertained the idea of an eventual Brazilian-Argentine cooperation on nuclear affairs. Some favored (CSN, for instance) extended collaboration to some Latin American countries, including Argentina, as we already have excellent relations with the IAEA. Castro Madero’s recent statements equally attest the Argentinian interest in cooperating with Brazil, the Presidents of CNEA is even cogitating a trip to Brazil.

2. I see closer relations with Argentina on such matter to be useful to Brazil, taking into consideration the arguments presented hereunder.

3. Governmental-level conversations – meaning Itamaraty participation - with the purpose of organizing a visit to Brazil would be convenient, and in this context, avoiding direct understandings between CNEA and CNEN or NUCLEBRAS. Such approach means that the bodies directly connected to the nuclear policy would handle the discussions, at least from our side. If there is confirmation of the Argentine interest, I also believe we should organize a “governmental mission”, as it has been done to other countries (Venezuela, Iraq), instead of a mere visit by a Brazilian official.

4. Such attitude makes possible and convenient for officials to discuss issues on several possible areas of bilateral collaboration.

5. I would much appreciate Your Excellency’s guidance on the matter, since the Argentine Embassy has contacted us on the matter.

Yours sincerely,

December 14th 1979 [signature]

Memorandum DEM/132/SECRET – Dec 10th, 1979

To the Minister of State

The current moment seems convenient to me for Brazil and Argentina to explore the possibilities of nuclear cooperation between the two countries. The matter is unmistakably promising and highly important from the political standpoint. Thus, I believe Itamaraty shall participate in all contacts with the Argentines.

2. On the content of an eventual cooperation, I believe Inter-ministerial group, composed by Foreign Affairs, Energy, Secretary-General for the National Security Council, should discuss the matter.

Yours Sincerely,
[signature]

[Handwritten:]

To Mr. Secretary-General,

As authorized by Mr. President, we shall invite Castro Madero on behalf of the Brazilian government. Cesar Carlos to host. Itamaraty is following-up, in special with entities of [illegible].

[signature]
12/26/1979

[Handwritten:]

To Mr. Chief of DEC,

Yours Sincerely,

[signature]

12/20/1979

[Handwritten:]

To Mr. Chief of DCM,

Please give attention.

Yours sincerely,

January 2nd 1980

[signature]