Report from the President of Nuclebrás Paulo Nogueira Batista to Foreign Minister Saraiva Guerreiro, 'Trip to Buenos Aires'

Report sent to the Minister of Foreign Affairs Subject: Trip to Buenos Aires

03.23.80

Secret

Report Sent by the President of Nuclebrás to Minister Saraiva Guerreiro March 23rd, 1980

2. Yesterday, on Saturday the 22nd, the agenda of contacts with Argentine officials on nuclear affairs ended with a visit to Atucha I Nuclear Power Plant. We had the opportunity of getting to know the country’s main nuclear facilities, from the mineral treatment plants to industrial units under construction, such as the pilot reprocessing plant.

3. During all conversations, at all levels, there was great cordiality and frankness, a sign of Argentinian interest in getting acquainted to Brazil on nuclear affairs;

4. Local media covered the visit with great and positive visibility, in special at the mission’s arrival, focusing the news on the perspectives of an agreement to be signed during the Presidential visit next May. On the press conference at the airport, Professor Hervásio de Carvalho and I answered questions on such topic, according to the instruction received on the technical and preliminary aspect of our mission. However, no editorial comment was registered.

5. CNEA has only publicized the visits to its own facilities, and it has not mentioned the visit we have paid to Pescarmona Industries in Mendoza, which was only commented by local news.

6. On Friday the 21st, there was a meeting with Chancellor Pastor on Admiral Castro Madero’s initiative, which was not scheduled by CNEA, to which I, Ambassador Carlos Duarte and President of CNEN Hervásio de Carvalho were present. During the meeting – which was not covered by the press – Admiral Castro Madero started by informing the schedule for the Brazilian mission, and concluded with a sentence that led us to understand that all discussions at technical level were virtually over, and that it was the Foreign Ministries’ duty to start such conversations with the purpose of executing an Agreement at political_ diplomatic level. Chancellor Pastor was next and highlighted the great importance he personally gave to an Agreement between Brazil and Argentina on nuclear affairs, which suited a larger picture of proximity between the two countries. Although the execution of an Agreement during the visit by the Brazilian President was not assured, he made his personal observations regarding such presidential visit. Pastor declared to consider the Brazilian-Argentinian agreement a fundamental issue within a strategy for more political and economic stability in the region, as both countries would be in even better conditions to collaborate with its neighbors.

7. The day before the meeting with Chancellor Pastor, Professor Hervásio de Carvalho had informed me and Ambassador Duarte about the disappointment expressed by Admiral Castro Madero regarding Brazil’s reluctance in discussing an Agreement. During the meeting with Chancellor Pastor, Professor Hervásio de Carvalho cited the execution of an Agreement, in response to such worries.

Within the instructions received, I said that the impressions I had on the development of the Argentinian nuclear program pointed to concrete possibilities of cooperation, which allowed us to move on from meaningless declarations of the countries’ maturity level.

8. During all the events, Castro Madero avoided opportunities to deepen contacts, making the final working meeting on Friday at 5 pm – followed by a press conference at 6:30 PM – a simple review of the list with possible cooperation areas that he had already left us during his visit to Brazil.

9. In this working meeting – basically the only one – the first conversation was limited to more details on the schedule – Castro Madero, generally highlighted the exchange of information on contracts, staff training, radiological protection and basic research. Professor Hervásio de Carvalho showed interest in putting CNEN and CNEA in contact regarding radiological protection and scientific research, in which he emphasized the nuclear fission.

10. From the list given by Castro Madero in Rio de Janeiro – by the way, with highly heterogeneous topics and characterized by the abyss between form and depth – I tried to demonstrate how convenient it would be to first select those areas to which give more attention and therefore get more immediate concrete results.

11. In accordance with the intention of establishing a balanced cooperation, as a two-way exchange channel, I named five areas that I believed to be worth giving more attention to: 1) Brazilian supply of heavy nuclear components to Atucha II; 2) Argentinian supply of leaching technology for batteries to treat uranium, 3) Argentinian “lease” of yellowcake (uranium concentrate) to Brazil; 4) Argentinian manufacturing of zirconium alloy tubes; and 5) Brazilian services for research reactions, by enriching uranium up to 20%.

12. When introducing such topics, I made clear that Nuclebrás was not in Buenos Aires as a service and material vendor, but simply as an instrument of the Brazilian cooperation towards Argentina’s nuclear program. I said we completely understood and respected their medium and long term goals of a broad autonomy in that field – which was also one of our goals – however, we foresaw possibilities of short-term cooperation, which would allow both countries to optimize its investments and reduce dependency on third parties.

13. In this context, I pointed out the specific examples of heavy components and zirconium alloy. I said that in this case, according to a Zirconium alloy strategic stock policy, it would be perfectly possible for Nuclebrás to postpone investment decisions on tube manufacturing until our needs generated an adequate market scale. So, in this case, I envisioned a possible temporary complementary opportunity with Argentina, based on our interest.

14. Therefore, I signaled that we are capable of supplying heavy components to Atucha II’s primary system, avoiding premature inversions to manufacture those components in Argentina, especially since the core technology to be used at Atucha II – which can be CANDU-type, such as Embalse Nuclear Power Plant – may only be decided in 3 or 4 years. The investments in Pescarmona Industries – by the way, without a global planning – seemed to be too delayed to answer to Atucha II schedule, whose operation is estimated for 1987, as confirmed by Castro Madero, and had little flexibility due to the energy market requirements.

15. Castro Madero did not seem to be prepared for a debate on the matter I talked about, even at exploratory level. For such reason, he suggested we transformed the delegation’s last working session in a closed meeting with Professor Hervásio de Carvalho and me. In this meeting, we agreed that the next step would be the creation of a working group to define “guidelines” to be applied to each one of the selected areas, to create covenants and contracts – as I had suggested. Those instruments would be discussed and negotiated after the governments had approved the “guidelines” and signed a framework agreement. Next week,  Castro  Madero  has  problems  to  solve  with  the  FRG  on  safeguards  negotiation,  and  in  the

immediately two following weeks regarding KWU contracts, so we agreed that the Working Group would meet in about 4 weeks, probably in Brazil and, depending on the pace, conclusions may be available before the Presidential visit, which may enable the execution of an agreement then. In the press conference that followed, Castro Madero briefly informed the press on the decision to maintain conversations open.

16. At the dinner offered to the Brazilian delegation on Friday night, Castro Madero told me he was happy with the visit’s results and he understood our need to be cautious when preparing the cooperation with Brazil, which he reinforced to be a topic of the highest importance. He hinted that notwithstanding the great support this policy receives in Argentina, they needed to work more to convince those who do not support the idea yet.

17. After all of this, I had the impression that Castro Madero only has governmental support for a declaratory agreement, but he needs “green light” for a more concrete program that will inevitably show that the amazing Argentinian nuclear superiority do not exist. The trip that has just finished seems to have convinced him that we are not really ready for an understanding solely at political level – where the Argentine advantage is obvious, especially in the short term – until safeguards negotiations with FRG and IAEA are concluded.

18. In this conversation, Castro Madero told me he expected to send us a guideline proposal in 3 or 4 weeks, and he wished to receive ours before the working group meets.

19. On a more technical report to be made when we return to Brazil, we shall try to assess the Argentinian Nuclear Program.

20. The Embassy, through Ambassador Carlos Duarte and the presences of Second Secretary Eduardo dos Santos and civil attaché Pedro Verrastro, has closely accompanied our mission, and they were of inestimable help at all moments, without, however, giving any opportunity of discussion outside the mission’s technical scope.

21. I also inform that according to Castro Madero, Argentina has already declared to the US that it does not accept “De facto full-scope safeguards” similar to those proposed to Brazil in the “non-paper” presented in September 1979. Regarding FRG, Castro Madero told me it is difficult to accept anything more than the Group of London rules, he admitted they might ratify the Treaty of Tlatelolco with the same reservations Brazil has.

On behalf of Brazil, in Bonn, during visit of the joint scientific-technological commission, I heard from Secretary of State Munchild that one of the proposals to Argentina was a German unilateral statement, whose format was not clear to me, regarding the existence of “de facto full-scope safeguards” in Argentina, a statement that would not be objected to. With this, Bonn believed it was possible to somehow make Argentina agree with signing a “de facto full-scope safeguard” document.

Paulo Nogueira Batista

March 23rd, 1980