Taisuke Abiru the TOKYO MOSCOW ASTANA TRIANGLE: STRATEGIC
Total Page：16
File Type：pdf, Size：1020Kb
Taisuke Abiru THE TOKYOMOSCOWASTANA TRIANGLE: STRATEGIC PARTNERSHIP IN NUCLEAR ENERGY IS INEVITABLE At the end of February 2007, the government of Japan expressed its willingness to begin negotiations on entering into a bilateral agreement on cooperation in the area of nuclear ener gy with Russia. In April, Sergey Kiriyenko, the head of Rosatom, the Russian federal atomic energy agency, announced the agency’s intent to complete all procedures in conjunction with the signing of the agreement before the end of 2007.1 Although an intergovernmental agree ment on nuclear energy between Japan and Russia is yet to be signed, all the technical work has been completed, and the agreement has been prepared and is ready for signing in the near future.2 Considering the course of JapaneseRussian consultations on nuclear energy issues, it would be useful to analyze the reasons why Japan has proceeded with establishing a partnership with Russia in the atomic sphere and to assess the prospects for developing bilateral cooperation. URANIUM FROM KAZAKHSTAN On April 29 and 30, 2007, Akira Amari, Japan’s minister of the economy, trade, and industry, together with a delegation of 150 people, including government officials and privatesector representatives, as well as executives from the electrical energy and industrial companies associated with nuclear energy, visited Kazakhstan. As a result of bilateral meetings, 24 agreements and a memorandum of cooperation were signed in seven spheres of nuclear energy, such as the extraction and exporting of uranium, nuclear fuel component fabrication, COMMENTARY nuclear technology research and development, and so forth.3 Regarding uranium, an agreement was reached in 2006 between Sumitomo Corp., Kansai Electric Power Co., Inc. and NAK Kazatomprom regarding the development of the West Mynkuduk uranium deposit in Kazakhstan (estimated yearly output of 1,000 metric tons of uranium per year).4 Subsequently, the Marubeni Corp, Tokyo Electric Power Co., Inń., Chubu Electric Power Co., and others, together with NAK Kazatomprom, obtained rights to develop the Kharasan1 and Kharasan2 uranium deposits (2,000 metric tons per year).5 Today, the annual consumption of natural uranium in Japan is 8,000 metric tons. According to data obtained from the Federation of Electric Power Companies of Japan, 94 percent of the uranium consumed in 2005 was imported from four countries: Canada (36 percent), Australia (36 percent), Niger (11 percent), and Namibia (11 percent). Until recently, imports from Kazakhstan accounted for only 1.2 percent of uranium consumption.6 On the basis of a series SECURITY INDEX No. 3 (85), Volume 14 117 of agreements signed with Astana in 2006–2007, Japan obtained rights to extract uranium that could supply 30–40 percent of the country’s total requirements.7 Japan’s active policy to acquire rights to extract uranium in Kazakhstan is a consequence of significant changes in the structure of the global demand for uranium. The current volume of production of natural uranium (40,000 tons) can meet 50–60 percent of global demand (about 70,000 metric tons). This shortage is currently being covered by exist ing reserves that were accumulated during the 1990s as a result of low prices and secondary sources of uranium, including uranium obtained by depleting highly enriched uranium (HEU), or removed from nuclear warheads. However, it is predicted that, as a consequence of decreased uranium production from secondary sources, and also in view of the largescale increase in demand for uranium from India, China, and other countries, its future supply in the market will become insufficient to meet global demand. Hence, an increase in the production of natural uranium will be necessary on a global scale.8 In this sense, from the standpoint of the energy security of Japan, the exploitation of new ura nium deposits in Kazakhstan is of no small significance. URANIUM ENRICHMENT SERVICES IN RUSSIA Another important problem facing Japan’s government and nuclear industry is to establish a practical form of cooperation in the area of nuclear energy with Russia. Japan’s own uranium enrichment capacity currently provides only 10 percent of the country’s total requirements, and in the future, only 30 percent of this demand will be met (1.5 million SWU).9 For this rea son, Japan will remain dependent on obtaining uranium enrichment services from abroad for the foreseeable future. At present, there are four companies in the world that can export uranium enrichment servic es. These are the GermanBritishDutch consortium Urenco; Eurodif, which is a whollyowned subsidiary of the French company Areva; the American company USEC, and the Russian com pany Techsnabexport. Among these companies, the latter has the largest capacity for supply ing uranium enrichment services, estimated to be approximately 20 million SWU, or 40 percent of total world capacity.10 After a sharp increase in prices for natural uranium, there has also been a gradual increase in the cost of enrichment services.11 Foreseeing a significant increase in the demand not only for natural uranium but for enrichment services as well, Japan intends to develop close cooperation with Russia as one of the main suppliers of this service to the world market. Japanese power companies headed by Tokyo Electric Power Co. are already acquiring from Techsnabexport 12 percent of Japan’s total requirement for uranium enrichment services. This, however, is a result of secondary contracts derived from the U.S.Russian HEULEU agreement. This is why, for instance, when it is necessary to place an order with Techsnabexport to enrich a portion of 6,400 metric tons of reprocessed uranium stored in Great Britain and France, Japan must sign a bilateral agreement in the area of nuclear energy with Russia. With respect to uranium that will be extracted on Kazakh territory that is geo graphically and economically in close proximity to Russia, it is fully appropriate to rely on Techsnabexport as the primary supplier of enrichment services. These are the opportunities that the Japanese government is currently considering.13 THE MOSCOWASTANA PARTNERSHIP For its part, Russia is experiencing a shortage of natural uranium deposits on its territory.14 For this reason, when implementing the International Uranium Enrichment Center (IUEC), the necessity arises to involve, first of all, Kazakhstan, with its significant uranium reserves. In October 2006, Russia and Kazakhstan established three joint ventures (JV) in the area of nuclear energy: (1) the JV Nuclear Power Plants to develop and market power installations with low and mediumcapacity nuclear reactor projects in Russia, Kazakhstan, and third countries; 118 THE TOKYOMOSCOWASTANA TRIANGLE: STRATEGIC PARTNERSHIP IN NUCLEAR ENERGY IS INEVITABLE (2) the JV Akhbastau to develop the Yuzhnoe Zarechnoye deposit and parts of the Budennovskoye deposit on the territory of Kazakhstan; (3) the JV Center for Uranium Enrichment15 for enriching uranium mined in Kazakkstan at the Angarsk Electrochemical Combine (AEKhK) enrichment facilities. Moreover, in May 2007, Kazakhstan decided to partic ipate in the IUEC project in Angarsk,16 acquiring 10 percent of the company’s stock.17 In total, in the words of Rosatom chief Sergey Kiriyenko, three independent projects will be implemented in Angarsk. First, the combine itself will be constructed, the capacity of which will nearly double by the year 2015. Next will come the formation of the IUEC and, finally, the third project – the RussianKazakh JV Center for Uranium Enrichment. Whether the aforementioned RussianKazakh JV will join the IUEC in the future or whether they will operate independently is difficult to say at this time. Nevertheless, it can be said with cer tainty that, in any case, a significant portion of the uranium obtained by Japan in Kazakhstan will be enriched at Angarsk. RESTRUCTURING THE NUCLEAR INDUSTRY IN RUSSIA The world market for nuclear power plants is undergoing an intensive shakeout. The major battle is taking place among three conglomerates – the JapaneseAmerican Toshiba Westinghouse, the FrancoJapanese ArevaMitsubishi Heavy Industry, and the U.S.Japanese GE Nuclear EnergyHitachi. In early 2008, the federal agency for nuclear energy, in an attempt to create a vertically inte grated holding company that would be competitive outside of Russia, formed JSC Atomprom, which integrates key Russian nuclear power concerns and forms part of the stateowned com pany Rosatom. It has fallen to Atomprom to meet the ambitious goal of capturing 20 percent of the world market for the construction of new atomic power plants within the next 30 years through the expansion of international cooperation and the formation of JVs with foreign com panies.18 Russia produces and exports light water reactors (VVER), which, due to their cost, remain competitive on the world market. A great deal of Russianproduced equipment such as tur bines and automated process monitoring and control systems, are, however, inferior to their Western equivalents.19 In particular, until recently, Russia had no facilities capable of manufac turing lowspeed turbines for nuclear power plants.20 To solve this problem, the Russian com pany Atomenergomash, which is now a part of Atomprom, and the French company Alstom formed a joint venture to produce lowspeed turbines in June of 2007.21 In the future, it is entirely possible that by expanding international cooperation and by forming JVs with foreign partners, Atomprom will be able to offer its partners either a guarantee of long term uranium enrichment services or a market niche in the production of nuclear power plants in Russia (it is planned to build a total of 40 new nuclear reactors by the year 2030).22 COMMENTARY A NEW MODEL FOR CONDUCTING NUCLEAR BUSINESS: TOSHIBA BETWEEN MOSCOW AND ASTANA In the meantime, the rules of conducting business in the nuclear power industry are radically changing. Against the background of the growing demand for fuel for nuclear power plants, additional competitive advantages are being gained by those companies which, in addition to building nuclear power plants, can guarantee longterm supplies of nuclear fuel.