Source: Global Security Newswire                          Date: 06 April, 2011

The Obama administration has held informal talks with Mongolia about the possibility that the Central Asian nation might host an international repository for its region's spent nuclear fuel, a senior U.S. diplomat said last week. U.S. Energy Department officials and their counterparts in Ulaanbaatar are in the early stages of discussion and there has been no determination yet about whether to proceed with the idea, according to Mr. Richard Stratford, who directs the State Department's Nuclear Energy, Safety and Security Office.

Speaking at the biennial Carnegie International Nuclear Policy Conference, Mr. Stratford said a spent-fuel depot in the region could be of particular value to Taiwan and South Korea, which use nuclear power but have few options when it comes to disposing of atomic waste. "If Mongolia were to do that, I think that would be a very positive step forward in terms of internationalizing spent-fuel storage," he said during a panel discussion on nuclear cooperation agreements. "My Taiwan and South Korean colleagues have a really difficult time with spent fuel. And if there really was an international storage depot, which I have always supported, then that would help to solve their problem."

The United States provides fresh uranium rods to selected trade partners in Asia, including South Korea and Taiwan. For Mongolia to accept and store U.S.-origin spent fuel from these or other nations would require Washington to first negotiate a nuclear trade agreement with Ulaanbaatar. Although Energy Department officials have reportedly engaged in informal talks with Mongolian representatives for several months, Mr. Stratford has not yet had any contact with Ulaanbaatar on the matter, he said. It is not yet certain whether formal negotiations on a nuclear trade pact will move forward.

Energy Department officials traveled to Mongolia last fall for meetings on the matter, according to Mr. Mark Hibbs, a senior associate with the Nuclear Policy Program at the Carnegie Endowment for International Peace. He chaired the discussion on nuclear cooperation. "It was a fruitful discussion," Mr. Hibbs said. "They went into some details [but] it was very exploratory."

In most nations, the idea of accepting foreign spent fuel has seemed an anathema. Russian officials have discussed building an international repository on their territory, but the idea appears to have faded due to domestic opposition. Nuclear expert Jeffrey Lewis said he wonders if the situation would be any different in Mongolia. "I think these guys are fooling themselves [if they] believe we will put a spent-fuel depot in Mongolia. I don't think Mongolia is going to accept being a regional spent-fuel repository," he said.

Mr. Hibbs said that as "a country that's surrounded by two big powers" -- Russia and China -- Mongolia is "trying to carve a niche out for itself economically in the region". Broadening its involvement in the nuclear energy sector might serve as just such an economic lever, he said. It could seek to step up mining of its natural uranium deposits and potentially expand into a wider array of services, such as providing foreign nations with fresh fuel and then taking back the atomic waste at a later date, according to regional experts. This type of move would come at a time when neither Russia nor China has acted on similar concepts for what is termed "leasing" of nuclear material.

There could also be interest among officials in and outside the Mongolian government in developing nuclear power to meet that nation's own growing energy needs, according to some sources. Ulaanbaatar recently signed a memorandum of understanding with Seoul to cooperate on peaceful nuclear technologies and expertise. Mr. Lewis, who directs the East Asia Nonproliferation Program at the Monterey Institute of International Studies, said it was difficult to believe that Mongolia would find it profitable to enter a field that has been dominated for decades by established nuclear energy powers such as Russia and France.

"I don't understand why Mongolia wants to be involved in the fuel-cycle business to begin with," he said. "If I were running Mongolia, I could think of a bunch of other things to spend that kind of industrial investment on before it came down to fuel-cycle services." Nor would it likely prove politically palatable for Mongolia to become a final destination for its neighbors' atomic waste, he argued. "Without some compelling evidence -- like a statement by the government of Mongolia that they're willing to be the region's nuclear waste dump -- I don't see why anybody thinks they would do this," Mr. Lewis said.

If Mongolia ultimately does see merit in offering nuclear fuel services, inking a nuclear trade agreement with the United States would be a shot in the arm, Mr. Hibbs said. "Having the blessing of the US would be very valuable for them," he said. "Mongolia is emerging as a very Western-friendly country. ... [Getting] the agreement would basically underscore that the US supports the development of nuclear energy activities in Mongolia."

Mr. Hibbs said it is highly unlikely that Mongolia is exploring its atomic energy options with an eye toward eventually developing a nuclear weapon. “I think it's inconceivable that Mongolia would be interested in nuclear weapons in the environment that they're in," he said. "It realizes that by being a member of good standing in the [1970 Nuclear Nonproliferation Treaty], it's better served than getting involved in a hair-brained arms race with either the Russians or the Chinese."

Mr. Lewis had a slightly different take on the matter. "I don't think Mongolia has any interest in developing a bomb right now," he said. "But if Mongolia wants to move from uranium mining into the fuel cycle, that could contribute to an unwelcome spread of sensitive facilities."