U.N. nuclear body seen backing new fuel supply plan

U.N. nuclear watchdog governors are expected to approve next month a new fuel supply plan meant to help countries develop atomic energy without increasing the risk of weapons proliferation.

Dozens of states, some in the conflict-prone Middle East, are considering launching nuclear power programmes to meet growing energy demand and reduce dependence on fossil fuels.

But the same technology that is used to make fuel for civilian nuclear reactors can also provide bomb material if refined to a very high degree.

To reduce the need for aspiring nuclear power states to enrich uranium themselves to generate electricity, several initiatives have been put forward in recent years designed to ensure that they would receive uninterrupted fuel deliveries.

In the latest such step, Britain is to submit a proposal on the Assurance of Nuclear Fuel Supply to the March 7-11 meeting of the 35-nation governing board of the International Atomic Energy Agency (IAEA), diplomats to the U.N. body say.

I'm sure it will pass, one European envoy said.

Unlike two projects previously approved by the board, it would not involve setting up a uranium reserve which countries could tap into if their supplies were suddenly cut off.

Instead, the governments of the supplier and the customer would sign a bilateral agreement, to guarantee that shipments would not be halted for non-commercial reasons.

This complements the earlier fuel bank proposals. Unlike them, it isn't about physical stocks, nor is it about arrangements that carry significant new costs or have big resource implications for the Agency, Simon Smith, Britain's ambassador to the IAEA, told Reuters.

The aim is to make it easier for countries to decide that an indigenous enrichment capability is something we really don't need to spend money on, because we are confident in the reliability of supply from the commercial market, he added.

FUEL RESERVES

The IAEA would throw its weight behind the plan by co-signing the agreement, effectively giving the customer state a clean bill of health from a proliferation point of view.

Countries under investigation by the IAEA over suspicions regarding their nuclear activities, currently Iran and Syria, would not be able to benefit from such fuel guarantees.

The IAEA has been mulling several plans under which states would be furnished with enriched uranium for their civilian nuclear programmes if their supplies were halted for political reasons and they can show a perfect non-proliferation record.

The governing board late last year approved a U.S.-backed fuel supply plan, under which the U.N. agency would run a reserve of low-enriched uranium (LEU). In 2009, it backed an offer by major uranium producer Russia to host such a facility.

Iran's disputed enrichment programme, which the West fears is covertly aimed at developing nuclear weapons, has helped push the idea up the agenda after decades on the political back-burner. Iran says it only seeks to produce electricity.

But some developing states have voiced concern such schemes may limit their right to sovereign nuclear energy capabilities, even if Western diplomats say this would not be the case.

One diplomat from a developing country said he did not anticipate opposition to the British plan, which is backed by other European states, the United States and Russia.

But he questioned how it would work in practice if there was a politically-motivated halt in supplies. You can't really guarantee it, unless there is a third-party guarantee, he said.