A short-notice International Atomic Energy Agency (IAEA) inspection of the Natanz uranium enrichment facility on 13 May confirmed that Iranian engineers were operating about 1300 centrifuges. Until recently there had been problems keeping centrifuges spinning at the required rate. “We believe they pretty much have the knowledge about how to enrich,” said IAEA director general Mohamed ElBaradei. “From now on, it is simply a question of perfecting that knowledge. People will not like to hear it, but that’s a fact.”

According to a document by IAEA deputy director general Olli Heinonen, inspectors conducting a “design information verification” at the Natanz plant on 15-16 April were informed that 1312 centrifuges in eight cascades were running, and that some uranium was being fed into them.

Iran had announced on 9 April that it had begun enriching in the underground Natanz hall, ramping up from a limited research operation above ground. But diplomats disputed the claim pending IAEA confirmation. And despite the confirmation, Western diplomatic sources initially continued to play down Iran’s progress.

However, according to diplomats familiar with the inspectors’ report, in addition to 1300 working centrifuges, another 300 were being tested and appeared ready for operation while another 300 were under construction. “They are at the stage where they are doing one cascade a week,” said one diplomat. A ‘cascade’ has 164 centrifuges, and experts say that at this pace, Iran could have 3000 centrifuges operating by June and could build an additional 5000 centrifuges by the end of the year. The inspectors tested the output and concluded that Iran was producing reactor-grade uranium, enriched to a little less than 5%.

Mohammad Saeidi, vice president for international affairs at the Atomic Energy Organization of Iran (AEOI), said there were three stages to developing enrichment technology. In the first stage between 10 to 20 machines must be mechanically tested using uranium material to see if they can reach a speed of 60,000 or 64,000 revolutions a minute and operate with stability. This had been achieved by April 2006 under IAEA supervision.

In the second phase a chain of machines must be set up to ensure they can work together. There are almost 15 stages in one chain, with 11 centrifuges in every stage. Iran then tested a chain of 164 centrifuges as a pilot operation. He insisted that any development beyond this is effectively industrial enrichment, regardless of the number of machines involved.

“Based on our commitments in the declarations we have presented to the IAEA, we are carrying out enrichment of uranium up to 5% for use in light water power reactors,” Saeidi said. He confirmed that 9t of uranium hexafluoride (UF6) had been transferred from the conversion facility in Esfahan to Natanz in preparation. He said Iran was producing 290t of UF6 gas a year for the programme.

AEOI head Gholamreza Aqazadeh has said the installation of centrifuges was continuing at Natanz. The final target was 50,000 machines, which would be sufficient to produce fuel for the Bushehr nuclear power plant.

Further sanctions

The United Nations (UN) has imposed two sets of sanctions on Iran since December over its refusal to freeze uranium enrichment and US officials have warned of a third, tougher resolution if Tehran does not halt this work, but Iranian leaders have repeatedly said they will not bow to international pressure.

The issue will be discussed in June at the IAEA board of governors meeting in Vienna, based on a new report from ElBaradei. The report will simultaneously be presented to the UN Security Council where it is certain to prompt calls for further sanctions from the USA unless Iran suspends enrichment. The Security Council deadline for suspension passed on 23 May.

However, as the deadline approached, ElBaradei suggested that suspension of enrichment was no longer appropriate. The international community should seek to limit Iran’s developing uranium enrichment capability, rather than try to stop it, he said. Because Iran has overcome previous technical difficulties and will eventually reach industrial scale enrichment, ElBaradei said the purposes of suspension had “been overtaken by events.”

“Until all outstanding verification issues are clarified, and the agency is able to verify the peaceful nature of Iran’s nuclear programme, the focus should be to stop them from going to industrial scale production, to allow us to do a full court press inspection and to be sure they remain inside the [Nuclear Non-Proliferation] treaty,” ElBaradei said.

Further construction

Aqazadeh in April stressed Iran’s determination to continue with its plans for 20GWe of nuclear power implying that if no international suppliers would provide these, Iran would build them itself, although it would take longer. He noted that construction of a small 360MWe power plant was planned and a site had been selected. The fuel was being designed and developed in Iran’s laboratories.

In May, Saeidi said that construction had started. “In the next decade Iran will be one of the most talked-about countries in the world with respect to domestic nuclear energy,” he said, adding that in five years, Iran would be producing both nuclear fuel and electricity.

He also said the Bushehr nuclear power plant being built by Russia would be operational by the end of the year (the Iranian year ends in March 2008). Efforts are continuing to resolve the financial and political problems that have delayed the project in recent months.

Talks with Russia’s Atomstroyexport (ASE) are continuing, with ASE insisting that it still has not received all the necessary payments to continue working and other Russian officials confirming that launch of the plant will be delayed. Russia is demanding $25 million a month but Saeidi explained that this is in effect money in advance and this had not been the agreement, but in the interests of “goodwill” Iran would try to work something out.

Sources close to the AEOI told NEI that political factors were also playing a part in the problems over Bushehr as well as the fact that Russia had over-committed itself in terms of construction abroad and was facing problems with equipment supply. Russian officials have denied this.

Aqazadeh has noted that the dispute with Russia over completing Bushehr and supplying fuel for it had only reinforced Iran’s determination to pursue self-sufficiency. He also said if Russia wanted to take part in the bid to provide two more plants to Iran it would first have to “build confidence.” In April, Iran put out a call for tenders for two 1000MWe units, the results of which will be announced in June. However, because of the ongoing dispute over Bushehr, Russia was not invited to tender, in spite of earlier understandings that it was the favourite to supply further plants to Iran.

Iranian Ambassador to Paris Ali Ahani said in an interview once the political aspects of Iran’s nuclear programme are settled, French companies would be very well placed to enter joint projects with Tehran to construct nuclear power plants in Iran.

European Union sanctions

On 19 April 2007, the European Council approved sanctions against Iran over its nuclear ambitions following the UN Security Council Resolution 1737 (2006).

The sanctions, imposed through a Regulation which is directly applicable in all the 27 European Union (EU) member states, include prohibitions and licensing requirements for exports of certain goods and technology, which could contribute to Iran’s nuclear enrichment related activities, as well as a ban on investments and procurement of certain goods and technology. Furthermore, the EU sanctions freeze assets of certain individuals and entities linked to Iran’s nuclear proliferation activities.

Main features of the EU sanctions:

  • A prohibition on selling, supplying, transferring or exporting all goods and technology contained in the Nuclear Suppliers Group and Missile Technology Control Regime lists, as well as certain dual use goods and technology produced anywhere in the world, to any person in Iran or for use in Iran.
  • A prohibition on technical assistance, brokering services, financing and financial assistance (including grants, loans and export credit insurance) and investment in Iran to enterprises engaged in the manufacture of prohibited goods and technology.
  • The possibility for EU member states to refuse to grant an authorisation for any sale, supply, transfer or export of goods, if they determine that they would contribute to Iran’s enrichment-related, reprocessing or heavy water-related activities, the development of nuclear weapon delivery systems or the pursuit of activities related to topics about which the IAEA has expressed concerns. Any EU member state may annul, suspend, modify or revoke an export licence previously granted.
  • The freezing of funds and economic resources owned by the 10 legal entities and 12 persons listed in the Regulation. Assets of persons and entities not listed in the Regulation but which have been identified as being engaged in or providing support
    for Iran’s proliferation-sensitive nuclear activities or development of nuclear weapon delivery systems, can also be frozen.

The restrictive measures apply to any person inside or outside the EU territory who is a national of a member state, any legal person, entity or body incorporated or constituted under the law of a member state and any legal person, entity or body in respect of any business done in whole or in part within the EU.

Member states are in charge of laying down the rules on penalties applicable to infringement of the sanctions (eg fines, imprisonment, forfeiture and revocation of licences.)

Information supplied by Lourdes Catrain and Delphine Voillemot, Hogan & Hartson LLP, www.hhlaw.com