News

USIS Washington 
File

23 September 1998

TEXT: US, RUSSIA REACH AGREEMENT ON "NUCLEAR CITIES"

(To bring commercial enterprises to "nuclear cities") (880)



Vienna - U.S. Secretary of Energy Bill Richardson and Russian Minister
of Atomic Energy Yevgeny Adamov signed an agreement September 22 to
bring commercial enterprises to Russia's closed "nuclear cities" and a
joint report that outlines a framework to resolve the problems with
the agreement for U.S. purchases of uranium from Russian nuclear
weapons (the HEU deal).


The negotiations and signing ceremony took place during a meeting of
the International Atomic Energy Agency (IAEA) General Conference in
Vienna.


Following is the text of Department of Energy press release:



(Begin text)



U.S. DEPARTMENT OF ENERGY

September 22, 1998



RICHARDSON AND ADAMOV REACH AGREEMENT ON "NUCLEAR CITIES" 

AND FRAMEWORK FOR RESOLVING PROBLEMS WITH THE HEU DEAL



Vienna, Austria -- After a series of intensive negotiations, Secretary
of Energy Bill Richardson and Russian Minister of Atomic Energy
Yevgeny Adamov today signed an agreement to bring commercial
enterprises to Russia's closed "nuclear cities" and a joint report
that outlines a framework to resolve the problems with the agreement
for U.S. purchases of uranium from Russian nuclear weapons (the HEU
deal). The negotiations and signing ceremony took place during a
meeting of the International Atomic Energy Agency General Conference
in Vienna, Austria.


"These successes are important to our national security interests and
represent significant progress in our nonproliferation cooperation
with the Russians," said Secretary Bill Richardson.


Nuclear Cities



The ten "nuclear cities" were among the most secret facilities in the
former Soviet Union. Behind their walls, thousands of scientists and
engineers worked on the design, assembly and production of the Soviet
nuclear arsenal.


Under the Nuclear Cities Initiative, the United States and Russia will
join forces to bring jobs and commercial enterprises to Russia's
secret "nuclear cities." The United States will lend its private
enterprise experience to the ten Russian cities and matchmake private
sector companies with the Russian facilities for manufacturing,
marketing and sales of commercial goods.


"This is a Russian-led effort to 'rightsize' their nuclear complex and
use the valuable skills of their scientists and engineers to promote
economic development and new enterprises -- to turn the scientific and
technological expertise that resides in their premier weapons
facilities toward peaceful uses," Richardson said. "I can not
emphasize enough how important it is to us all that economic hardship
not drive Russian nuclear weapons scientists into employment places
like Iran and North Korea."


The Initiative draws on the experience of the United States in
restructuring the former nuclear weapons laboratories and production
complexes. The Department of Energy will share the experience in
restructuring that has taken place at U.S. nuclear sites such as in
Hanford, Washington and Oak Ridge, Tennessee, and will provide
business training and support for development at the nuclear cities
and institutes in Russia affected by downsizing. The United States
technical assistance will include training in business planning,
methods to attract business to the area, and ways to get new business
off the ground.


"The success of the Nuclear Cities Initiative will also serve our
mutual arms control goals," Richardson said. "We have both had to
worry about 'rightsizing' our nuclear complexes as our nuclear
arsenals come down in size. We hope our experience will be a big help
to the Russians as they start to close nuclear facilities."


HEU Joint Report



"The HEU purchase agreement is important to both our nations because
it gets nuclear weapons-grade material out of circulation and brings
much needed hard currency to the Russian economy," Richardson said.
"The joint report we are signing today provides the framework to
remove potential obstacles to implementing the agreement -- it is
important because it is based on the premise that the solution is a
commercial agreement between Russia and a group of western uranium
companies."


Under the HEU Agreement that was signed in 1993, Russia is converting
highly-enriched uranium extracted from dismantled nuclear weapons to
low-enriched uranium which is delivered to the U.S. for use in
commercial nuclear reactors. Russia receives substantial payments for
this material from USEC.


At the summit in September, Presidents Clinton and Yeltsin recognized
the need to address additional payments to Russia as compensation for
the value of the natural uranium used to produce the reactor fuel
delivered to the U.S.


The United States has agreed to take a number of steps to encourage
and facilitate a deal between Russia and the western companies. These
steps include:


-- deferring sales of uranium by the Department of Energy;



-- arranging an advance payment to Russia to be repaid through future
deliveries of enriched uranium; and


-- assistance in returning a portion of the natural uranium to Russia.


In turn, Russia commits to conclude an agreement with the group of
western companies that will allow Russia to realize fair value for the
Russian material.


The United States is committed to continuing to work with both Russia
and the western companies to reach a mutually acceptable commercial
solution. The framework in today's joint report will ensure that
smooth implementation of the HEU agreement will continue for the next
months while all parties seek agreement on commercial terms for fair
payment to Russia.


(End text)