08ASTANA2126, KAZAKHSTAN: ULBA METALLURGICAL PLANT SECURE AND

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Reference ID Created Released Classification Origin
08ASTANA2126 2008-10-28 09:07 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6418
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2126/01 3020907
ZNR UUUUU ZZH
O 280907Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3668
INFO RUCNCIS/CIS COLLECTIVE 0738
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0138
RUEHKO/AMEMBASSY TOKYO 0848
RUEHIT/AMCONSUL ISTANBUL 0065
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0296
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0216
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2022
RUCNDT/USMISSION USUN NEW YORK 1971
RUEHNO/USMISSION USNATO 2307
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 ASTANA 002126 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, ISN, H FOR SENATOR RICHARD LUGAR 
 
E.O. 12958: N/A 
TAGS: PGOV PINR ENRG EINV OREP KNNP KZ
SUBJECT: KAZAKHSTAN:  ULBA METALLURGICAL PLANT SECURE AND 
SUCCESSFUL 
 
REF: ASTANA 1867 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Poloff met on September 10 in 
Ust-Kamenogorsk with several officials from the Ulba 
Metallurgical Plant, Kazakhstan's leading uranium production 
enterprise, to discuss the company's business plans.  Ulba is 
trying to increase its international cooperation, especially 
with Russia, Japan, and China.  Ulba's management also 
remains focused on maintaining the safety of their 
highly-secure facility.  END SUMMARY. 
 
FROM TOP SECRET TO ISO-CERTIFIED 
 
3.  (SBU) Located in Ust-Kamenogorsk, in East Kazakhstan 
oblast, the Ulba Metallurgical Plant -- originally a 
top-secret Soviet uranium production facility -- is currently 
one of the world's largest producers of fuel for nuclear 
power plants.  In addition to uranium, the plant also 
produces beryllium and tantalum byproducts.  Ulba advertises 
that its facility was certified in 1999 by General Electric 
to supply uranium dioxide ceramic powder to the U.S. market 
and was ISO certified in 2000.  Ulba maintains that since 
leading global companies such as General Electric, 
Westinghouse, AREVA, NFI, and MNF certify its uranium dioxide 
powders and fuel pellets, its products are among the highest 
quality in the world.  Ulba invested $4 million over the last 
four years to develop lower-cost and more effective uranium 
production techniques.  Ulba, which is one of the largest 
enterprises in the world capable of processing a full 
production-cycle of beryllium and tantalum, also announced 
plans to begin a five-year $20 million investment program to 
improve its tantalum production line. 
 
SEEKING MORE COOPERATION WITH RUSSIA, CHINA, AND JAPAN 
 
4.  (SBU) Poloff met on September 10 with two Ulba officials 
and one from Kazatomprom, majority owner of Ulba, to discuss 
Ulba's role in Kazakhstan's efforts to become a leading 
producer of uranium products.  The meeting took place on the 
margins of a Global Initiative (GI) exercise conducted at 
Ulba (see reftel).  Kazatomprom Deputy Security Director 
Victor Pshenichniy, Ulba Security Director Roman Nadtochniy, 
and Ulba Nuclear Materials Control and Accounting Director 
Yevgeniy Yasko underlined to poloff that Ulba has been very 
successful commercially and plans to continue to grow its 
scope of business.  The three officials emphasized that Ulba 
is seeking cooperation with international partners, 
especially with Russia, China, and Japan. 
 
5.  (SBU) Pshenichniy reminded poloff that Kazakhstan does 
not currently enrich uranium, despite the fact that the 
country has some of the world's richest deposits of uranium. 
Thus, while Ulba produced highly enriched uranium (HEU) 
during the Soviet period, the bulk of the plant's current 
production involves turning lowly enriched uranium (LEU), 
imported into Kazakhstan from Russia, into fuel pellets for 
nuclear power facilities.  The Ulba and Kazatomprom 
representatives hinted that they hoped cooperation with 
Russia would open up new business opportunities, but did not 
clarify whether this would take the form of more LEU fuel 
pellet production or production of other uranium products. 
(NOTE:  Kazatomprom, majority owner of Ulba, is a partner in 
two uranium enrichment projects with Russia, both located in 
Angarsk, Russia:  the International Uranium Enrichment Center 
and the Russian-Kazakh Uranium Enrichment Center.  Analysts 
suggest that Kazatomprom may gain added value for its uranium 
exports from this cooperation.  Russia, on the other hand, 
 
ASTANA 00002126  002 OF 002 
 
 
would like to gain guaranteed access to Kazakhstani uranium 
deposits, which are the second largest in the world.  END 
NOTE.)  Other areas of Ulba's cooperation with Russia include 
the production of high-precision equipment through Ulba 
subsidiary Mashzavod LLP and the production of hydrofluoric 
acid through Ulba Fluorine. 
 
6.  (SBU) Regarding cooperation with China and Japan, Ulba 
has a  Chinese joint venture called Yingtan Ulba Shine Metal 
Materials Company Ltd., and also sells aluminium-beryllium 
master alloys through its subsidiary, Ulba-China Company Ltd. &#x0
00A; On its website, Ulba advertises its cooperation with 
Japanese companies NFI and MNF, as well as with General 
Electric Japan Ltd. 
 
PLANT REMAINS SECURE 
 
7.  (SBU) All three officials emphasized that Ulba's main 
achievement has been avoiding any nuclear smuggling incidents 
as a result of its excellent physical security and accounting 
procedures.  IAEA inspectors conduct a thorough annual 
inspection of the plant, especially the uranium production 
process.  Poloff personally observed that the Ulba facility 
was, in fact, shut-down, ostensibly for an IAEA inspection, 
during the GI exercise. 
 
HOPES FOR NUCLEAR COUNTER-TERRORISM CENTER 
 
8.  (SBU) Pshenichniy, an ethnic Russian with a Ministry of 
Defense background who has over 17 years of experience in the 
nuclear security field, stated that he is deeply worried 
about the potential for nuclear terrorism and that his goal 
is to establish a nuclear counter-terrorism center in 
Kazakhstan before he retires.  For detailed information on 
Ulba's security, Pshenichniy occasionally deferred to Yasko, 
a "rising star" within Ulba's bureaucracy.  Yasko, an ethnic 
Russian who spoke excellent English, had previously been to 
the United States on a training program for several months. 
Yasko was very willing to talk about Ulba's prospects with 
poloff, and expressed genuine appreciation for the Nunn-Lugar 
Cooperative Threat Program, explaining that much of Ulba's 
state-of-the-art security system is based on U.S. equipment 
provided through the program. 
HOAGLAND

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