Moscow’s American Uranium

By Matt Baker

The state-owned Russian nuclear energy company that built Iran’s nuclear reactor in Bushehr is about to finalize a transaction that will give Russia absolute control over one of America’s largest uranium mining sites.

On Oct. 18, nuclear energy juggernaut Rosatom will complete a corporate deal giving it 100 percent control over Canada-based uranium mining company Uranium One, including the company’s U.S. operations in Wyoming, the epicenter of U.S. uranium production. Moscow’s acquisition of Uranium One will also provide Rosatom — the world’s leading builder of nuclear power plants — with uranium exploration rights in Arizona, Colorado, and Utah.

Rosatom, which handed Iran the keys to the Bushehr nuclear reactor just a few weeks ago, is not yet finished with its work in the Islamic Republic. Following a meeting between Russian President Vladimir Putin and Iranian President Hassan Rouhani in September 2013, Iranian nuclear chief Ali Akbar Salehi announced that Tehran and Moscow will cooperate in the future construction of a second nuclear power plant at Bushehr, adding that “construction work is to start soon.”

Rosatom’s nuclear projects also include ventures with China and Venezuela, two countries with less-than-friendly relations with the United States. Russian news agencies also quoted Syrian president Bashar al-Assad in May 2010 as saying that he discussed with then-Russian President Dmitry Medvedev the possibility of building nuclear power plants in Syria.

To put it mildly, with a client roster like this, questions abound regarding Rosatom’s acquisition of Uranium One. When Rosatom acquired its first controlling shares in 2010, the deal came under congressional fire. Representatives Ileana Ros-Lehtinen (R-Fla), Spencer Bachus (R-Ala.), Peter King (R-N.Y.), and Buck McKeon (R-Calif.) penned a letter to then-Treasury Secretary Timothy Geithner warning that “signing over control of this U.S. uranium processing facility to the Russian government unnecessarily jeopardizes U.S. security interests.”

In the end, however, the sale of the initial majority stake in Uranium One was approved by the Committee on Foreign Investments in the United States (CFIUS) and the United States Nuclear Regulatory Commission (NRC). The NRC’s only caveat was to bar Uranium One from exporting any of the produced material without prior approval.

Fast-forward three years, and the proposed transfer of 100 percent control of Uranium One to Rosatom has barely elicited a peep from Congress or the administration. Nor has it raised an eyebrow in Ottawa. In March, Rosatom received approval from the Supreme Court of Ontario, Canada. And because Rosatom’s new deal involves the same parties as the 2010 transaction, does not change the corporate structure of Uranium One, and does not alter Rosatom’s already-held majority control over Uranium One, Rosatom was able to bypass the need for additional approval by CFIUS and the NRC for the 2013 transaction.

While the American regulatory regime is a trusted system, the regime in Moscow is not. Russia has a history of transferring dangerous materials and technologies to rogue regimes, and Rosatom, according to a 2007 report on nuclear nonproliferation by the U.S. General Accounting Office (GAO), “denied [GAO’s] request for access to facilities under its control.”

Uranium One in 2010 issued assurances that “none of the uranium produced in the US will be used by Rosatom to fuel the Iran reactor.” It is now crucial, in light of this new deal, that Rosatom provide additional guarantees that none of the uranium produced or revenue generated from its U.S. operations will be used for nuclear proliferation in Iran, China, Venezuela, Syria, or any other rogue states on Rosatom’s roster.

In the meantime, Congress and the administration should look into whether Rosatom has engaged in any proliferation related to weapons of mass destruction, and thus be subject to sanctions, specifically Executive Order 13382, which sanctions persons engaged in weapons-related proliferation activities and their support networks.

Senator John Barrasso (R-Wyo.) reaffirmed Uranium One’s commitment that it “has no plans to export Wyoming uranium to Russia, or any other country that may not share US interests.” But given Russia’s track record, can we trust Rosatom to play by our rules?

Matt Baker is an associate for policy and special projects at the Foundation for Defense of Democracies, a Washington, D.C.-based policy institute focusing on national security.