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FM USMISSION UNVIE VIENNA
TO RHEBAAA/DOE WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 9362
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY
RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0834
RUEHRL/AMEMBASSY BERLIN PRIORITY 0786
RUEHLO/AMEMBASSY LONDON PRIORITY 1138
RUEHMO/AMEMBASSY MOSCOW PRIORITY 0889
RUEHFR/AMEMBASSY PARIS PRIORITY 0993

C O N F I D E N T I A L UNVIE VIENNA 000192 

NOFORN
SIPDIS

CORRECTED COPY (PARA 28 CONTAINS ADDITIONAL INFORMATION THAT WAS INADVERTENTLY LEFT OUT OF THE ORIGINAL CABLE.)

E.O. 12958: DECL: 03/19/2024TAGS: AORC IR IAEA KNNP MNUC

Classified By: Ambassador Gregory L. Schulte FOR REASONS 1.4 (c) AND (e) 
 
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Summary 
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¶1. (C) P5 1 experts and an EU representative met at the U.K. Mission on March 9 to discuss technical issues contained in the IAEA Director General’s reports on Iran and what that report implies for Iran’s progress on its nuclear program. This was the third meeting in a series of similar experts’ discussions (previously held in May 2008 and June 2007). By pre-agreement, the meetings do not produce agreed/common conclusions, but there were no objections to the UK Ambassador’s summary of discussions noting that Iran’s current centrifuge operations at Natanz were not adequate to support Tehran’s stated commercial objective, although they had improved substantially over the 2007 performance. The experts also noted it was of concern that Iran has not cooperated with the IAEA on issues related to possible military dimensions. All agreed to show continued support for the IAEA’s investigation into these issues. 
 
¶2. (C) France, the U.K., and the U.S. provided all the presentations on Iran’s nuclear fuel cycle, weaponization-related activities, and IAEA safeguards, but Russia offered useful commentary about the status of the Bushehr power reactor. China was more engaged than in previous meetings and was heavily focused on questions regarding Iran’s centrifuge performance and the possibility of further progress by Iran on that front. DDG for Safeguards Olli Heinonen participated at the end of the session and usefully answered questions about Iran’s centrifuge program and Iran’s refusal to allow IAEA access to the Heavy Water Research Reactor. He also reviewed the fact that select sensitive issues from the August 2007 work plan had been kicked back to the “alleged studies basket” in order to facilitate reaching that basket as the IAEA attempts to engage the Iranians on the most sensitive, military-related aspects of the investigation. Heinonen was unambiguous in dismissing Iran’s “need” to have copies of the “alleged studies” documents, an issue unhelpfully raised by the German DCM. Overall, experts found the discussions useful, especially since there seemed to be no dissent on the unofficial conclusions made. No one objected to the Chair’s suggestion that the group should meet again. End Summary. 
 
 
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The Enrichment Part of the Fuel Cycle 
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¶3. (C) The French began the discussion by highlighting Iran’s indigenous sources of uranium -- from phosphate deposits (a potential future source), the Saghand uranium mine, and the Gachin uranium mine. The French noted that the ore processing facility at Ardakan, which will process the uranium from Saghand, is scheduled to start operations in March 2009, according to Iranian statements, while the current status of the ore processing facility at Gachin is unknown. They also pointed out that even if the mines at Saghand and Gachin operated at their stated capacity of approximately 70 tons per year, this amount of uranium would support only about 50 percent of the demonstrated capacity of the Uranium Conversion Facility (UCF) at Esfahan. Regarding activities at the UCF, the French explained that Iran’s current uranium stockpile was dwindling, with less than 100 tons of uranium remaining, and that Iran had significantly slowed down operations at the UCF during 2008 and 2009, most likely to preserve its declining stockpile. The French noted that Iran is thought to have uranium-bearing phosphate rock deposits in the northern part of the country, with uranium content ranging from 50 to 700 parts per million, and that Iran might in the future look to exploit these deposits. Regarding potential sources for importing additional uranium, the French experts mentioned the Congo without further elaboration. Such transfers are proscribed under UNSCR 1737. 
 
¶4. (C) The U.S. noted that operations at the UCF already have been impacted by the uranium shortage and that Iran can  never be fully independent for its complete nuclear fuel cycle. The U.K. added that the current uranium shortage will not have a near term impact on operations at Natanz, since Iran has plenty of UF6 to keep existing centrifuges running for several years. The U.S. suggested that countries should be on the look out for Iran trying to procure uranium or large amounts of uranium-bearing phosphate rock from abroad, and also possible efforts to modify existing phosphoric acid production lines to extract the uranium. 
 
¶5. (C) Turning to enrichment-related activities, the U.K. led the discussion with a detailed presentation on Iran’s centrifuge progress and performance in 2008. The U.K. estimated that the IR-1 (P-1) cascades at the Fuel Enrichment Plant (FEP) performed at an average level of 0.6 separative work units (SWU) per machine-year during 2008. The U.S. indicated agreement with this value, adding that performance peaked during mid-2008 and declined somewhat since then. The U.K. developed a sliding scale of Iranian uranium enrichment, concluding that after 5 years, Iran could possess 20 tons of low enriched uranium hexafluoride (UF6) with 8 units of 3,000 centrifuge machines, at Iran’s current pace of installation--approximately 2 cascades per month--and operation. The U.S. noted that this was about two-thirds of the amount needed for a single annual fuel reload for a Bushehr-type reactor. Russia inquired as to UK views on whether Iran has enough centrifuge parts to continue cascade installation at a rate 2 per month; the U.K. noted that it is conceivable that they do, but that it is difficult to say absent further Iranian transparency. The U.K. noted that it is possible Iran still needs to procure some associated parts. Both the U.K. and the U.S. noted that Iran had operated its centrifuges at Natanz considerably better in 2008 than in 2007, but it was implausible, as disussed at the previous experts meeting, that Tehran could reach its claimed commercial program goal with the P1-type/IR-1 centrifuges. 
 
¶6. (C) Russia agreed that equipping all 8 cascade units or beyond at Natanz with P-1/IR-1 machines was a “waste” in the commercial context. Russia also replied that Iran does not need a commercial program to support the Bushehr reactor because Russia already has committed to support the lifetime operations of that reactor, including by providing fuel. The U.S. commented that although centrifuge operations in 2008 were “mediocre,” Iran had now demonstrated centrifuge operations such that it had the technical ability to produce highly enriched uranium (HEU) if it so chose. Consequently, even if Iran did not have a viable commercial capability, Iran is capable of producing significant amounts of low enriched uranium. The U.S. also called into question the assumption that Iran was focused on developing a commercial capability, and that it is possible Iran was intending only to demonstrate a “fait accompli” capability in the face of international pressure and to produce a stockpile of LEU.  

¶7. (C) The U.S. asked what were the drivers--political, technical, or both--for Iran not feeding UF6 into the nine installed, but not-yet-operating, cascades in Unit A26, and when might Iran transition from the IR-1 centrifuge to one of the new generation machines. The U.K. agreed with the U.S. comment that it was possible that Iran was performing more mechanical and quality control tests, and fixing leaks and other problems before proceeding forward with operations of additional cascades, unlike in the past.  

¶8. (C) Germany said it had a “feeling” that Iran would use the first cascade hall of 27,000 machines for the IR-1 centrifuges and fill the second cascade hall with the more advanced centrifuges. The U.K. responded that the relatively low numbers of the new generation centrifuge machines--IR-2, IR-3, and IR-4--in the pilot fuel enrichment plant (PFEP) at Natanz seems to indicate that the Iranians are still in the test and development stage.  

¶9. (C) France presented a chart of Iran’s production of low enriched UF6 and asked for others’ assessments on how much low enriched uranium (LEU) would equate to a “significant quantity” (SQ) of HEU, if it were further enriched and converted to metal. The U.K. responded that in a simple steady-state system, 1000 kg of low enriched UF6 would equal one SQ, but Iran would need more than that for its first weapons-worth of material. France noted their estimates were roughly around 1500 kg for Iran’s first weapon. There was no dissent among experts to 1500 kg as the likely threshold. France also asked if Iran could produce 20 percent enriched uranium at Natanz using its existing cascade configuration. The U.S. indicated that Iran could re-feed the 3.5 percent enriched uranium that it currently is producing to achieve roughly 20 percent enrichment, but did not know what measures Iran might have to take to ensure the higher enrichment level did not produce a safety/criticality issue in the cascade feed and withdrawal systems. The U.S. pointed out that it would be more practical to use only a portion of the existing cascades for such re-feeding, leaving the remaining cascades to continue low enriched UF6 production. 
 
 
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The Reactor Side of Things 
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¶10. (C) The U.K. led a short discussion on reactors and fuel fabrication, noting that this section of Iran’s fuel cycle was well behind the uranium enrichment track. In a particularly helpful intervention, Russia reiterated (without prompting) the statement it had made at the previous experts meeting that Iran’s fuel cycle/fuel fabrication activity currently has no connection to the Bushehr reactor, because there already is a contract for Russia to provide 10 fuel loads--which will last for a little more than 10 years--for the reactor. Replying to the U.S. question if it was possible for the fuel to be lQd into Bushehr the second quarter of this year, as indicated in the IAEA Director General’s February report, Russia said that it was possible, but it was more difficult to determine when the reactor would go critical. The U.S. asked if Russia would supply Iran with the licensing so that Tehran could make its own fuel for Bushehr once the 10-load contract runs out. Russia responded that when negotiating fuel contracts with Iran, Tehran insisted on only the first 10 loads, but Russia expects to supply fuel for the lifetime of Bushehr and it would not agree to provide Iran the necessary technology/license to make its own fuel for the Bushehr reactor. 
 
¶11. (C) France asked if the 10-load contract had actually been signed by the Iranians and was “in effect.” Russia responded that the contract had been “agreed to,” and that is what mattered.  The U.S. commented that IAEA-sponsored Iranian safety and regulatory training for Bushehr was not scheduled until later this year, and posited that there might be a safety issue associated with operating Bushehr before that training takes place. Russia replied that its technicians would be in charge of all the operations at Bushehr in the near term, so it did not matter when the safety training for Iranians took place. XXXXXXXXXXXX  
 
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Concerns with Lack of Progress on 
Possible Military Dimensions 
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¶12. (C) The U.S. started the discussion on possible  military dimensions (PMD) and noted the IAEA has not been  able to make any progress on this issue of serious concern  since August 2008 because of lack of Iranian cooperation.  The U.S. noted that the IAEA has reported at length on the  extensive documentation related to Iran’s effort to design a  nuclear warhead and that the only response Iran has offered  is that the information is “fabricated.” The U.S. explained  that the IAEA first began reporting on Iran’s nuclear weaponization-related work in January 2006 and continued to describe in detail the nature of the work in subsequent DG reports and technical briefings. 
 
¶13. (C) Recalling the U.S. Intelligence Community’s assessment in the 2007 NIE that Iran halted its nuclear weapons work in 2003, France asked about information in DDG Safeguards Olli Heinonen’s February 2008 technical briefing which indicated some activities had taken place in 2004. The U.S. responded that the information in Heinonen’s February 2008 briefing was consistent with the 2003 weaponization halt assessment, since some activities were wrapping up in 2004. The U.S. commented that acquisition of a nuclear weapons capability requires more than just the work on a nuclear device. Instead, production of fissile material is key, and Iran has continued to develop that capability. At the end of the day, the U.S. noted, it is important for Iran to fully disclose any past weaponization-related work, implement the Additional Protocol (AP), suspend all proliferation sensitive nuclear activities, and fully cooperate with the IAEA in order to begin to restore international confidence in the peaceful nature of Iran’s nuclear program. If Iran does not do this, U.S. experts said, that would suggest Iran wishes to hide and preserve its past work, perhaps to keep a future weapons option open. 
 
¶14. (C) The U.K. expressed concern that the PMD issues  receive less and less attention in the DG’s reports. Russia  agreed, but noted its view that the IAEA has shared as much  information as it has related to PMD and that there is  nothing new to report. Sharing the concern that less  attention seems to be paid to PMD, the U.S. recalled that the  2007 NIE assessment indicated that the 2003 weapons halt was  at least partially due to the increased international  scrutiny and pressure at the time. It is extremely important  to continue the international pressure, in the U.S. view, so  that Tehran does not feel comfortable reversing the halt.   

¶15. (C) The DCM from the German Mission asked why copies of  the alleged studies information could not be provided to Iran  and remarked that some Board members saw this as a hindrance  to the verification process. The U.S. suggested that it  would be a good idea to get Heinonen’s opinion on that issue,  in particular whether the IAEA inspectors truly saw this as a  hindrance to their investigation. The U.K. replied that  Heinonen has made very clear to them that the IAEA is not  asking for anything more to be shared with Iran, especially  since Iran refuses to cooperate on what the IAEA already has  shared. The French noted that Iran still has not provided an  answer to the origin of the uranium hemispheres document and  how it came to be in Iran. The U.S. acknowledged this, and  noted that it is also important that the IAEA receive all  possible assistance in resolving concerns that foreign  expertise was provided to Iran regarding design of an  implosion device.   
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Other Outstanding Issues 
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¶16. (C) The U.S. noted that in addition to the outstanding issues related to PMD, Iran still has not clarified the IAEA’s concerns about the nature of the Lavizan facility and equipment, has not granted the IAEA access to the Gachin mine and ore processing plant, and that several issues from the August 2007 work plan that were not resolved were pushed to the “alleged studies” section of the work plan. Russia asked how the IAEA could address all these issues as long as Iran refuses to implement the AP. The U.S. replied that the UNSC has empowered the IAEA to resolve all outstanding issues; therefore, the IAEA has the right to seek clarifications on these issues, but cannot do so without Iranian cooperation. 
 
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Safeguards and Verification 
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¶17. (C) France took the lead in discussing safeguards and verification of Iran’s nuclear program by mentioning that the IAEA has been able to verify the non-diversion of declared  nuclear material, implement full safeguards at Natanz, and perform 21 unannounced inspections at Natanz, but Iran continues to refuse design information verification (DIV) access to the IR-40 and design information for the reactor to be built at Darkhovin. France also noted the problems in the past that Iran created over the designation of inspectors and issuing visas. France recalled the IAEA’s Legal Office opinion, provided during the March Board meeting, that Iran’s refusal to implement Code 3.1 Modified and allow IAEA access to the IR-40 reactor was inconsistent with Tehran’s safeguards obligations. The U.S. noted that we should inquire with Heinonen as to the point at which failure to provide DIV access was imperiling safeguards integrity.  

¶18. (C) Describing additional concerns about the IAEA’s  ability to verify/investigate Iran’s nuclear program, France  stated that there were less than a dozen inspectors in Ops B,  there continues to be a rapid turnover of IAEA officials  associated with the Iranian nuclear account, and the IAEA’s  “Iranian” expertise is tenuous, citing the retirement of the  IAEA’s centrifuge expert last summer. Germany agreed that  there were a lot of issues with Iran’s cooperation, but the  biggest problem most likely was the non-implementation of the  AP, especially if there was an undeclared facility somewhere  in Iran. France reiterated the importance of Code 3.1  Modified, and commented that we should focus on the issue of  prompting Iranian implementation of its related obligations.   

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U.K.’s Summary of Discussions 
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¶19. (C) The U.K. Ambassador summarized the main points from the meeting, stating clearly these were not “official, agreed to positions,” but just general conclusions from the Chair’s perspective. (Note: China and Russia came to the meeting in the understanding that ground rules from the previous meetings would obtain, ground rules which preclude any formal agreement on shared conclusions. End note.) The main points were:   
--Iran’s centrifuge operations in 2008 had improved from 2007, but the centrifuge performance still was relatively poor and not at a steady state;   
--the performance of Iran’s centrifuge operations was not adequate to achieve Tehran’s stated commercial goals;   
--delays in centrifuge cascade commissioning may have more to do with centrifuge operators attempting to address performance problems than any political signal from Tehran to the international community;  --there has been a complete lack of progress on PMD and the IAEA has been unable to report any developments on these issues;   --the P5 1 shared the concern that the outstanding issues have not been adequately addressed by Iran, and Tehran must provide the IAEA access to individuals, documentation, and locations associated with PMD; and   --the P5 1 will continue to support the IAEA on the Iranian nuclear issue.    ------------------------- 
Session with DDG Heinonen 
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¶20. (C) As requested, Heinonen and IAEA weapons expert XXXXXXXXXXXX joined the meeting before it concluded. After a brief summary of the agenda, the U.K. Chair posed several questions, Heinonen responded and subsequently answered additional questions from the experts.  Heinonen explained that the IAEA does not have much access to the actual centrifuges at Natanz (as they are inside casings), but said the installation of the IR-1 has been linear, although the commissioning--feeding with UF6--has not. Heinonen said the believed the installation of the additional IR-1’s suggests that Iran has faith in its ability to operate  those machines, but he said he would not add to the speculation as to why the Iranians have not yet fed UF6 into them. Heinonen described the low enriched UF6 reporting discrepancy at the physical inventory verification (PIV) in November 2008 as an Iranian operator calculation error. He said the IAEA is conducting a systematic internal review of the matter and also continues to work closely with Iran to assess the causes of this error and help change practices in the future so that it does not happen again.  

¶21. (C) Regarding the question of providing copies of “alleged studies” documents to Iran, Heinonen explained in detail that the IAEA has been seeking answers from Tehran on these issues since 2005 and that Iran has been given repeated, ample access to the information, but still claims only that they are “forgeries.” Noting specifically the IAEA’s attempts to investigate possible military-related procurements, Heinonen described the process by which some questions in the IAEA work plan for Iran were kicked back to the final “alleged studies” basket of issues because Iran would not deal with them under other, earlier issues. He also said the work plan stated that “access,” not copies or originals, to the documentation would be provided to Iran. Tehran, however, has tried to change the “rules of the game” over time and started to focus on a call to receive “originals” only in September 2008. Heinonen mentioned that he does not foresee any progress on these issues in the near term, especially without AP access and the implementation of Code 3.1 Modified. 
 
¶22. (C) Responding to a question from the French about visas and the designation of inspectors for Iran, Heinonen said the IAEA currently had available the personnel it needs to work in Iran, but a problem could arise if the IAEA and Iran were to hold technical discussions requiring experts/consultants who are not designated inspectors, for example,  XXXXXXXXXXXX. The U.K. asked what Iran’s long-term plans were for the installation and operation of the new generation centrifuges at Natanz. Heinonen replied that he thinks Iran has realized the IR-1 is not the most dependable machine and he would be surprised if Iran installed 54,000 IR-1s in the FEP at Natanz. He speculated that maybe the fourth unit of 3,000 machines at the FEP would consist of a more advanced centrifuge. 
 
¶23. (C) Germany asked if the LEU produced at Natanz was for Bushehr fuel and if Iran could enrich uranium beyond 3.5 percent. Heinonen said the safeguards agreement for Natanz allows up to 5 percent enrichment. Iran could choose to increase that level, but it would have to notify the IAEA. The U.S. asked if the safeguards approach for Natanz would change as the number of centrifuges or assay were to increase, and Heinonen responded that the camera positions would have to be rearranged and the frequency of unannounced inspections increased. In response to a query from the U.K., Heinonen specified that safeguards cameras at Natanz cover the perimeter of the cascade halls, focusing on input/output points. He also noted that, unlike such inspections under the IAEA’s “Hexapartite” approach to safeguards at enrichment plants, inspectors at Natanz can go “anywhere underground” they like, i.e., there is no set course inspectors must follow during unannounced inspections. Heinonen said this combined monitoring assures that Iran cannot take machines in and out of the cascades without the IAEA knowing. 
 
¶24. (C) Responding to the U.S. question about the source of the uranium dioxide (UO2) that Iran is using to produce fuel rods at the FMP, Heinonen said he thought the UO2 was being produced at the UCF, although he was not 100 percent sure. He also said that Iran has a stock of UO2 that it acquired from abroad in the early 1990s. XXXXXXXXXXXX
 
¶25. (C) The U.S. commented about the difference between a State’s legal obligations under the comprehensive safeguards  agreement and transparency measures, and how Syria now seems to be taking cues from Iran’s behavior. Is there really a clean break between obligations and “transparency?” Heinonen said he did not think it was a clean break and that it was difficult to make the exact determination of where voluntary transparency begins. The U.K. asked if the Board could assist the IAEA Secretariat in this area, and Heinonen recalled a 1992 discussion on the strengthening of safeguards as well as States implementing the AP. 
 
¶26. (C) China noted that the assessed SWU for Iran’s operations of the IR-1 centrifuge in 2008 was 0.6 and asked if this low number was because of the poor design of the centrifuge. Heinonen said, “I wish I knew.” The U.S. asked if Iran’s DIV refusal for the IR-40 was an immediate concern and what Iran planned to do with the spent fuel from that reactor. Heinonen said he has no information on spent fuel plans for the IR-40 and that currently the main concern for DIV access is for UNSC reporting responsibilities, since Iran is at least 4-5 years away from operating the reactor. Heinonen then emphasized that safeguards concerns will grow over time and “we shouldn’t tolerate this Iranian behavior too long.” Germany asked about the status of the Heavy Water Production Plant (HWPP), which will support the IR-40 reactor, and Heinonen said the IAEA was as “equally blind” about the operational status of the HWPP, but he did not think Iran currently was producing high quality heavy water. 
 
¶27. (C) Responding to Germany’s question about the status of the uranium metal production line at the UCF, Heinonen explained that Iran has yet to test that process at the UCF, although all the equipment is installed. Heinonen also stated that Iran could not produce HEU metal at the UCF with the current set-up and safeguards, as different equipment would be required to make HEU metal. France asked why the uranium metal document is under seal in Iran and not in Vienna. Heinonen replied that the IAEA has asked to move the document to Vienna, but Iran has yet to turn the document over to the IAEA. The U.K. asked about Iran’s time scale for converting the low enriched UF6 into UO2--for reactor fuel--at the UCF. Heinonen said that there was little work left for Iran to complete on that process, but all low enriched UF6 remains at Natanz. XXXXXXXXXXXX 
 
¶28. (C) China inquired about how many centrifuge components and raw material for component manufacturing Iran currently has. Heinonen explained the IAEA’s knowledge regarding Iran’s component manufacturing and materials capabilities had diminished since the suspension agreement and AP were no longer in place. He said that before the IAEA lost access in 2007, Iran had enough components for approximately 10,000 IR-1 centrifuges. He remarked that during his January 2008 visit to Kalaye Electric, he discovered that Iran was actively reverse engineering components for more advance centrifuges. Also at that time Atomic Energy Organization of Iran (AEOI) head Aqazadeh claimed that Iran was self-sufficient in making the high-strength aluminum alloy, maraging steel and magnets it needs for centrifuges. Heinonen commented that he did not think the maraging steel the IAEA had previously seen in Iran was appropriate for use in producing IR-2 centrifuges. He also noted that Iran would need a source of carbon fiber to build composite centrifuges and he had no idea where that carbon fiber would come from. He described maraging steel and carbon fiber as possible “bottlenecks” in the Iranian centrifuge program. Heinonen further stated that he believes that the Iranians have come to realize that the IR-1 is not the “ultimate solution” and he believes that the “IR-2 is the future”. He also noted that the IR-2 and the IR-3 have approximately the same  dimensions but are constructed of different materials. He stated that the IR-2 and the IR-3 appear to be subcritical machines and approximately half the height of the P-2, but the same diameter. He further believes one to be maraging steel and the other to involve carbon composite.  
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Comment 
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¶29. (C) The U.S. delegation believed this meeting worthwhile as a means for engaging Russian and Chinese experts on the technical facts of the Iranian nuclear program, facts that we hope will be accurately reported to more senior officials in Moscow and Beijing. Specifically, the meeting again provided a relatively depoliticized forum for experts to hear the details regarding IAEA interactions with Iran. Perhaps most valuable on this from was Heinonen’s clear statement that Iran already has the option for all the “access” it needs to PMD documents and “we shouldn’t tolerate this Iranian behavior too long” with regard to Tehran’s continued refusal allow DIV access to the IR-40. We note that Chinese participation was more robust than in the previous two such experts meetings, and that China’s questions focused heavily on better understanding the level of Iran’s centrifuge prowess. Members of the U.S. delegation engaged the Chinese Mission and CAEC representatives in an extended discussion on this issue over the lunch break. These expert meetings have evolved into a relatively comfortable mechanism for discussing technical issues on Iran at the expert level, and convening them is also a useful optic for the IAEA Secretariat to witness. 

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