Japanese-Kazakh ties go nuclear
By Roman Muzalevsky
Japan, the world's third-largest producer of nuclear energy after the United
States and France, plans to launch a feasibility study this month to explore
the possibility of importing uranium from Kazakhstan through Russia's far east.
Sumimoto Corp, a Japanese nuclear energy company, claims the move will
substantially cut transportation costs as Kazakh uranium at present goes to St
Petersburg and then on to France, the US and Canada for enrichment before
reaching Japan.
Japan's Trade Ministry will finance the six-month study, which envisions the
delivery of Kazakh uranium through the trans-Siberian transportation network to
Russia's Angarsk for
enrichment and subsequent transit to Japan via the sea port at Vladivostok. If
realized, the related agreements might also enable Japan to further reduce its
dependence on oil from the Middle East and its 50% dependence on the uranium
imports from Canada and Australia. Kazakhstan will also benefit as it will free
up its existing export routes to the West through St Petersburg, while reducing
the transit time for its uranium exports to Asia.
Russia planned establishing a logistics center in the far east to meet the
rapidly growing needs of Asian economies, and cooperated with Kazakhstan
through transportation-enrichment swap schemes to reduce transit costs, cutting
delivery times from 100 to 25 days in some instances. Russia also has 45% of
the world's enrichment capacity, while Kazakhstan has huge export potential.
This makes Japan's feasibility study a relevant undertaking.
The study comes at a time of rising global demand for uranium. There are
already 53 nuclear power plants being constructed around the world, with about
500 more planned by 2030. Kazakhstan, therefore, would benefit from the
possible transit and enrichment agreements ensuing from the feasibility study.
Kazakhstan's estimated uranium resources, the second-largest in the world,
constitute 19% of global reserves.
In 2009, Kazakhstan became the world's largest producer of uranium,
outperforming Canada and Australia. It has pursued export agreements with
Japan, India, China, the United States, South Korea, Canada, France and Russia,
seeking to produce as much as 18,000 tonnes this year alone. "Kazakhstan has
been an engine of global uranium production in the last five years," according
to Jim Lennon, an analyst in the Macquarie Group.
However, Mazhit Sharipov, the head of Kazakhstan's Atomic Energy Agency and
Industry, treats the country's successes with caution: "Under intensive
extraction we can deplete uranium resources within 70-80 years. Considering
that nuclear power is the power industry of the future we should approach this
issue very carefully."
Japan appears well placed to boost Kazakhstan's export, enrichment and
technological capacity, while expanding its status beyond that of a mere
supplier of raw materials. "We have uranium, you have high technologies,"
Nazarbaev famously stated during his June 2008 visit to Tokyo, where he
concluded an agreement to strengthen nuclear energy cooperation. The
state-owned Kazatomprom has managed to acquire a 10% share of Westinghouse
Electric, one of the world's largest suppliers of nuclear power reactors, from
Toshiba.
Kazakhstan now plans to obtain a 40% share of Japan's uranium market, for which
the proposed feasibility study may conceal lucrative prospects; 2009 estimates
suggest that 41% of Japan's electricity production will come from nuclear
energy by 2017. Japan operates 55 nuclear power reactors and intends to build
11 more.
Consequently, Japan and Kazakhstan have worked to ensure that nuclear energy
cooperation continues to produce practical results. Thus, in 2007 Japanese
Kansai Electric Power Co, Sumitomo Corp, Nuclear Fuel Industries Ltd and
Kazatomprom signed nuclear fuel production agreements, while in 2008 Toshiba
agreed to assist Kazakhstan in constructing nuclear power reactors, processing
uranium fuel and building light-water reactors.
Kazatomprom and Marubeni, Tokyo Electric Power, Chubu Electric Power and Tohoku
Electric Power also contracted to develop Kharasan-1 and Kharasan-2 uranium
deposits in Kazakhstan, planning to produce 160,000 tonnes of uranium by 2050.
The deal will enable Japan to import 2,000 tonnes annually and cover 25% of its
annual fuel needs for nuclear stations.
Sumitomo, Kepko and Kazatomprom, which develop the Zapadny Munkuduk uranium
deposit in Kazakhstan, plan to produce 1,000 tonnes of uranium annually
starting this year, enabling Japan to meet 10% of its annual uranium needs.
Bilateral discussions are examining the possible construction of a second
nuclear power station in Kazakhstan.
Japan's cooperation with Kazakhstan has proceeded in the framework of several
overarching initiatives towards Central Asia such as "Eurasian Diplomacy",
"Silk Road", and "Central Asia plus Japan", which have sought to promote
economic development and stability in the region. As this cooperation expands,
particularly in the nuclear energy field, Japan and Kazakhstan will find it
beneficial to collaborate in preventing nuclear proliferation in Central Asia.
Earlier this year, Astana and Tokyo signed a treaty on cooperation in the area
of peaceful nuclear energy use, taking an important step in preventing nuclear
proliferation.
Japan's active involvement in Kazakhstan's uranium sector provides a platform
for the possible transit and enrichment plans involving Russia, Japan and
Kazakhstan. With rising global demand for uranium as a key element in nuclear
energy production, Tokyo and Astana both stand to gain from their nuclear
energy cooperation. Japan is a resource-scarce country with a high-technology
capacity, aiming to secure energy markets as the economies of China and India
grow rapidly.
Kazakhstan, in turn, is a resource-rich country interested in boosting its
uranium exports and acquiring technological capabilities that will promote its
economic modernization plans and enhance its role in regional and global
affairs. Nuclear energy cooperation between Astana and Tokyo appears to be a
forward-looking partnership.
Roman Muzalevsky is an international affairs and security analyst on the
Caucasus and Central Asia. He is also program manager at the Central
Asia-Caucasus Institute.
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