On October 5, 2006, Ukrainian Minister of Fuel and Energy Yuri Boiko announced that Ukraine planned to develop the entire cycle for the production of low-enriched uranium fuel for its nuclear power reactors, except for the enrichment of uranium. Although he provided few details, it appears that Ukraine will mine and concentrate (mill) uranium ore and ship it abroad to be enriched in Russia or Western Europe, possibly also converting it, before shipping, to the gaseous form of uranium used in the enrichment process. Thereafter, the enriched uranium will be returned to Ukraine, where it will be fabricated into the zirconium alloy-clad fuel rods that are placed in nuclear power plants. The finishing touches are being put on the new organization that will be in charge of fuel production, UkrAtomProm. [1]

Boiko’s announcement marks an important stage in the implementation of plans outlined earlier in 2006 for Ukraine to reduce its dependence on Russia, which now provides 100 percent Ukraine’s reactor fuel requirements. By shifting some elements of fuel production to indigenous processors and manufacturers, Ukraine stands to create jobs and reduce the cost of the fuel it uses – an important gain in the view of recent worldwide price increases – while enriching even part of Ukraine’s uranium in Western Europe would reduce dependence on Russia as a source of this essential service. “This is the only option that will ensure reliable financing for the technical re-equipping of the sector,” Boiko noted. [2]

Ukraine’s earlier announcement regarding nuclear fuel production generated considerable controversy in early 2006, when the Ukrainian government disclosed that its plan for creating the full nuclear fuel cycle, included the development of a facility to enrich uranium. (See “Ukraine Considers Uranium Enrichment,” in the March 2006 issue of WMD Insights). This would have run counter to an initiative announced by the United States in February 2004, seeking to limit the spread of enrichment facilities to those states already possessing them. [3] Uranium enrichment can be used not only to produce low-enriched uranium for nuclear power plant fuel, but also highly enriched uranium potentially usable for nuclear weapons. After the United States voiced opposition to these plans, Ukraine backed away from the original concept, but Prime Minister Yuri Yekhanurov announced in February 2006 that while his country would forego enrichment activities, it would continue to pursue the development of other elements of the nuclear industry. As part of this initiative, he announced the plan to create UkrAtomProm by October 1, 2006, an organization charged with nuclear fuel production. [4] As now envisioned, UkrAtomProm will include the Skhidniy Mining and Conversion Plant; the Prydniprovskiy Chemical Plant, an enterprise engaged in zirconium production; and two research institutes.

Boiko disclosed on October 6 that the cost of the fuel production project is estimated at 13.351 billion hryvnas (about $2.77 billion), but to date, allocations in the Ukrainian federal budget have fallen short. The coming year's budget, for example, provides only 120 million ($25 million) of the projected 300 million hryvnas ($62.3 million) needed in 2007. In that period, UrkAtomProm had expected to begin reconstruction of the uranium mining combine and to launch a new combine to begin mining at the previously untapped Novokonstantinovski ore deposits.

Boiko’s announcement demonstrates that the fuel production plan is apparently well underway. In a separate, but related development, at the end of September 2006, Boiko and the head of the Russian Federal Agency on Nuclear Energy (RosAtom) Sergey Kiriyenko agreed to create a working group on cooperation and integration of the two countries’ nuclear industries. That group will be chaired by Yuri Nedashkovski, President of EnergoAtom company (the Ukrainian entity in charge of operating the country’s nuclear power plants) and Ivan Kamenskikh, the deputy chief of RosAtom. News reports indicated that Russia apparently sees Ukraine as a potential source of fuel fabrication services for its own nuclear power plants, whose number is set to expand rapidly in coming years. [5] This suggests that that Boiko’s reference to Russia serving as a possible source of uranium enrichment services for Ukrainian nuclear fuel may have been based on earlier discussions with his Russian counterparts.

Several news media accounts appeared to contradict the Ukrainian officials’ statements concerning the decision not to pursue uranium enrichment, reporting that the government program still includes constructing a uranium enrichment facility. The reports claim that UkrAtomProm will choose the technology as early as this year and will hold a tender on the design of the facility in 2007; by 2008, they declare, the Verkhovna Rada (the Ukrainian parliament) will be presented with a draft law on the location of the future facility and various aspects of how it will function. The completion of the construction is reportedly scheduled for 2014. [6]

It is unclear how these media reports square with the straightforward official statements by Boiko and the earlier disclaimer by then-Prime Minister Yekhanurov in February 2004 that Ukraine would not pursue uranium enrichment. [7] It is possible that the news source confused uranium enrichment with the concentration of uranium ore or the fabrication of fuel made from uranium previously enriched outside Ukraine.

Nikolai Sokov – Monterey Institute Center for Nonproliferation Studies