The IAEA Board of Governors today approved an agreement with Kazakhstan to establish and operate in Kazakhstan the IAEA Low Enriched Uranium (LEU) Bank, which will host a reserve of LEU as an assurance of supply mechanism for Member States in case they cannot obtain LEU on the global commercial market, through State-to-State arrangements, or through any other means. LEU is used to make the fuel that powers most nuclear reactors around the world. The IAEA Board also approved a transit agreement with the Russian Federation for the transport of the IAEA LEU through its territory to and from the IAEA LEU Bank.
“The conclusion of the two agreements, with today’s approval by the Board of Governors, represents a significant milestone for this important project, enabling us to proceed to full-scale implementation,” said IAEA Director General Yukiya Amano.
Hosting the IAEA LEU Bank
The IAEA Board of Governors authorized the establishment and operation of the IAEA LEU Bank on 3 December 2010. On 29 July 2011, Kazakhstan offered to host the IAEA LEU Bank in response to the Agency’s request for Expressions of Interest. Since 2011, Kazakhstan and the IAEA have been working on the technical details for the establishment of the IAEA LEU Bank and have negotiated the Host State Agreement governing the establishment and hosting of the Bank.
The IAEA LEU Bank will be owned and controlled by the IAEA but operated by Kazakhstan. Safety and security of the IAEA LEU Bank will be governed by Kazakhstan’s legal and regulatory requirements, and will meet the applicable provisions of the IAEA’s safety standards and security guidance documents. The LEU will also be subject to IAEA safeguards.
The IAEA LEU Bank will be a physical reserve of up to 90 metric tons of LEU, sufficient to run a 1,000 MWe light-water reactor. Such a reactor can power a large city for three years. The IAEA LEU Bank will be located at the Ulba Metallurgical Plant in Oskemen in northeastern Kazakhstan. The Ulba plant has been handling and storing nuclear material, including LEU, safely and securely for more than 60 years.
The IAEA LEU Bank is fully funded by voluntary contributions, and has no impact on the IAEA’s Regular Budget or other activities. Donors have provided approximately US$150 million to establish and operate the IAEA LEU Bank for at least 10 years.
Assurances of supply
Assurances of supply can provide Member States with additional confidence in their ability to obtain nuclear fuel in an assured and predictable manner, in particular in the event there is some unforeseen disruption in existing fuel supply arrangements. Once established, the IAEA LEU Bank will provide such an assurance of supply.
A key principle of the IAEA LEU Bank, as an assurance of supply mechanism of last resort, is that it must not distort the commercial market. Its existence also does not affect the rights of IAEA Member States to develop their own nuclear fuel cycle facilities. Member States who need to purchase LEU from the IAEA LEU Bank need, among other eligibility criteria, to have in force a Comprehensive Safeguards Agreement with the IAEA and to also be in compliance with it.
The IAEA LEU Bank is part of global efforts to create an assured supply of nuclear fuel to countries in case of disruptions of the open market or of other existing supply arrangements for LEU. Other assurance of supply mechanisms established with IAEA approval include a guaranteed physical reserve of LEU maintained by the Russian Federation at the International Uranium Enrichment Centre in Angarsk, Russian Federation, and a UK assurance of supply guaranty for supplies of LEU enrichment services. The United States also operates its own LEU reserve.