IJ l A LA ll'll JJ Authority • Nut ¼ t J ------ Office of the UNDER SECRETARY OF STATE FOR POLITICAL AFFAIRS WASHINGTON ' SECRET RESTRICTED ul TO T - Mrs Benson S AS - Ambassador Smith OES - Mr Pickering AF - Mr Moose EUR - Mr Vest NEA - Mr Saunders 7 17 1979 Regarding the attached sensitive INR report on uranium from Niger for Libya and Pakistan Mr Newsom would appreciate your comments regarding any diplomatic action we might be able to take to bring this matter to the attention of the Government of Niger which appears to have a reasonably responsible general attitude on this subject He also suggests you might wish to consider adding this subject to the list of tasks in the July S AS memorandum to the Interagency Working Group on the South Asia nuclear problem Roscoe s Suddarth Executive Assistant Attachment cc INR Memo of 7 16 79 INR - Mr Bowdler SECRET RESTRICTED RDS 2 3 4 7 17 79 I DECLASS11'1 l 1J Authority • t hJl dp'i 17 --r DEPARTMENT OF STAH '- 1 · T H E O I R E CT O R O F I N T E I L I G le N C - A N D f• E S EA r C tt WA - 1 I Nr lf • SECRET NODIS NOFORN NOCONTRACT ORCON TO P - Mr Newsom FROM INR - David E Mark July 16 1979 Acting f r •• Nigerien Uranium for Libya and Pakistan In response to your recent request we submit the following information on a Niger's uranium industry and b Niger's sales of uranium to Pakistan and Libya Niger's uranium mines are owned and operated by multinational consortia but there is substantial participation by the host country US firms are involved in development of uranium extraction projects that will come on line in the early 1980s but no US company is involved in extraction and disposition of any uranium now produced in Niger Information on shipments of uranium from Niger to Libya and Pakistan is fragmentury and at times contradictory We have good evidence that Libya has served as a way-station for air shipment of uranium from Niger to Pakistan but we cannot confirm that Libya has also acted as a cover for uranium procurement for Pakistan Despite assertions in the open press and in intelligence reports shared with us by India and Israel we do not think that close cooperation in the nuclear field has developed between Pakistan and Libya Although on the surface there is a show of excellent relations between Pakistan and Libya a certain basic distrust between the two countries argues against nuclear cooperation Libya may be stockpiling uranium from Niger for its own purposes rather than shipping significant quantities to Pakistan SECRET NODIS NOFORN NOCONTRACT ORCON RDS 2 3 4 7 12 09 Multiple sources DECLA8SIFIED I I Authority N@ dlt I 7_ SECRET NODIS NOFORN NOCONTRAC'l' ORCON -2- Niger's Uranium Industry In the early 1970s France dominated Niger's uranium mining industry Niger's national mining concern ONAREM had only an 8 percent interest in the four-nation SOMAIR consortium Niger France West Germany and Italy By now however Niger has increased its ownership to 33 percent of SOMAIR and 31 percent of COMINAK another four-nation consortium representing Niger France Japan and Spain In addition to profits from the steadily increasing consortia sales Niger has since 1977 received a portion of domestic uranium production to sell on the world market The size of this allotment is not known but i t is thought to be smaller than Niger's ownership share in the consortia In 1978 Niger produced 2 060 metric tons of uraniwn valued at $214 million--the fifth largest production in the Western world Production this year is expected to reach 2 800 metric tons and by 1984 8 400 metric tons Niger will then be the Western world's third largest uranium producer and will supply 50 percent of the uranium used by the European Community Niger's first uranium mine Arlit is its most important source of export revenue Opened in 1971 by SOMAIR Arlit has steadily increased its production from 410 metric tons in 197 1 to 1 800 metric tons in 1978 Niger's second mine Akouta is operated by COMINAK Production at this mine which opened in 1978 is expected to reach 1 750 tons in 1979 A third mine Arni operated by COGEMA F'rance and ONAREM is under construction and should begin producing in late 1981 Uranium Sales to Pakistan In January 1977 Pakistan requested IAEA approval of unilateral submission-type safeguards on yellowcake which it planned to purchase from Niger Niger had insisted on the application of safeguards as a condition of the sale as i t claims i t does with all prospective buyers The IAEA was given to believe at the time that the uranium was intended for fabrication of fuel for the nuclear power reactor at Karachi possibly by a third country SECRET NODIS NOFORN NOCONTRACT ORCON CLA5S1FJED ' Autnomy N S0 4 1 - - -- V r SECRET NODIS NOFORN NOCONTRACT ORCON -3The IAEA gave its approval the next month The agreement included a no-explosive-use clause and a requirement that Pakistan notify the IAEA of the arrival of more than one metric ton of uranium in Pakistan within two weeks of its arrival if less than one metric ton was involved within three weeks Independent notification by Niger of the export of uranium or by the country fabricating fuel for Pakistan was not mandatory The total amount of uranium to be covered by safeguards was not mentioned Published records indicate that in 1977 Niger sold its portion of domestic uranium production to Belgium and Pakistan According to information provided to the US confidentially by French officials this June 50 metric tons of safeguarded uranium believed to be in concentrate form were shipped to Pakistan in 1977 SO in June 1978 and 10 in March 1979 In addition unsafeguarded uranium reportedly was shipped to Pakistan byair through Libya under Pakistani guard--15 metric tons in 1978 150 in January 1979 and 150 in March 1979 It is unclear whether the 300 tons of unsafeguarded uranium allegedly shipped to Pakistan in 1979 were entered into the national uranium accounting system of Niger If so they would comprise approximately 10 percent of Niger's production projected for this year Although the IAEA last May apparently inspected in Pakistan a quantity of Niger-supplied uranium we do not know how much this represents of the total which Pakistan imported Nor do we know whether the uranium was discovered by accident by the IAEA during a routine inspection of the Karachi power reactor or was inspected as a result of Pakistan's having notified the IAEA of receipt of the uranium as provided by their agreement We also do not know whether the IAEA has inspected previous shipments of Niger's uranium Uranium Sales to Libya According to clandestine reporting Niger refused to sell uranium to Libya in 1977 In mid-1978 however when Libya again raised the subject Niger reportedly decided to sell Libya some uranium if Libya would stop its intrigues in regard to migrant workers and nomads from Niger Libya reportedly purchased 258 metric tons in 1978 claiming that the uranium was intended solely for a nuclear power project within Libya The purchase was covered by a supply agreement which called for the application of IAEA safeguards as we l as SECRET NODIS NOFORN NOCONTRACT ORCON DECLAtiSIFIEU Authority N Cev 't l 7 •y SECRET NODIS NOFORN NOCONTRACT ORCON -4an agreement not to transfer tl1e uranium to a third country without the consent of the Niger C overnment Niger delivered 100 metric tons to Libya late in 1978 but after indications early this year that Libya had not complied with the safeguards suspended shipment of the remaining 158 tons Although Niger officials suggested that the USSR would ultimately enrich the material to be used in Soviet-built power reactors in Libya our Mission to the IAEA believes that Libya has no requirement for Niger's uranium for itself since the Soviets have in the past provided uranium fuel on a lease basis to their customers Thus the Mission infers that Libya has contracted for the uranium for other purposes Pakistan however as noted above has procured unsafeguarded uranium from Niger on its own according to the French Thus it seems unlikely that the Libyans are buying uranium for use by the Pakistanis Underlying political problems seem to preclude real cooperation between Pakistan and Libya on anything as sensitive as a nuclear weapons project Although continuing high levels of military cooperation give a healthy appearance to bilateral relations there are limits Qadhafi continues to demand an unrestricted utilization of Pakistani military personnel something Islamabad is unwilling to allow as it fears involvement in Arab internecine warfare Pakistani leaders also believe that the Libyan Government has a welldeserved reputation for unrealiability especially regarding financial promises Libya's failure to pay Pakistani seconded military personnel on time and its tendency to attach strings to its aid projects many of which fail to materialize will continue to reinforce that attitude For his part Qadhafi has undoubtedly been angered by Pakistan's execution of former Prime Minister Bhutto for whom he had made several personal pleas The Libyans are also unhappy that Pakistan failed to sever relations with Egypt after the Middle East Peace Treaty Drafted INR STA CCohen JSiegel INR RNA PGriffin x20222 Cleared INRSTA RCowey INR DDR MPackman x22402 SECRET NODIS NOFORN NOCONTRACT ORCON