Mongolia Balances Public Opinion With Nuclear Ambitions

http://www.worldpoliticsreview.com/articles/8921/mongolia-balances-public-opinion-with-nuclear-ambitions
By Jonathan Berkshire Miller | 23 May 2011

In recent months, news outlets in Japan and the U.S. have reported that Mongolia is negotiating with those two countries to serve as a regional depository for spent nuclear fuel. The proposed plan would permit geographically constrained countries in the region, such as Japan, South Korea and Taiwan, to dispose of their spent fuel in the spacious Central Asian state.


The veracity of the reporting on the negotiations is still unknown. When the story first broke in March, the Mongolian Foreign Ministry was quick to dismiss the notion that Mongolia would host Asia's nuclear waste. The statement went on to declare that Mongolia's constitution prohibits the "import of dangerous waste to Mongolian territory." As noted last month, Mongolia has good reason to take such a stance, especially in light of the nuclear shadow cast by the recent events in Fukushima, Japan. Whether the government's position is cosmetic or genuine has yet to be comprehensively determined.

Last week, only a month after the depository claims were dismissed by Mongolian officials, the Mainichi Daily News, a Japanese newspaper, reported that the “secret deal” was advancing between the U.S. Department of Energy and the Mongolian government. The discussions highlight a larger struggle over global nuclear market share, with the U.S. and Japan positioned against industry rivals Russia and France. Russia’s state-owned nuclear-energy corporation Rosatom continues to serve as a potent competitor in Mongolia to the U.S.-Japan nuclear alliance. Russia has the advantage of having established a historical record with Mongolia on nuclear energy matters, including a legally binding partnership and significant economic investment. France is a relatively new player in Mongolia’s nuclear industry, but its multinational nuclear corporation Areva has plenty of resources and expertise as well as global reach.

Japan and the U.S. are reportedly seeking to present Mongolia with a “package deal” that would provide the country with its first nuclear reactor in exchange for also hosting spent nuclear fuel from the region. Negotiations have most likely been going on for some time now, but Fukushima has muddied the waters for Mongolia, which is seeking to defuse popular discontent with the idea of building what would be the country’s first nuclear reactor.

While the three parties may have been close to a deal before the March 11 earthquake in Japan, currently there seems to be little appetite in Mongolia for a nuclear agreement. In response to the most recent reporting, the Mongolian Embassy in Vienna — and Mongolia’s Permanent Mission to the International Atomic Energy Agency (IAEA) — restated that “there have not been any talks with foreign organizations or individuals on the issue of accepting nuclear waste of other countries since there are no legal grounds for such talks.”

The Mongolian statement did qualify its dismissal, however, by noting that Ulan Bator has been in discussion with countries interested in “the exploitation of uranium.” According to the IAEA, Mongolia has more than 1.5 million tons of uranium deposits, which it is eager to profit from with the help of foreign investors. It seems that the Mongolian government is being forced to walk a tightrope by trumpeting its sovereignty and laws on one hand while tacitly acknowledging its desire to exploit its uranium reserves on the other.

American officials have thus far not verified that negotiations are ongoing either. The U.S. Embassy in Japan released a statement immediately after the Mainichi report went to press declaring that there were “a number of inaccuracies in the stories being reported today in Japanese newspapers about a spent nuclear fuel facility in Mongolia.” The statement continued by noting that “the U.S. government is not negotiating a deal to send spent nuclear fuel to Mongolia” and “fully respects that it is the sovereign decision of any government whether and under what terms they participate in nuclear energy activities, including nuclear fuel leasing.” Despite this, the U.S. statement can be read more as a criticism of the story than a blanket denial of the proposed deal.

The reaction in Japan has not been so dismissive. A senior Japanese official from the Foreign Ministry confirmed “there have in fact been informal talks with both the United States and Mongolia on the issue.” It is possible that the Mainichi report was the result of a leak from the Japanese government, which has a significant corporate interest in exporting its nuclear expertise. Japan has one of the largest nuclear industries in the world and produces an incredible amount of spent fuel annually. It is having an increasingly difficult time storing this waste domestically and would welcome such a partnership with a nearby country. Moreover, huge Japanese corporations such as Toshiba and Hitachi are hoping to capitalize on any “package deal” with Mongolia by potentially helping to build nuclear reactors.

While Mongolia continues to release enigmatic statements on its nuclear future, internally it continues to strategize how best to take advantage of its uranium resources. As talks with Japan and the U.S. continue to evolve, expect further seemingly contradictory stories to surface for two reasons. First, the Mongolian government needs to approach the idea of housing spent nuclear fuel carefully due to public opinion after Fukushima. Second — and more importantly — as Mongolia continues its negotiations, it will use the presence of other potential investors such as France and Russia as a hedge in order to secure the best possible deal from the U.S. and Japan.

Jonathan Berkshire Miller is an analyst on the Asia-Pacific region with the Canadian government and has considerable research and policy experience in issues relating to nuclear nonproliferation, arms control, counterterrorism and intelligence. He is also a regular contributor to the Diplomat on Asia-Pacific security issues. The views expressed above are strictly his own and in no way represent the government of Canada.