By Fredrik Dahl
VIENNA (Reuters) - A plan partly funded by Warren Buffett to set up a U.N. nuclear fuel bank to help prevent the spread of atomic weapons could still be inaugurated by late 2014 despite slower-than-expected progress, according to one of its main backers.
Almost three years after member states of the U.N.'s International Atomic Energy Agency (IAEA) approved the U.S.-backed scheme to establish a reserve of low-enriched uranium (LEU), the IAEA has yet to conclude negotiations with Kazakhstan, the country that will host the fuel bank.
The LEU bank is partly funded by U.S. billionaire and philanthropist Buffett, whose $50 million donation through the non-governmental Nuclear Threat Initiative (NTI) was supplemented by the United States and other countries, bringing the total to more than $150 million.
Corey Hinderstein, an NTI vice president, said there were still some "uncertainties" around implementation, including how to define the relationship between the IAEA and Kazakhstan and the responsibilities of each party.
"Certainly there was an expectation that we might have been able to see more progress by now. I think it has been delayed as compared to expectation," Hinderstein told Reuters.
But she added: "I think both sides recognize that the process has been quite drawn out and want to see it come to successful conclusion."
A confidential IAEA report issued to member states in late August, obtained by Reuters, proposed "additional work" to carry out seismic assessments of the proposed site at the Ulba Metallurgical Plant in eastern Kazakhstan.
"A key issue remaining to be resolved between the agency and Kazakhstan relates to the legal status of the IAEA LEU Bank and the storage facility in which it is to be located," it said.
Under the plan, the IAEA would buy 60-80 metric tons of LEU for the reserve, which countries could turn to if their regular supplies were cut and buy the fuel there at the market price.
Hinderstein, who was a deputy director and senior analyst at the Institute for Science and International Security before joining NTI, said she was "optimistic that I will be able to see the cutting of the ribbon of the fuel bank by the end of 2014".
That would happen when all the legal and bureaucratic steps would have been taken so that procurement of uranium and equipment could get under way, she said.
A senior Kazakh official this month said he believed high-level IAEA-Kazakh meetings in August would help "resolve most of the issues ... on the implementation of the project in general".
Proponents of the plan say it could help meet demand from dozens of countries, some in the conflict-prone Middle East, for technical help in launching nuclear energy programs without increasing the risk of weapons proliferation.
The uranium needed to power reactors can also be enriched to high levels and provide material for bombs, making such fuel cycle technology especially sensitive. An LEU bank may discourage states from developing it themselves, advocates say.
Some developing nations are concerned it may limit their right to sovereign nuclear energy capabilities, even if Western diplomats have said this would not be the case. Some critics say it may also duplicate efforts of other fuel supply options.
Diplomats said Iran's protracted nuclear dispute with the West helped push the idea of the fuel bank up the agenda, even though Tehran insists on its right to refine uranium and says it will never cease the activity.
(Editing by Sonya Hepinstall)