US embassy cable - 04PRETORIA2956

C O N F I D E N T I A L SECTION 01 OF 07 PRETORIA 002956 
 
SIPDIS 
 
STATE FOR NP/NE, AF/S 
DOE FOR NE-2.4 AND NNSA/NA-241, NA-243 
 
E.O. 12958: DECL: 06/30/2014 
TAGS: ENRG, KNNP, TRGY, SF 
SUBJECT: SOUTH AFRICA: U.S. OFFICIAL VISIT PAVES THE WAY 
FOR CLOSER BILATERAL RELATIONS IN THE FIELD OF NUCLEAR 
ENERGY 
 
REF: PRETORIA 2927 
 
Classified By: Economic Minister Counselor J. Jeff Hartley, Reasons: E. 
O. 12958 1.5 (b) and (d) 
 
SUMMARY 
------- 
 
1. (C) Alex Burkart, Deputy Director in the Office of Nuclear 
Energy at the Department of State, and Ron Cherry, Director, 
Office of International Safeguards at the Department of 
Energy (DOE), visited South Africa May 17 to 21 to discuss 
advancing bilateral relations in the field of nuclear energy. 
 Burkart and Cherry participated in extensive meetings with 
key officials at the Departments of Foreign Affairs (DFA) and 
Minerals and Energy (DME), and with the management teams of 
the National Nuclear Regulator (NNR), the Nuclear Energy 
Corporation of South Africa (NECSA), PBMR Ltd. (developers of 
the Pebble Bed Modular Reactor (PBMR)), and ESKOM's nuclear 
power station at Koeberg.  There was firm agreement on both 
sides to establish a Joint Standing Committee on Nuclear 
Energy Cooperation (JSCNEC) and to finalize R&D agreements on 
nuclear energy cooperation and nuclear materials safeguard 
technologies.  The two sides are now considering December 1-3 
in Pretoria for the first JSCNEC meeting.  South African 
officials expressed strong interest in possible collaboration 
in a number of areas, including new technology to use low 
enriched uranium (LEU) targets instead of highly enriched 
uranium to produce Molybdenum-99, a medical radioisotope.  In 
general, the South Africans were more interested in 
collaborating on the energy than on the safeguards side, but 
clearly saw the need to collaborate on PBMR safeguards and on 
technical activities that would facilitate PBMR licensing in 
the United States.  A constant theme throughout the week was 
South Africa's need for skills development and capacity 
building.  Reftel provides an overview of visit and reports 
key policy developments.  This cable provides details of 
meetings for technical officials.   End Summary. 
 
OFFICIAL DISCUSSIONS 
-------------------- 
 
2. (C) Following a courtesy call with DME Deputy Director 
General Nelisiwe Magubane, who expressed full support for 
greater bilateral cooperation, Burkart and Cherry met with 
the entire staff of the Office of Nuclear Affairs in DME, 
including Chief Director Tseliso Maqubela, Director for 
Nuclear Energy Haresh Haricharun, Director for Safety Schalk 
de Waal, and Acting Director for Non-Proliferation Elsie 
Monale.  DFA Chief Director for Peace and Security Peter 
Goosen joined the second session in the afternoon.  The South 
Africans made it clear that they were interested in pursuing 
closer bilateral relations at the working or technical level. 
 Maqubela explained that the government had recently affirmed 
its decision to support the development of a Pebble Bed 
Modular Reactor (PBMR) as part of an overall strategy to 
provide a diverse and secure supply of inexpensive energy to 
the country.  Both he and Goosen stressed that such a 
strategy included making maximum use of the country's uranium 
resources. 
 
PBMR: A NATIONAL STRATEGIC PROJECT 
---------------------------------- 
 
3. (C) PBMR, NECSA, and ESKOM (the national electric utility) 
each told Burkart and Cherry that the government had recently 
declared PBMR a national strategic project and was in the 
midst of restructuring its shareholding in PBMR Ltd.  The 
plan was that "South Africa, Inc." would hold at least a 51 
percent share, with other investors taking the rest.  The 
Department of Trade and Industry (DTI) was about to assume 
the lead role for the government, with the Industrial 
Development Corporation (a government parastatal reporting to 
DTI) assuming the lion's share of equity.  ESKOM Enterprises 
has led with a 30 percent share of PBMR Ltd., but would 
transfer some of these holdings to the IDC, NECSA, and 
perhaps the rest to ESKOM Holdings, its parent company.  In 
the end, the government would pump another USD 100 million 
into PBMR Ltd. and DTI Director General Allister Ruiters 
would become the Chairman of the Board.  This structure would 
still allow for significant foreign investor participation, 
though the only current foreign shareholder is British 
Nuclear Fuels (BNFL).  Negotiations with AREVA continue, as 
do discussions with the Chinese on possible technological 
collaboration. 
 
ENRICHMENT AND NONPROLIFERATION 
------------------------------- 
 
4. (C) Maqubela made a point of saying that while fuel for 
PBMR would be imported in the short term, South Africa might 
want to establish an enrichment plant in the long term. 
Goosen made the specific point that South Africa already 
possessed enrichment technology and would oppose any idea in 
international circles that it be denied the opportunity to 
acquire technology needed in the future to enrich locally 
mined uranium ore for PBMR fuel.  Goosen was quite concerned 
that a ban or moratorium on enrichment technology might one 
day preclude South Africa from developing it's own technology 
to support PBMR.  On May 18, Burkart and Cherry met with 
Goosen for more than two hours to discuss this and other 
issues in greater detail.  Goosen clearly wanted to send a 
message to the United States that South Africa did not 
believe that a ban on the transfer of enrichment technology 
would solve enforcement problems surrounding 
nonproliferation, and that South Africa was willing to work 
with the United States on an alternative solution. 
 
5. (C) NECSA officials were a bit surprised at Goosen's 
position when asked about it the following day.  They 
informed Burkart and Cherry that NECSA no longer possessed 
working enrichment technology and that an enrichment plant to 
produce low enriched uranium was quite a ways off.  NECSA had 
no plans to get back into the uranium enrichment business 
since it was simply not cost effective to supply only a few 
nuclear power plants.  In fact, NECSA was awaiting a design 
license from NNR to build a smelter to destroy old equipment 
from its pre-1990's enrichment program.  Furthermore, NECSA 
ceased work on Molecular Laser Isotope Separation (MLIS) in 
1997 when COGEMA withdrew from cooperation; this work had 
been shelved for the next 20 years. 
 
6. (C) Director to the Nonproliferation Secretariat Daan van 
Beek joined the discussion with Goosen on May 18 to outline 
the structure and function of the Nonproliferation Council, 
and explain South African export and import controls on 
nuclear, chemical, and biological technology.  After giving 
some examples of South African enforcement in this area, 
Goosen made the point that South Africa greatly appreciated 
U.S. intelligence when it came to the enforcement of 
nonproliferation laws.  "We are not threatened or pressured 
by U.S. intelligence." he said, "Rather, we see it part of 
our enforcement system, as an asset."  He then emphasized 
that South Africa viewed nonproliferation as just one side of 
a two edged sword -- the other being disarmament, and 
ventured a short lecture on whether the United States could 
do more on both the nonproliferation and the disarmament 
sides.  He commented that the U.S. effort to avoid all 
reference to the conclusions of the 2000 Nonproliferation 
Treaty Review Conference (which he characterized as the 
"disarmament review conference") in documents from the recent 
Prepcom had, in effect, overwhelmed the U.S. message on 
Article VI. 
 
NATIONAL NUCLEAR REGULATOR (NNR) 
-------------------------------- 
 
7. (C) Also on May 18, Burkart and Cherry visited the 
National Nuclear Regulator (NNR) in Centurion, where CEO 
Louisa Zondo led her management team in a presentation of 
NNR.  Zondo explained that the NNR was a relatively new 
agency, having been created by the National Nuclear 
Regulation Act of 1999 and established in 2000.  She stressed 
that two key areas for NNR were compliance monitoring and 
emergency planning.  In addition, NNR was currently 
preoccupied with putting into place a waste management policy 
and strategy that would govern NECSA's Vaalputs repository. 
While NNR had overall responsibility to regulate all things 
nuclear, the control of medical sources of radiological 
material rested with the Department of Health. 
 
8. (C) Zondo stressed that while NNR was able to access 
technical support from security agencies, from a management 
perspective it was important for NNR to develop its own 
in-house capacity.  This would take time.  NNR was exploring 
training programs with the U.S. Nuclear Regulatory Commission 
(NRC) and sister regulatory bodies.  To meet current needs, 
NNR was looking at bringing experienced South Africans out of 
retirement. 
 
9. (C) Zondo characterized the February emergency 
preparedness drill at ESKOM's Koeberg Nuclear Power Station 
as a success.  She said that the NRC observers who attended 
had written a favorable report on the exercise, and extended 
an open invitation to NNR officials to visit the NRC in the 
future. 
 
10. (C) Senior Manager for Nuclear Technology and Nuclear 
Suppliers C. Orion Philips then outlined his areas of 
responsibility, including the licensing process and risk 
control, determining compliance with best practices, the 
control of scrap materials, surface and underground mines, 
and radon measurement.  This included regulatory oversight of 
NECSA's Safari reactor safety and safeguards, the production 
of Molybdenum-99 (Mo-99), and the licensing change request to 
use LEU to produce Mo-99.  He was also responsible for waste 
management at NECSA's Vaalputs site. 
11. (C) Dr. Simnanye Alex Tsela outlined his responsibilities 
in the regulatory strategy division, which included the 
review of regulatory philosophy, best practices, legislation, 
and international collaboration. 
 
12. (C) Mr. G. Clappison outlined his responsibilities as 
head of the Power Reactor Division, which included Koeberg 
Nuclear Power Station and PBMR compliance with the conditions 
of their operating licenses, safety indicators, inspection 
programs, and outage inspections.  Clappison said that NNR 
conducted periodic safety reviews at Koeberg, as well as 
physical security reviews at Koeberg, Vaalputs, and PBMR.  He 
was in the process of reviewing safety and quality assurance 
aspects of PBMR designs, and assuring public participation in 
the licensing process.  In response to Burkart's inquiry 
about the absence of a high-pressure containment for the 
PBMR, Clappison said that this would be a key licensing 
issue.  However, NNR did not want to blindly apply light 
water reactor regulations to gas-cooled reactors, as the two 
technologies were markedly different.  Clappison explained 
that risk evaluation must be based on assessing phenomenon 
that might cause the release of nuclear or other hazardous 
materials.  Licensing would depend on assessing the risk to a 
person of 10xE-8 per year of reactor operation (specific risk 
was unspecified). 
 
13. (C) Dr. D. Kgwadi explained that he was in charge of a 
group of 18 engineers and scientists that provided support to 
the rest of the organization. 
 
NUCLEAR ENERGY CORPORATION OF SOUTH AFRICA (NECSA) 
--------------------------------------------- ----- 
 
14. (C) On May 19, CEO Senti Thobejani presented an overview 
of NECSA and how it had changed as an organization since it 
was known as the Atomic Energy Corporation.  NECSA still 
operated the Safari research reactor, but had now assumed a 
commercial focus, with commercial sales of medical 
radioisotopes, chemicals, and other products and services 
generating 80 percent of its income -- four-fifths of which 
from exports.  NECSA's six divisions included one that 
produces radioisotopes for medical applications, one that 
produces fluorine based chemicals, one that provides nuclear 
commercial services (such as pebble bed fuel manufacture), 
one that undertakes scientific research and provides waste 
management services, one that manages the 120 buildings at 
the Pelindaba complex, and one that provides corporate 
services (human resources, financial, and legal).  Nuclear 
technology products and services included 
radiopharmaceuticals, irradiation services, radiochemicals, 
radioactive sources, and radiation services.  In the medium 
term, NECSA hoped to increase its sales of Molybdenum-99, for 
which it was currently the world's fourth leading producer, 
by a factor of eight.  Thobejane thought that the South 
African Government would remain NECSA's sole shareholder in 
the foreseeable future, but admitted that this could change 
someday.  He explained that members of NECSA's Board of 
Directors were appointed by the Minister of Minerals and 
Energy for three-year terms, including the CEO.  Thobejane 
took office in September 2001. 
 
15. (C) Thobejani said that the government had been 
contemplating the creation of a new nuclear waste management 
agency (to be born out of NECSA), but decided against it 
because the size of South Africa's nuclear industry did not 
justify the additional investment.  For this reason, NECSA 
would continue to fulfill this service for the government. 
In return, NECSA would receive approximately $20 million per 
year, or 20 percent of its income.  This amount would also 
cover other services provided to government, such as the 
fulfillment of international nuclear safeguards agreements 
and limited scientific research.  Thobejane explained that 
these days most research and development at NECSA was very 
much product or service driven and, therefore, closer to 
development engineering than to pure research.  However, the 
Department of Science and Technology and the University of 
the Northwest (formerly Potchefstroom University) master's 
program conducted limited pure research at the Safari 
reactor.  Thobejane added that a draft waste management 
strategy had been released for public comment, but the 
comment period had been extended through June because of the 
technical nature of the document. 
 
16. (C) Thobejane commented that NECSA was looking at ways to 
rejuvenate its workforce and to develop young nuclear 
physicists and engineers.  To this end, NECSA had formed 
exchange and training partnerships with AREVA and BNFL, had 
created sister university partnership with Pennsylvania State 
University, and was considering a collaborative program with 
Argonne National Laboratory.  NECSA's workforce currently 
numbered about 1500, down from 6000 in the 1990's. 
 
NECSA's INVOLVEMENT IN PBMR 
--------------------------- 
 
17. (C) Thobejane informed Burkart and Cherry that NECSA was 
about to intensify its involvement with PBMR Ltd.  Until now, 
NECSA's goal had been to become the primary manufacturer of 
pebble bed fuel.  While this goal still held, PBMR Ltd. was 
about to become even more important to NECSA because the 
South African Government had decided to transfer at least 10 
percent of its shareholdings from ESKOM Enterprises to NECSA. 
 Division Manager Fanie Venter then provided a tour of pebble 
bed fuel fabrication under development at a NECSA lab.  The 
lab's short-term objective was to replicate as much as 
possible proven German production methods of TRISO fuel. 
This would serve as a measure of technology acquisition, as 
well as reduce the risk to PBMR Ltd.  Burkart and Cherry 
witnessed the production of a handball sized fuel sphere made 
of graphite and other layered materials.  At this time, no 
uranium loading of the spheres was taking place.  NECSA 
needed a license for working with enriched uranium before it 
could proceed with plans to implant 9.6 percent enriched 
uranium particles into the core of the graphite fuel spheres. 
 The current objective was to build the production capacity 
to manufacture 270,000 spheres per year, enough to fuel the 
demonstration reactor planned for Koeberg.  NECSA General 
Manager Karel Fouche' said that PBMR already had contracts in 
place with the Russians for the provision of 28 kg of 10 
percent LEU for the demonstration plant.  In the future, 
however, tons of such fuel would be needed.  Burkart advised 
NECSA officials that the USEC license application for its new 
enrichment plant in the United States would allow enrichment 
up to 10 percent, but that the new URENCO plant would be 
limited to 5 percent. 
 
OTHER TOURS AT NECSA 
-------------------- 
 
19. (C) Burkart and Cherry toured the Safari reactor and also 
saw the IQ3 Drum Scanner in operation at the site of NECSA's 
decommissioned Semi-Commercial Enrichment Plant.  At the 
reactor, Fouche' stated that NECSA was fabricating two lead 
test assemblies in a glove box to test reactor operation on 
19.9 percent enriched uranium, vice the existing 90 percent 
enriched uranium reactor fuel.  At the IQ3 Drum Scanning 
Project, funded out of Director Cherry's office at DOE, Bert 
Rollen of Oak Ridge National Laboratories was on hand to 
provide an overview of the project along with NECSA 
supervisors.  Currently, the contents of 1074 drums out of 
1104 drums with HEU contaminated waste have been scanned to 
determine the amount of U-235.  The IAEA has verified 782 
drums containing 21 kg of U-235 while 292 drums containing 
5.9 kg of U-235 remain to be verified.  As many as 40,000 
drums containing LEU contaminated waste still needed to be 
scanned. 
 
NECSA MANAGERS SUGGEST AREAS FOR COOPERATION 
-------------------------------------------- 
 
20. (C) General Manager Karel Fouche' expressed NECSA's 
desire to continue its involvement in the Reduced Enrichment 
for Research and Test Reactors (RERTR) program.  Fouche' was 
very interested in Argentina's test using LEU targets to 
produce of Molybdenum 99.  He welcomed the opportunity to 
host an August visit from Argonne National Laboratory 
officials, who were assisting the Argentineans.  Fouche' also 
expressed NECSA's interest in attending the U.S. sponsored 
workshop for radioisotope producing countries, now scheduled 
for October in Vienna, Austria. 
 
21. (C) NECSA Divisional Manager Pieter Bredell, whose charge 
was management of the Vaalputs waste site, expressed interest 
in sharing information with the United States on waste site 
management and disposal, and was open to possible U.S. 
assistance on the transportation of nuclear waste.  In 
return, he thought that the United States might be interested 
in NECSA's pioneering bore hole concept for the disposal of 
spent radioactive sources 50-100 meters underground -- a 
technique that allowed fellow African countries with less 
sophisticated technology to store medical waste at sites 
within their own borders. 
 
22. (C) Senior Manager Deitleib Tillwick thought that there 
was room for technical cooperation in the area of safeguards. 
 Specifically, Manager Joseph Shayi was looking for a 
solution to a problem he had on meeting safeguards 
requirements, which impacted NECSA's PBMR fuel fabrication 
operations. 
23. (C) CEO Thobejani summarized the major categories for 
potential bilateral collaboration as including waste 
management, safeguards, licensing and regulatory issues, LEU 
production technology for Molybdenum 99, and skills 
development. 
 
PBMR LTD. 
--------- 
 
24. (C) PBMR Ltd. CEO Nic Terblanche told Burkart and Cherry 
that the South African Government had recently decided to 
make PBMR a strategic national project, virtually assuring 
government financing for PBMR Ltd. through the development 
phase and allowing the construction of a demonstration 
reactor at Koeberg.  Almost 500 engineers and scientists were 
now engaged in the project, including 50-60 at NECSA, 50 at 
South African supplier IST Nuclear, and 30 at ESKOM.  If the 
PBMR dream came true, said Terblanche, the company would be 
the first to build a nuclear power plant that was inherently 
safe. 
 
25. (C) Terblanche argued that PBMR, as a very high 
temperature reactor (VTHR), was ideally suited for the 
nuclear cogeneration component of DOE's Hydrogen Energy 
Initiative at the Idaho National Engineering and 
Environmental Laboratories (INEEL).  PBMR Ltd. models already 
predicted temperatures near desired levels for Generation IV 
VHTR's.  Compared to competing technologies, PBMR was safer, 
more cost efficient, more environmentally safe, and more 
flexible.  Moreover, Terblanche thought that PBMR Ltd. was 
probably four years ahead of its nearest competitor.  U.S. 
based Westinghouse Nuclear, a wholly owned subsidiary of 
shareholder BNFL, would lead PBMR Ltd.'s consortium of U.S 
companies that included Air Products (the world's largest 
producer of hydrogen) and Sargent and Lundy (an experienced 
engineering and construction firm in the power industry) in 
its INEEL bid.  For those who felt that PBMR was too advanced 
to qualify for INEEL, Chief Technology Officer Dieter Matzner 
argued that there was still plenty room for further research 
and development oriented towards achieving even higher 
temperatures. 
 
26. (C) If PBMR were not selected for the cogeneration 
project at INEEL, Terblanche said, PMBR Ltd. "would revert to 
Plan A," which was to roll out its product in major markets, 
especially the United States.  In fact, success, as measured 
by PBMR Ltd.'s business plan, would be achieved if the 
company captured just 4 percent of new sales worldwide.  With 
or without INEEL, PBMR Ltd. planned to seek an NRC license, 
and had already sent NRC a letter of intent.  PBMR Ltd. hoped 
to initiate discussions with the NRC this summer, partly to 
engage the NRC so that PBMR would not be overlooked in the 
wake of the NRC's licensing process for Westinghouse' AP1000. 
 To help with the licensing process, PBMR Ltd. was assembling 
an advisory group of U.S. utilities that would include former 
shareholder Exelon and First Energy, among other U.S. 
utilities and potential customers.  When asked how long it 
would take for PBMR Ltd. to reach its targeted capital cost 
of around USD 1000 per installed kilowatt electric, the 
response was that it was important to first have sufficient 
orders in the pipeline to justify PBMR suppliers setting up 
dedicated manufacturing facilities.  If this were achieved, 
then 70 percent of the learning would take place during the 
production of the first three "8-packs."  By the seventh 
"8-pack," 98 percent of the learning would be achieved. 
Therefore, depending upon the starting point for cost, the 
targeted cost of around USD 1000 per kilowatt electric would 
likely be achieved between the 3rd and 7th "8-pack", or 
between the 24th and 56th reactor built. 
 
27. (C) Senior Scientist Dr. Johan Slabber then walked 
Burkart and Cherry through PBMR technology.  Slabber 
explained how safety was primarily controlled by heat 
production within the reactor vessel.  The design also 
incorporated 23 control rods in addition to spheres 
containing boron carbide that could be activated to rapidly 
shut down the reactor to cold conditions.  Slabber also 
explained why PBMR Ltd. felt that pebble fuel was better than 
prismatic block.  First, fuel temperatures were lower. 
Second, there was no need for a shielded facility or down 
time to replace fuel blocks, since the pebbles would cycle 
out of the system once spent.  And third, no burnable poisons 
were required to stretch out the fuel cycle.  Slabber also 
explained the Brayton Cycle (the heat transfer system based 
on using the helium coolant to directly drive the gas turbine 
rather than to generate steam) and other aspects of the PBMR 
technology.  A copy of Slabber's briefing is available from 
DOS/NP/NE Deputy Director Burkart. 
 
28. (C) Slabber thought that PBMR development would benefit 
greatly from the bilateral R&D agreements now under 
discussion.  The agreements would facilitate the exchange of 
information and allow INEEL scientists to test PBMR models. 
PBMR would be able to collaborate with the U.S. on the MELCOR 
code that modeled meltdown and chemical reactions, and on the 
Gas Reactor Severe Accident Code for air ingress events. 
Slabber added that PBMR Ltd. had already shared its computer 
codes on core neutronics with INEEL scientists so that they 
could conduct independent analyses. 
 
29. (C) PBMR Project Manager Abrie Botma then outlined where 
the development and testing program stood.  The University of 
the Northwest (previously Potchefstroom University) had built 
a 15-meter long, 37-ton PBMR micro model with a traditional 
heat source to test the Brayton Cycle.  PBMR Ltd. next 
planned to build a helium test loop at NECSA.  This loop 
would be three times the size of a similar one in the United 
States.  Comment: PBMR Ltd.'s current development strategy is 
in sharp contrast to that pursued under former PBMR Ltd. CEO 
Dave Nicholls, which could best be characterized as "just 
build it."  While not compromising any of the innovative 
aspects of the system, PBMR Ltd. is engaging in more 
extensive testing of subsystems and has stretched out the 
development/deployment schedule substantially.  End Comment. 
 
30. (C) Botma also explained that PBMR Ltd. had decided to 
create a number of "Centers of Excellence" around knowledge 
areas that were central to PBMR, including: turbine 
technology, Brayton Cycle technology, stochastic analysis, 
measurement technology, materials programs, thermo 
hydraulics, hydrogen generation, fuel advancements, and 
coolant chemistries.  These centers would be managed as 
international resource institutions. 
 
KOEBERG NUCLEAR POWER STATION 
----------------------------- 
 
31. (C) Burkart and Cherry ended their trip with a visit to 
ESKOM's Koeberg Nuclear Power Station, which this year was 
celebrating 20 years of incident free operation.  Koeberg was 
one of a series of French built plants with proven, 
standardized reactor technology based on a Westinghouse 
design.  In fact, the French company Framatome still posted 
6-8 employees at the site.  Power Station Manager Peter 
Prozesky reviewed Koeberg's various safety and training 
programs, and ESKOM's decision, because of its relative 
isolation, to reach out to other countries like France and 
the United States to keep itself apprised of best practices 
and changing international standards.  Prozesky said that 
because the South African Government considered Koeberg a 
"national key point" (a critical asset), Koeberg was under 
constant threat review.  Prozesky also showed Burkart and 
Cherry the unique foundation supporting Koeberg's two 
reactors -- hundreds of pillars with rubber bearings to allow 
for sway in case of earthquake. 
 
CAPACITY BUILDING 
----------------- 
 
32. (C) A recurring theme throughout Burkart and Cherry's 
visit was South Africa's need to build technical capacity 
through skills development and training.  Specifically, DME 
and DFA talked about the need to train their staff.  Goosen 
said that DFA was developing its own nonproliferation 
seminar, and invited U.S. participation.  NECSA talked about 
university exchanges and rejuvenating its workforce.  NNR 
talked about the need for skills development and capacity 
building.  These discussions reinforced what Magubane and 
Maqubela told officials in Washington during their visit last 
October.  Clearly, capacity building and technical exchanges 
could be a very important part of our JSCNEC agenda. 
 
NEXT STEPS 
---------- 
 
33. (C) Both sides felt that they were close to concluding 
R&D agreements on nuclear energy cooperation and nuclear 
materials safeguards technologies.  The South Africans still 
had some issues associated with how the agreements should be 
framed, i.e., between governments or departments, and 
indicated that they might have some questions related to the 
annex on intellectual property.  Recently, DFA told us that 
it planned to call the relevant parties together to discuss 
the R&D agreements and the possibility of holding the first 
JSCNEC December 1-3, 2004 in Pretoria.  Both DME and NECSA 
have reconfirmed their desire to participate in the proposed 
Workshop for Medical Radioisotope Producing Countries planned 
for October, but need to know the new dates.  NECSA has 
welcomed the opportunity to host an August visit from Argonne 
National Laboratory officials to discuss using LEU for 
targets to produce Molybdenum-99; Embassy/Pretoria stands 
ready to facilitate this visit. 
HUME