December 30, 2009 / 3:45 PM / in 10 years

UPDATE 1-Iran denies secret deal to import Kazakh uranium

* Iran was reportedly close to a deal to import uranium ore

* Iran and Kazakhstan deny the report as “baseless”

(Adds Kazakhstan’s Foreign Ministry’s reaction)

TEHRAN, Dec 30 (Reuters) - Iran on Wednesday denied as “baseless” a report that it was close to clinching a deal to import 1,350 tons (1,372 tonnes) of purified uranium ore from Kazakhstan to restock its depleted reserves.

Any such deal would violate United Nations sanctions imposed on Iran in 2006 over its nuclear programme. Uranium ore, also known as “yellow cake”, can be enriched to use for fuel either for reactors or nuclear weapons.

The report by the Associated Press news agency cited an intelligence report by an unnamed member nation of the United Nations’ International Atomic Energy Agency (IAEA).

It said Iran was willing to pay $450 million for the uranium and that the clandestine deal, to be sealed with Kazakh state employees acting without the approval of the Kazakh government, could be completed within weeks.

“Such fabrications of news are part of the psychological warfare (against Iran) to serve the political interests of the hegemonic powers,” Iran’s representative at the United Nations said in a statement faxed to Reuters.

The United States and its European allies accuse Iran of planning to produce a nuclear bomb and are weighing further sanctions. Tehran says it only wants to generate electricity.

A U.S. think-tank said earlier this year Iran may be close to exhausting its yellow cake supplies and lacks the resources to sustain processing and enrichment activities. [ID:nLC627476]

A Western diplomat in Vienna said his country was aware of the intelligence and was concerned about it, but could not say whether or not it was accurate.

Kazakhstan denied the report.

“The Ministry of Foreign Affairs categorically denies reports in some media of Kazakhstan’s involvement in a possible deal to supply uranium to Iran and considers them baseless insinuations that are detrimental to the reputation of our country,” the ministry said in a statement on Wednesday.

“Kazakhstan is firmly committed to the principles of non-proliferation of weapons of mass destruction and the strict control of the distribution of dual-use materials.”

The amount of ore mentioned in the report would account for almost a tenth of Kazakhstan’s 2009 output. The spot market price for 1,350 tons of yellow cake would be around $130 million, less than a third of Iran’s reported bid.

Kazakhstan’s state nuclear company Kazatomprom said on Wednesday it would produce 13,900 tonnes of uranium this year and 18,000 in 2010. [ID:nLDE5BT046]

More than three-quarters of the total is produced by joint ventures with companies such as France’s Areva CEPFi.PA and Canada’s Uranium One UUU.TO.

The IAEA declined to comment on the report.

Earlier, Kazakhstan’s Foreign Ministry spokesman Yerzhan Ashykbayev said everything Kazakhstan does in the uranium industry is in accordance with IAEA standards. (Reporting by Ramin Mostafavi; additional reporting by Boris Groendahl in Vienna, Eric Onstad in London and Olzhas Auyezhov in Almaty; Editing by Janet Lawrence)

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