Two American firms played a key role in South Africa's acquiring almost 100 tons of enriched uranium in contradiction to the U.S. government's policy of opposing the acquisition because South Africa refuses to sign the nuclear non-proliferation treaty.
The two firms are Edlow International of Washington, D.C., and SWUCO, Inc. of Rockville, Md., which acted as brokers between South Africa and uranium suppliers and enrichers in Switzerland, Belgium and France.
The uranium now is in France being made into fuel rods for South Africa's first nuclear power plant. It is to be shipped there later this year when the South African Electric Supply Commission is scheduled to turn the key on the first of its two huge nuclear power plants at Koeberg near Cape Town. Together, the two plants will generate 2 million kilowatts of electricity.
The story of the uranium has almost as many twists and turns as a suspense novel. Reports published last November said that China was the supplier of the uranium. Canada also was mentioned in nuclear circles as the source.
American officials were concerned that the sale was undercutting U.S. attempts to get South Africa to participate in the non-proliferation treaty and agree to international inspection of all its nuclear installations, including a uranium enrichment plant that is under construction.
The story begins in 1974, when the United States contracted to supply South Africa with enough enriched uranium to run the two plants at Koeberg from 1981 to 2010.
That was before South Africa refused to sign the non-proliferation treaty, which bans the spread of nuclear weapons, and to put all its nuclear installations under the "full-scope safeguards" required by the Non Proliferation Act passed by Congress in 1978.
As a result, the United States held up the uranium shipments to South Africa, which left it unable to start up either of its two Koeberg reactors.
Then, the rush to build nuclear power plants slowed, which with the worldwide business slowdown left the industrialized nations with an excess of uranium.
The Swiss and Belgians held some of the excess uranium because they had overbought for nuclear power plants whose construction was being delayed. About a year ago, the South African Electric Supply Commission made it known that it was desperate enough to pay a premium price for uranium to start up at least one of its Koeberg reactors.
Edlow and SWUCO bought the excess uranium from Switzerland and Belgium. They then turned it over to two European enrichers, one a European consortium called Eurodif, the other they refuse to name, to be enriched into usable fuel, and sold title to it to South Africa.
Edlow and SWUCO are doing nothing illegal. There are no U.S. laws that even require them to report the deal to the State Department.
"All we did was act as broker, buying the uranium as excess stock in Belgium and Switzerland," Jack Edlow, president of Edlow International, told The Washington Post. "Our business is to match buyers and sellers and since everybody is sitting on extra uranium that wasn't too hard to do."
Sen. John Glenn (D-Ohio), co-author of the Non Proliferation Act and ranking minority member of the Senate subcommittee on energy and nuclear proliferation, doesn't see it that way. In a letter to Secretary of State Alexander M. Haig Jr., Glenn demanded to know how an American firm like Edlow could be allowed to act as middleman in the sale of uranium to South Africa when the U.S. government by law is prohibited from making the sale. All enriched uranium in the United States is owned by the government.
"That a U.S. firm may have contributed to defeating the non-proliferation policies of its own government is deeply disturbing," Glenn told Haig, "particularly when the firm is the beneficiary of numerous government-granted licenses covering the shipment and export of nuclear materials."
France has no law requiring "full-scope" safeguards under which international teams inspect all its nuclear installations. France only requires that reactors using French fuel be inspected to make sure none is diverted to make weapons.
"France does not believe the Koeberg reactor plays any part in any South African weapons program," a high-ranking French diplomat told The Washington Post. "We think the Koeberg reactor will be fully safeguarded after it gets its fuel from France."
To complete the circle, South Africa has just arranged to sell 3,000 pounds of the uranium it is buying through Edlow to the United States, which will enrich it here and sell it to Japan. South Africa doesn't need all that uranium because its own unsafeguarded uranium enrichment plant is scheduled to start producing enriched fuel for South Africa soon.