BRAZIL'S NUCLEAR PROGRAM: DYNAMICS AND PROSPECTS

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06826647
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: March 9, 2023
• Document Release Date: September 18, 2020
• Case Number: F-2017-01987
• Publication Date: September 28, 1979

Approved for Release: 2020/09/11 C06826647
National
Foreign
Assessment
Center
'Seem&
...Z"-e
International
Issues Review
28 September 1979
-Scent_
PA IIR 79-008
28 September 1979
Copy 635
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
bELKLI
INTERNATIONAL ISSUES REVIEW
28 September 1979
CONTENTS
NUCLEAR POLITICS
BRAZIL'S NUCLEAR PROGRAM: DYNAMICS AND
PROSPECTS
In the seven years since Brasilia and Bonn signed
the broad bilateral agreement establishing the
foundations and directions for Brazil's nuclear
development program through the early 1990s,
mounting domestic problems have forced the Brazil-
ians to make major modifications in their original
nuclear development plans.
ARMS CONTROL
REGIONAL ARMS CONTROL: REGIONAL STATE
RESPONSES TO MAJOR POWER ACTIONS
Recent experience indicates that the military and
diplomatic activity of major powers is of only
limited importance in affecting the willingness of
regional states to commit themselves to regional
arms control arrangements. Regional security and
related concerns are considerably more important.
INTERNATIONAL TERRORISM
COMBATING TERRORISM: EXTRADITION AS A
STUMBLING BLOCK
Disagreements over the political motivations of
terrorist suspects have led to tensions among West
European states, in US relations with several Mid-
dle Eastern countries, and within the UN regarding
the draft Convention Against the Taking of Hos-
tages. Language allowing several interpretations
of the convention has, however, permitted antiter-
rorist cooperation among otherwise like-minded
governments.
�5E-C-REI_
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
-SECRET---�
Brazil's Nuclear Program: Dynamics and Prospects
The comprehensive character of Brazil's nuclear
development program, especially the Brazilians' inten-
tion to build uranium enrichment and spent fuel re-
processing facilities, has been a matter of continuing
concern to the United States primarily because of the
increased risk of nuclear proliferation that is inher-
ent in the acquisition of such technology. The fact
that Brasilia refuses to sign the Non-Proliferation
Treaty, on nationalistic grounds, adds to this con-
cern. Mounting problems indigenous to Brazil, how-
ever, have forced the Brazilians to make major modifi-
cations in their original nuclear development plans.
This article analyzes the scope, causes, and im-
plications of these changes It is based an a much
longer assessment
Latin America
Analysis.
by the International Issues and
Divisions of the Office of Political
The Policy Setting
Four years have passed since Brasilia and Bonn
signed the broad bilateral agreement establishing the
foundations and directions for Brazil's nuclear program
through the early 1990s. For the record both govern-
ments still maintain that the accord--which envisages
construction of eight pressurized-water power reactors
(PWR) and a complete nuclear fuel cycle complex--will
be fulfilled in its entirety. It is now virtually cer-
tain, however, that parts of the original agreement will
be scaled down or left unimplemented as Brazil reassesses
its position in the light of experience and changing
political and economic circumstances. Implementation
28 September 1979
1
-SECRET_
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
TEM-T-7
The Brazilian Nuclear Plan
Power Reactor
Original Target
Date
Earliest Estimated
Completion Date
Type Power (MWe)
Status
1978
1980 (Angra 1)
PWR 626
Under construction '
1983
1986 (Angra II)
PWR 1,245
Under construction
1984
1987 (Angra HI)
PWR 1,245
Contracted, delayed
1986
1989
PWR 1,245
Planned
1987
1991-92
PWR 1,245
Planned
1988
Indefinite
PWR 1,245
Proposed '
1989
Indefinite
PWR 2x1245
Proposed'
1990
Indefinite
PWR 1,245
Proposed
Nuclear Fuel Cycle
Original Target Date
Revised Target Date
Facility
Capacity
1979
1980
Uranium concentration
500 metric tons per year
1980
1980
Pilot fuel fabrication
100 metric tons per year
NA'
1982-83
Pilot uranium enrichment
NA
1983
1983
Commercial-scale fuel fabrication
250 metric tons per year
1981
1983
Conversion plant (UFJ
500 metric tons per year
1984
1985
Pilot fuel reprocessing
3 metric tons per year (25 kg of
plutonium per year)
1982
1988-89
Demonstration-scale uranium
enrichment
200,000 Separative Work Units
(SW1.1) per year
NA
Probably mid-1990s
Commercial-scale reprocessing
150 metric tons per year
' Westinghouse-supplied.
' These four reactors probably will not be constructed.
'This facility was not originally planned.
'This plant will produce no usable enriched product.
' To be supplied by France.
2
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
has already already run into trouble on several fronts. Plan-
ning and construction of the nuclear facilities involved
are proceeding slowly and somewhat haphazardly and the
agreement is coming under increasing criticism within
the Brazilian scientific community.
The Brazilians in fact have already had to stretch
out their nuclear program and acknowledge unofficially
that it will have to be curtailed. They have also
altered the specifications of some facilities ordered
from the Germans. While none of the changes made last
December in Brasilia's nuclear plans reflect any loss
of interest in obtaining uranium enrichment and spent
fuel reprocessing facilities (and thus an autonomous
complete fuel cycle capability), the chances of full
implementation of the power reactor construction provi-
sions of the Brazilian - West German accord are even
more remote than before.
In particular, the Brazilians continue to be fully
committed to the construction of a pilot nuclear reproc-
essing plant. Because of planning difficulties and de-
lays in reactor construction, however, the development
of a pilot reprocessing facility may be a decade away,
and commercial reprocessing probably will not be justi-
fiable before the late 1990s.
Highlights of Brazil's recently revised nuclear
plan are presented in the table.
President Joao Figueiredo, who took office last May,
is the first military president with a specific mandate
to ease the political restrictions of the authoritarian
system erected by the Brazilian armed forces some 15
years ago. Since his accession, the political climate
in Brazil has continued to become more open and lively--
although gradually and under the watchful eye of the
military.
As a result of these political developments, Brazil-
ians feel much freer than before to examine and criti-
cize the whole spectrum of national policies. Brazil's
nuclear program and its nuclear accord with West Germany
have become fair game for debate in the Brazilian press,
and thus public attitudes toward these issues are ac-
quiring greater political significance.
28 September 1979
3
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
Since early last year, various aspects of Brazil's
nuclear effort have drawn public fire from a number of
politicians, journalists, and scientists--some question-
ing whether the nuclear agreement with West Germany
should have been made at all. This criticism should not,
however, be construed as a flagging national commitment
to the development of nuclear power. Acquisition of
this sophisticated technology is still generally viewed
as an important and tangible measure of Brazil's move-
ment toward becoming a major nation and is thus directly
tied to the achievement of great power status. Moreover,
both Brasilia and Bonn have compelling reasons to imple-
ment as much of their swee ing 1975 nuclear accord as
possible.
The Case for Going Ahead: Brazil's View
From Brasilia's vantage point, the development of
nuclear power and the acquisition of a complete nuclear
fuel cycle are seen as key national objectives for a
wide variety of reasons--not the least of which is the
Brazilian desire to secure independent and lasting
sources of energy to support their top-priority economic
development efforts.
The need to develop new power sources for Brazil's
growing cities--especially Sao Paulo, Rio de Janeiro,
and Belo Horizonte, which are South America's leading
industrial centers--is becoming increasingly urgent.
For the near term, at least, hydropower will remain sub-
stantially cheaper to develop in Brazil than nuclear
energy. The cost of developing remote hydroelectric
sites in the far north is higher, but available evidence
suggests that the expense of exploiting Brazil's hydro-
electric potential will not reach the cost of generating
nuclear power until 60 percent of that power has been
tapped. Indeed the policymakers have accelerated the
development of Brazil's vast hydroelectric resources and
intensified exploitation of indigenous coal reserves.
Nonetheless they remain concerned that delays in bring-
ing new capacity onstream could result in electrical
energy Oortaaes in the 1980s in the face of rapid urban
growth.
28 September 1979
4
Approved for for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
SEC
The Brazilians clearly feel that there are other
economic benefits to be derived from their ambitious
nuclear program, including the expansion and diversifi-
cation of foreign markets for their exports. Moreover,
they believe that mastery of nuclear technology will
greatly enhance their international image as an indus-
trially sophisticated nation. In this spirit, Brazil
has recently shown signs of interest in building new
regional bonds through nuclear cooperation with neigh-
boring Latin American states. This July, for example,
Brazilian Foreign Minister Guerrero signed a bilateral
memorandum of understanding on nuclear cooperation for
peaceful purposes with Venezuela. So far, the Brazilians
have only agreed to provide the Venezuelans with train-
ing and to exchange information on uranium prospecting
and uranium concentration.
Under Brazil's well-established and elaborate de-
fense doctrine, economic development is seen as essen-
tial for national security--which Brazilians define very
broadly to include social, political, and economic sta-
bility. Hence, whatever contributes to national develop-
ment enhances national security.
Classic military and defense preoccupations, on the
other hand, do not now loom large in the calculations of
Brazil's nuclear policy planners. Brazil is still largely
isolated from the main currents of international tensions
and has no fear of military attack from neighboring
states. Even its longstanding and, at times, bitter
rivalry for regional influence with Argentina--which has
the most advanced nuclear program in Latin America--is
not at present a major motivating factor behind Brazil's
nuclear ambitions. On the contrary, the relationship
between Brazil and Argentina has become increasingly
cooperative wiith the rapid expansion of bilateral trade.
There has even been considerable talk--both public
and private--about potential bilateral nuclear coopera-
tion between the two countries. Fundamental differences
in reactor design as well as issues of nationalist com-
petition will probably continue to restrict the degree
of cooperation, but it is possible that the two nations
28 September 1979
5
SECrtET
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
SECRE
might adopt a common strategy in opposition to supplier-
imposed restrictions on the transfer of nuclear tech-
nology. Argentina and Brazil might also agree to exten-
sive cooperation in the production of radioactive isotopes
for medical and industrial purposes.
Nonetheless, Brazilian leaders are well aware that
their regional security concerns could become more press-
ing over the next few years. They would see their inter-
ests threatened if any of the continent's simmering dis-
putes--for example, the territorial disagreements between
Chile and Argentina and between Chile and Peru--were to
erupt in fighting. Moreover, no conscientious Brazilian
planner would be willing to gamble on Argentina's ulti-
mate intentions or, despite the currently peaceful na-
ture of Brasilia's nuclear program, to argue that Brazil
should unilaterally foreclose the nuclear weapons option.
. .and West Germany's View
The Schmidt government is dismayed at the complica-
tions that have delayed implementation of joint nuclear
projects with Brazil. But there are several considera-
tions that will strongly motivate the West Germans to
follow through on the commitments they made in the 1975
agreement. In general they believe that the Federal
Republic must protect its reputation as a reliable SUD-
plier of nuclear equipment and technology.
Perhaps the most important specific consideration
for the West Germans is the huge economic stake they now
have in the Brazilian deal. If the agreement flounders,
the consequences would be catastrophic for the West
German nuclear industry, which is already in serious
financial difficulties. The prospect of government sub-
sidies to save the nuclear industry--on top of the
$8 billion Bonn has already invested in that sector--
could become a serious political problem for Chancellor
Schmidt when he faces national elections in October
1980.
The West Germans have other important reasons for
wishing to keep their nuclear cooperation agreement with
Brazil alive. One of the factors that originally en-
couraged them to send advanced nuclear technology to
28 September 1979
6
SECRET
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
Brazil was was the prospect of guaranteed access to Brazilian
uranium. While the current freeze on new reactor con-
struction in the Federal Republic strongly suggests that
the uranium contracts already signed with the major sup-
plier states might be adequate to meet West German re-
quirements for the coming decade, Bonn still has a sub-
stantial political interest in diversifying its source
of supply. As part of the original nuclear cooperation
agreement, the West Germans were given the right to 20
percent of the uranium discovered and exploited by Nuclam,
a Brazilian - West German company. During the past year,
the Brazilians have raised the estimate of their com-
mercially exploitable uranium reserves to more than
100,000 metric tons.
In addition to this vested interest in uranium ex-
ploration, the West Germans have a general interest in
promoting economic relations with the Brazilians. While
Brazil only accounts for a small share of West German
exports, the West Germans have substantial nonnuclear
investments in this country. The Schmidt government
wants to nurture and expand this economic relationship
as part of a general effort to penetrate the Latin
American market.
Constraints on Brazil's Nuclear Aspirations
Limited political liberalization has made it more
difficult for the Brazilian Government to keep the ex-
pense of the nuclear program from becoming a divisive
political issue, particularly when Brazil is suffering
from a sustained high rate of inflation and a relative
decline in economic growth. At a time of growing pre-
occupation with socioeconomic problems, spending vast
sums on projects with no short-term, highly visible pay-
off has not gone unchallenged. Nevertheless, the do-
mestic debate over Brazil's nuclear program has remained
moderate in tone. (It is worth noting that, for what-
ever reason, the reprocessing aspects of the nuclear
program have been spared from public criticism.)
While the shift in the domestic political environ-
ment undoubtedly contributed to Brasilia's decision to
stretch out and pare down its original nuclear plans,
economic constraints were the determining factors.
First, soaring costs are undermining Brazil's ability
28 September 1979
7
-�
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
,EreemEfi�,
to pay for the ambitious program. The original estimate
of $5 billion for reactors and associated facilities,
for example, may quadruple. Moreover, expensive nuclear
power plants have become increasingly difficult to jus-
tify in view of the slower-than-anticipated growth in
consumption of electricity.
Other broad economic developments are also under-
cutting Brazil's ability to absorb the escalating costs
of the nuclear program. Persistent inflation, combined
with less rapid economic growth, is squeezing government
funding allocations for infrastructure projects. Brazil's
mounting foreign debt--presently over $43 billion--is
limiting its ability to import sophisticated foreign
equipment in the amounts required for its nuclear pro-
gram. Although Brazil's generally favorable credit rat-
ing would enable it to secure additional foreign financ-
ing for its nuclear imports, the cost would be high and
the availability of foreign credits for more productive
economic ventures would be reduced.
Finally, Brazil's lack of an extensive high tech-
nology base has made it difficult to carry out its nu-
clear program. Although the infrastructure set up by
Brazil and west Germany for the implementation of their
accord (including the transfer of technology) is sound
enough, the Brazilians remain severely hampered by a
lack of trained personnel and, more generally, practical
experience in nuclear and related matters. Indeed, the
long time required to train the large number of person-
nel needed in both the technical and industrial fields
has been responsible for much of the slippage in the im-
plementation of Brazil's nuclear program so far. In-
experience and recourse to trial-and-error methods can
also be blamed in part for the soaring costs in all
sectors of the program�and in reactor construction in
particular.
Thus far, foreign events and international pressures
have had no discernible dampening effect on Brasilia's
determination to implement its nuclear program. Indeed,
a number of external developments and pressures--for ex-
ample, the dramatic increase in the cost of oil due in
large part to the pricing policies of the Organization
of Petroleum Exporting Countries--have had precisely
the opposite effect.
28 September 1979
8
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
SECRET
Looking Ahead
Predictions concerning the future of Brazilian -
West German nuclear cooperation and of Brazil's nuclear
program as a whole are difficult because Brasilia will
continue to be pulled and pushed in opposite directions
by a wide array of political, economic, technical, and
security considerations. Soaring costs, economic slow-
down, and technical difficulties will operate as in the
past to delay and stunt the program. Expected further
increases in the price of imported oil, the logic of
Brazil's quest for energy independence, and the nation's
aspirations to great power status will continue to re-
inforce Brazilian determination to preserve and imple-
ment as much of the nuclear program as possible.
For at least the next year or two these opposing
factors seem likely to offset each other and thus allow
Brazil's nuclear program to develop along the more modest
lines that have been emerging in recent months. Whether
this tendency persists will depend in part on the shift-
ing political, economic, and technological environment,
both regional and global. Nonetheless, Brazil will con-
tinue to be highly resistant to outside pressures to
alter its plans in the interest of reducing the attend-
ant proliferation risks.
Over the next several months, Figueiredo will prob-
ably not be under much domestic political pressure to
make further changes in Brazil's nuclear program, partly
because the changes already made have made it easier to
defend the program. The worsening economic climate in
Brazil will, however, create further problems with re-
spect to developing nuclear power that could have a sig-
nificant effect in the longer run. To cope with an
annual inflation rate of 50 percent (and perhaps more),
Brasilia has cut the budgets for government agency ex-
penditures. In addition, the government's recent pro-
hibitions on commercial bank loans to state entities--
another feature of its anti-inflationary package--place
financial restrictions on Nuclebras, the state-owned
nuclear holding company, that will limit its ability to
fund investments.
28 September 1979
9
SECRET
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
SECRET
Imports of foreign equipment critical to Brazil's
nuclear program will also be harder to manage this year
because of a record current account deficit of $8-9
billion. Moreover, the rising cost of servicing Brazil's
Eurodollar debt will reduce the amount of foreign ex-
change available to Nuclebras for purchase of nuclear
hardware.
Because of Brazil's worsening economic climate, it
also seems likely that:
Brazil will buy no more than four--and possibly
as few as three--of the eight German reactors
originally provided for in the 1975 accord.
The Brazilians will eventually abandon, because
of both cost and technological considerations,
tentative plans to expand their projected
demonstration-scale Becker nozzle uranium en-
richment facility to a commercial-scale plant.
Barring serious problems with the commercially un-
proven Becker process or unforeseen political or economic
difficulties of major proportions, however, we doubt that
Brasilia will drop the demonstration-scale uranium en-
richment project or otherwise fundamentally alter its
current plans to acquire a complete nuclear fuel cycle
from West Germany. Nor do we think it likely that Brazil
will buy fewer than three power reactors from the Germans.
While Brasilia has watched the progress of other
aspiring nuclear states (especially in Latin America)
with keen intere�st--and while any notable successes
achieved by those states might have some stimulating ef-
fect on its own nuclear efforts--it is unlikely to be
greatly influenced by any of their specific nuclear pol-
icies or decisions unless those moves appear threaten-
ing. In particular, a decision--whether voluntary or
involuntary--on the part of another state to forgo ac-
quisition of a complete nuclear fuel cycle would prob-
ably not persuade the Brazilians to follow suit.
28 September 1979
10
Approved for Release: 2020/09/11 C06826647
Approved for Release: 2020/09/11 C06826647
bECRE
In sum, President Figueiredo, who enjoys the advan-
tage of not being publicly indentified with the original
1975 nuclear accord, has quietly but effectively lowered
his government's sights on the nuclear program because
of major economic and technical problems. Further slip-
page and "adjustments" seem likely, especially in the
longer run. Nonetheless, there is little reason to ex-
pect that Figueiredo--whose term expires in 1985--or
any of his most plausible successors will abandon the
essential elements of a program so closely tied to na-
tional pressure to push Brazil back into a stridently
ziationalistic defense of its nuclear plans./
28 September 1979
11
SECRET
Approved for Release: 2020/09/11 C06826647