172 Memorandum from Kentwell1 to Waller

Tokyo, 28 June 1971

Confidential

Visit of Mr. K.F. Alder and Dr. G.L. Miles

The visit began with a call on the Ambassador on the morning of 7th June which was followed by a luncheon given by the Minister, Mr. D.J. Horne. A list of the guests is at Appendix 1.2

2. During the luncheon Mr. Masafumi Shibata, Head of the International Co-operation Division of the Atomic Energy Bureau commented that the visit by Messrs. Alder and Miles was timely because the Japan Atomic Energy Commission was obliged to report to the government by the end of July, 1971 on where and how Japan should obtain its supplies of natural and enriched uranium up to the year 1985. Shibata added that the report would be tabled before the International Conference at Geneva in September, 1971. Shibata went on to say that Japan would discuss the same topics with Canada in Tokyo in October, 1971 and with the United States (in the USA) in November, 1971. He said these discussions would be a part of the regular exchange of meetings on atomic energy held between the countries concerned. Shibata said that Mr P. Tresize, the United States Under-Secretary of State for Economic Affairs, during his visit to Japan, had outlined future problems facing the United States in obtaining fuel resources as similar to current problems facing Japan. He said Tresize had suggested a joint Canada/Australia/Japan/United States of America Committee to study energy resources.

[matter omitted]

Japan Atomic Energy Research Institute (JAERI). 8th June.

5. Mr. Alder explained the purpose of the visit to Japan. He said that at this stage his chief interest in meeting members of JAERI was to enquire about research being conducted in Japan on the ATR.3 A technological discussion ensued which touched on research in diffusion techniques being carried out by the Physics and Chemistry Research Institute (RIKEN) on the membrane and barrier. Alder also asked about the companies which manufacture components and machinery used in reactor construction. He was told that Ishikawajima-Harima Heavy Industries, the Mitsubishi Corporation, the Hitachi Shipbuilding Company and Kawasaki Steel Industries Limited constituted the main manufacturers. In discussion whether Japan would opt for the diffusion techniques or the centrifuge technique Mr. Murata of JAERI said it was hoped to run a 15-stage cascade before a decision was taken, which would have to be not later than 1976. A list of participants at the meeting is attached at Appendix 3. Power Reactor and Nuclear Fuel Corporation (PNC). 9th June.

6. Mr. Alder began the discussions by explaining the purpose of his visit. In return, Mr. Inoue of PNC handed over a graph showing plans for constructing atomic power stations in Japan up to the 1985. He also handed over two tables showing Japan's estimated demand for natural uranium and the estimated demand for enriched uranium, also up to the year 1985. Copies of these are attached at Appendix 4. Mr. Inoue pointed out that the 60,000 megawatts nuclear planned for generation in 1985 would be about one-quarter of Japan's total generating capacity in that year. Discussion then followed on the cost of electric power generated in Japan, United States of America, Canada and Australia. This lead into a discussion of the possible siting of a multi-national enrichment plant which would need to go into production in the early 1980s. Inoue said that research and development at present taking place in Japan aimed at securing technology which would enable the country to enrich about one-third of its uranium needs by 1985. It was hoped the second third of Japan's needs would be adequately covered by the somewhat expanded production within the United States, with whom Japan has a 30-year Agreement. The remaining third, it was hoped, would be covered by one or more multinational plants to be built neither in Japan nor the United States but possibly in Australia or Canada or elsewhere. Inoue agreed with Alder that a first multi-national plant would probably be a gaseous diffusion one. He said he would like to make it quite clear that such a plant could not be constructed in Japan because Japan did not wish to open itself in any way to accusations that it would use nuclear enrichment processes for military purposes.

7. Mr. Alder then asked about research being conducted on ATR. Mr Inoue said research and development was going ahead satisfactorily and it was hoped to bring ATRs into commercial production by 1980. FBR4 developments were also progressing satisfactorily and it was hoped to bring one into production during the period 1985–90. Inoue added that looking ahead from the year 1970 to the year 2000, 420,000 tons of uranium would be needed to meet nuclear generation requirements using LWRs5 or FBRs, but if ATRs were satisfactorily developed and used, then the demand for uranium would decrease to 340,000 tons.

8. Mr. Sadamu Sawai was then summoned to the meeting and, for Mr. Alder's benefit, gave an account of latest developments of ATR technology being researched by PNC. A list of participants is attached at Appendix 5.

[matter omitted]

Ministry of International Trade and Industry (MITI). 10th June.

11. At the MITI Mr. Alder and Dr. Miles called on the Energy Policy Division (Head, Hanzawa6). An outline of MITI's responsibilities in the nuclear field being sought, it was explained that MITI was involved in both the nuclear fuel and nuclear power station aspects. As far as nuclear fuel was concerned the Energy Policy Division […] formulated Japan's overall energy policy which served as a guide line for supervising and guiding the electric power companies, and in this respect it controlled both the construction and operation of nuclear power stations. MITI conducted inspections of nuclear power stations parallel to those conducted by the Science and Technology Agency, but whereas the latter looked at them from the technical and safety points of view (i.e. mainly design aspects) MITI was concerned from an industrial–managerial point of view.

12. Mr. Alder gave the background to the studies the AAEC was carrying out on uranium enrichment. Mr. Hanzawa confirmed that MITI was interested in this subject and said that at the end of May the Energy Research Council, an advisory body to their Minister, had issued an interim report on Japan's future needs for uranium.

13. Mr. Alder then asked what kind of Japanese participation would be feasible if an enrichment plant were established in Australia. The Japanese side replied broadly there were two possibilities-participation through a government corporation; or participation through a consortium of private companies (presumably electric power companies). In the first case the government corporation could be either an existing corporation (e.g. the Overseas Uranium Development Corporation) or a newly-established corporation (which might be responsible to both the Minister for International Trade and Industry and the Director-General of the Science and Technology Agency).

14. Mr. Alder said that any country providing the technology for the kind of project would seek guarantees that the technology would be properly guarded. What guarantee could Japan give? The Japanese side replied that there was no Official Secrets Act in Japan and no equivalent of security as it existed in other countries. There was, however, an article of the Criminal Code which prohibited the divulging of commercial secrets. The Japanese Government could not give any guarantees if the equivalent of an Official Secrets Act was necessary, because domestic political feeling was against such an Act. In that case Japanese participation would not go beyond guaranteeing a market and the provision of capital. However, if protection on the same basis as commercial secrets was sufficient, there was no obstacle. A list of participants is attached at Appendix 8.

Japan Atomic Industrial Forum (JAIF). 10th June.

15. (a) Discussion with the Deputy Director
Mr. Alder and Dr. Miles were entertained at a private luncheon by Mr. Soichi Matsune, the Deputy Director of the JAIF. After hearing an outline of the AAEC's thoughts on enrichment, Mr. Matsune expressed the view that it was in Japan's interest to participate in a multi-national uranium enrichment project. He said he had put this view in his address to the Pacific Basin Economic Consultative Committee in Vancouver recently (our memorandum No. 633 of 14 June7 refers). He was convinced that at least 50% of the nuclear fuel industry field in Japan shared this view.

16. Mr. Matsune asked whether the AAEC had any preferences regarding the possible partner who would provide the technology for the project. Mr. Alder said that this was being approached with an open mind although he believed many people thought it advisable to have a completely new source of commercially-available enriched uranium which would be independent of existing supplies. Mr. Matsune asked if this meant that the AAEC was considering excluding the United States, and Mr. Alder replied that this was a way of thinking which had a lot to commend itself.

17. Mr. Matsune asked about the AAEC's time schedule and pointed out that Japan would still have a fairly urgent need for uranium in the late 1970s. Did the fact that this kind of project was being considered mean that Australia would not export recent finds of uranium? Mr. Alder replied that the time scale was considered realistic. Other countries who thought they could complete a similar project in a shorter time were being overly optimistic. This did not mean that Australia would not export uranium ore, but it was felt that the objective should be to have more and more processing done in Australia. This could be achieved gradually but because of the time and expense required in planning an enrichment plant, the AAEC was starting its long-term plan now.

18. Mr. Matsune then asked whether in Mr. Alder's view the gaseous diffusion or centrifuge was the best method for enrichment. Mr. Alder felt that from the point of view of power cost, and probably a number other factors too, the centrifuge would one day prove to be the most practical and economic method. But the fact was at the moment there was only one commercial method, gaseous diffusion, and because it would still be some years before the centrifuge was ready for commercial application, present planning had to proceed on the basis of the gaseous diffusion method. At the end of the luncheon Mr. Matsune said that he had found a great deal that he agreed with in Australian ideas. He hoped that such contact could be maintained and views exchanged on a more frequent basis.

[matter omitted]

[NAA: A1838, 720/4/9 part 2]