203 Record by Rotsey1 of Conversation with Imai2

Tokyo, 8 October 1974

Confidential

Japan/Enrichment Feasibility Study/Prime Minister Tanaka's Visit

Mr Imai said he had been asked to provide advice to those who would brief Prime Minister Tanaka3 for his visit to Australia, consequently had asked to see me so that he could see clarification of certain points. Imai said the first problem for the Japanese side was to understand clearly what Australia was proposing and he would be pleased if I would reiterate it.

I replied that the proposal had been made at the Ministerial Committee Meeting last year; recently Sir Lenox Hewitt4 had visited Japan and I had had the opportunity to hear from him what he considered to be the main issues. I said Sir Lenox had phrased his remarks in the following way. Firstly Japan had to decide whether a joint feasibility study on establishing an enrichment plant in Australia was to the mutual benefit of both countries. If Japan decided the answer was 'yes' the second matter was for Japan and Australia to jointly assess the technology available to them to decide if it was adequate or whether there was a gap. If they decided there was a gap the third action was to jointly decide on an approach to the US, France and URENCO.

Imai asked what was it that Australia wanted from Japan, money, technology or market? I said that as I understood it, none of those things, at present, Japan was simply invited to participate in a feasibility study. The contribution each country could make would be a matter for the feasibility study to decide. I added that of course we hoped the outcome of the feasibility study would be favourable and would lead to tangible cooperation, but the first objective was a feasibility study. Imai said he was very pleased to hear that because many Japanese had feared that in becoming involved in a feasibility study they would irrevocably commit themselves to building an enrichment plant in Australia.

[matter omitted]

In these turbulent times, Imai said, Japan wished to review the world situation and to be able to explore options. Cooperation with Australia at this time would be attractive providing it didn't commit Japan to building an enrichment plant in Australia for the time being.

Imai said another problem worrying Japan was whether in accepting the offer to participate in a feasibility study on establishing an enrichment plant in Australia Japan was effectively agreeing to receiving imports only in the form of enriched uranium. I said I did not know the policy of future exports. In relation to production in Australia I quoted Hansard (Representatives) of 26 September in which the Minister for Minerals and Energy is reported as having said a uranium milling plant capable of producing 3,500 tons per annum should be in operation in 2½ years' time.

I pointed out to Imai that from the United States the Japanese could only look forward to enrichment services not feed material; perhaps they would get a little of both from France. In Canada they could get uranium, but if the Canadians interpreted their words 'in the most advanced form' as meaning CANDU fuel elements Japan might have to think in terms of CANDU reactors. There was not much hope of supply of feed material from the URENCO countries and there were problems of security of supply from South Africa. In contrast to these situations Australia had 300,000 tons of proven resources and if enrichment facilities could be established, Australia would be in premier position to supply. I said it seemed clear to me that there was a great mutual benefit in cooperation between Japan and Australia and I couldn't see any substantial impediment to Japan exploring possibilities of future cooperation by joining Australia in a feasibility study.

Imai continued by saying there was another question which troubled Japan and he hoped it would not cause offence. He said the timescale for enrichment ventures was a long one and Japan was worried that in supporting Mr Connor and the Labor Government it might alienate the private sector in Australia and a subsequent Liberal Government should one succeed to office sometime in the future. He said the Japanese Embassy in Canberra was forwarding Hansards which related Mr Connor's statements and counter arguments from the Opposition but the Embassy had given no guidance on this question. I said there were two points to consider, firstly I believed the policy of trying to increase the value of minerals before export reflected the mood of the people of Australia and any change of government would not alter that mood. Second, I quoted part of the preamble to the Atomic Energy Agreement, 'Recognizing Japan's needs for uranium resources and Australia's desire to develop its uranium industry', I said the feasibility study which had been proposed was in accord with the sentiment expressed in the preamble and pointed out that the Atomic Energy Agreement had been negotiated whilst a Liberal Government had been in office. I said I could not see any way in which cooperation in a feasibility study on enrichment could be subsequently damaging to Japan. Imai asked how a multinational company such as RTZ5 might react. I said I did not know but I found it difficult to see on what grounds it could comment.

Imai thanked me for my answers and said he would recommend to the people who were preparing the Prime Minister's brief that Mr Tanaka could respond favourably to Australia's proposal. He added that from about 20 October people in Japan would be thinking of what wording might be used for the joint communiqué, he suggested we might meet at that time for further discussions.

I asked him what kind of response he thought Mr Tanaka would give, would it be a generalised expression of approval for the idea of a feasibility study or would it be a definite acceptance? Imai said if it were to be the latter Japan would need to know what was meant by the term feasibility study, what subjects would be included, what were the specific objectives, who would participate etc. I said I presumed the Australian Atomic Energy Commission would represent Australia in the technical discussions but I would seek information on the scope of the proposed study. Imai said that once Japan knew the scope of the study it could decide on the representation required, such as staff from PNC,6 the Enrichment and Reprocessing Group etc and would be in a better position to decide whether it could meet the requirements and so whether Mr Tanaka could give a more positive response.

He said Japan was still developing its own technology, Cascade No. 1 was operating but over the next twelve months Japan had to decide whether to continue working on three or four types of machines from different manufacturers or whether it should select one type and concentrate its efforts. With respect to a feasibility study he added the Japanese would have to consider very carefully to what extent technical information could be released from PNC.

Commenting on US efforts in the centrifuge field Imai said he thought they were still working on 15 cm diameter machines, maybe up to 20 cm diameter. Although the US had talked about large capacity machines he thought this was still a developmental area. Imai said that he was much more worried about whether the US had developed a cheap method of manufacture, particularly in the carbon fibre reinforced machines, he feared the US may have some spin off from its space program which would give them an unbeatable competitive edge.

[NAA: A1838, 720/4/9 part 12]