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U.S., Russia Offer Iran Talks on Fuel for Reactor, Lavrov Says

June 29 (Bloomberg) -- Russia and the U.S. offered to hold talks with Iran on the provision of nuclear fuel for its Tehran medical reactor, Russian Foreign Minister Sergei Lavrov said.

Iran wants to enrich uranium to the 20 percent concentration needed for a reactor because it hasn’t been able to get imported fuel, Lavrov told reporters today in Jerusalem. Iran said today it will continue to enrich uranium to 20 percent for the reactor, though only when needed. The United Nations Security Council imposed a fourth round of sanctions on Iran June 9 over its nuclear development.

“I very much hope that Iran will agree to this and this will give an opportunity to prevent the deterioration of the situation,” Lavrov said. Russia and the U.S. consulted the UN’s International Atomic Energy Agency before proposing the negotiations, which are aimed at eliminating the need for Iran to enrich its own uranium, he said.

The Security Council left open the possibility of diplomatic talks to resolve the impasse over Iran’s nuclear program after imposing the latest sanctions. Iran rejects allegations that the atomic work may be hiding a weapons program, saying the technology is for civilian purposes such as power generation and the production of medical isotopes. It has rebuffed Security Council demands to suspend uranium enrichment.

“The fuel of 20 percent concentration has a specific use,” Iranian Foreign Minister Manouchehr Mottaki was cited as saying today by the state-run Islamic Republic News Agency. “We will produce it when we need it, and will stop production when we don’t.”

Nuclear Trade

The sanctions prohibit nuclear trade with Iran except where Iran can prove to the UN that the transactions aren’t intended for activities banned under the international Non-Proliferation Treaty.

President Mahmoud Ahmadinejad said yesterday in a televised news conference that his country prefers to buy fuel for the Tehran reactor because enrichment to 20 percent is costly. Four new reactors are being designed, he said, without elaborating.

By September 2011, Iran will begin operating a plant to convert its 20 percent uranium into fuel to run the Tehran reactor, Vice President Ali Akbar Salehi, who heads Iran’s atomic agency, said June 23. Under a proposed international deal brokered by Turkey and Brazil on May 17, Iran had said it would swap some of its 3.5 percent-enriched uranium for imported fuel to run the reactor.

While Iran has proved it can enrich uranium to 20 percent, it doesn’t own the patented technology needed to package the heavy metal for use inside the Tehran reactor. The uranium needs to be put inside unique fuel panels that fit the reactor, built by San Diego, California-based General Atomics in 1967.

Iran’s timeline for a plant to produce its own fuel panels is “rather optimistic,” and the reactor may run out before an Iranian-made supply is available, Paul Ingram, executive director of the London-based British American Security Information Council, said in a June 23 phone interview.

To contact the reporters on this story: Ali Sheikholeslami in London at alis2@bloomberg.net; Gwen Ackerman at gackerman@bloomberg.net.

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net.

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