Iran Signs Russia Reactor Deal as Nuclear Talks Falter

Iran signed an agreement with Russia to obtain as many as eight new reactors, as world powers struggle to reach an accord capping the Islamic Republic’s nuclear program.

The deal was signed in Moscow yesterday by Ali Akbar Salehi, head of Iran’s Atomic Energy Organization, and Sergei Kiriyenko, the chief executive of Rosatom Corp. It calls for Russia to expand the existing Bushehr plant with two new reactors and an option for two more there and four elsewhere, according to Rosatom. Further details weren’t immediately available.

The announcement of the deal, which shows Iranian planning for an expanded nuclear industry, came as the latest talks between U.S., European and Iranian diplomats in Oman were wrapping up without any progress being reported. Negotiators have set a target of reaching a final accord by Nov. 24 that will set limits on Iran’s nuclear program, and ease the international sanctions that have squeezed its economy.

Russia is one of the six world powers engaged in the talks with Iran. Its relations with the U.S. and European Union have soured in recent months over Russian support for separatists in Ukraine, raising concerns that it may become harder to preserve unity among Iran’s interlocutors.

A concluding round of talks at the foreign-minister level is scheduled to start on Nov. 18 in Vienna. The process “will be set back another two years” if a final deal isn’t reached by the Nov. 24 deadline, German Foreign Minister Frank-Walter Steinmeier said yesterday.

‘Money Pit’

It’s too early to say what yesterday’s accord with Rosatom will mean in practice, according to Karim Sadjadpour, an Iran specialist at the Carnegie Endowment for International Peace in Washington.

“It took the Russians two decades to build the Bushehr reactor, which has been a multi-billion dollar money pit for Iran and remains a major safety concern,” he said.

Salehi hailed the accord as “a turning point in the relations between our countries,” according to Russia’s Tass news agency. He said the construction of new plants will start in the current Iranian year, which ends in March. Iran has plans to generate 20,000 megawatts of electricity from nuclear energy, Salehi said.

Fuel for the future reactors will be provided by Russia during the whole life cycle of the new reactors, Iranian news agency Tasnim news agency reported. Spent fuel will be returned for processing and storage, it said.

Iran’s right to enrich uranium itself for its reactors is one of the key areas still in dispute in the nuclear talks.

Before it's here, it's on the Bloomberg Terminal.