Group backed by US magnates offers 50 mln dollar atom fund

VIENNA, Sep 19 (Reuters) A nuclear disarmament group backed by two US billionaires pledged 50 million dollar today to help create a reserve of enriched uranium for states seeking atomic energy.

The move came at a UN nuclear watchdog debate on a global atomic fuel bank. Many say this is a good idea in theory but argue that in practice a few states could control supply and deny others the right to their own enrichment programmes.

Former US Senator Sam Nunn, head of the Nuclear Threat Initiative, said the grant aimed to help nations develop nuclear energy while deterring pursuit of the enrichment know-how which can be used to develop atom bombs.

''It's up to (states considering national enrichment programmes) to make a sovereign choice. But want to give them a second choice viable in terms of efficient economies and security (of supply),'' Nunn told a news conference.

''If everyone exercised their sovereign rights (to enrichment technology), this will be a world not many of us will want to live in,'' he said.

The NTI pledge is financially backed by US billionaires Ted Turner, co-chairman of the group, and Warren Buffett.

The issue of enrichment is at the heart of the current diplomatic standoff over Iran. Iran faces possible UN sanctions for ignoring a deadline to halt uranium enrichment by the end of last month.

Iran says its nuclear activities are only to produce electricity and not for developing nuclear weapons.

BIG STEP FORWARD Nunn said the money would go to the International Atomic Energy Agency and hinge on IAEA action to secure a 100 million dollar contribution, or an equivalent amount of low-enriched uranium (LEU), from IAEA member countries.

He said 150 million dollar would cover enough LEU to run the core of one 1,000 megawatt nuclear reactor for a three-year cycle.

This reserve would represent less than one per cent of annual world demand. But IAEA director Mohamed ElBaradei called the proposal a big step forward in troubled efforts to restrain the spread of volatile enrichment technology to unstable regions.

In one of several fuel bank proposals under debate at the IAEA this week, six developed states want the IAEA to administer a reserve of enriched uranium furnished by them and available to nations who give up their own enrichment industries.

But diplomats said the offer from the United States, Russia, Britain, Germany, France and the Netherlands would effectively control nuclear fuel supply and had backfired because of widespread perceptions it is discriminatory.

Six nations -- Australia, Canada, Ukraine, South Africa, Kazakhstan and Argentina -- not pleased with the US-led plan have since raised the prospect of enriching uranium themselves.

''The deep problem here is distrust. We don't trust Iran, and (developing nations) don't trust the West, especially the US,'' said a Western diplomat. ''For prestige, weaponisation or energy independence, nations go to enrichment and waste resources.'' REUTERS PR PM2039