A recent report in the South African online journal Rand Daily Mail serves as another stark illustration of the way national plans for the development of nuclear energy lead to opaque, undemocratic and wasteful schemes that leave a legacy of corruption and environmental degradation. For citizens of other nations who are being tempted by nuclear sales campaigns, this report on South Africa serves as a cautionary warning or a confirmation of what has been experienced elsewhere in the past.
The report by Lily Gosam, “Zuma, the Guptas and the Russians — the inside story,” was published on February 9, 2016 in the Rand Daily Mail. It is a very lengthy and detailed 10,000-word report followed by 310 footnotes, so there are probably many readers who would prefer to have a summary of the salient points. Readers who want the full report can follow the link to it and the find the references cited therein.
This report sets aside questions about the ecological impact of nuclear energy or whether it has a role to play as an alternative to fossil fuel. It dwells only on the issues of its economic feasibility and its impact on political transparency and democracy, and from this perspective the writer concludes that the plan to install 9,600 MW of nuclear power is an extremely flawed energy policy and an invitation to future economic and social disaster.
Lily Gosam, “Zuma, the Guptas and the Russians — the inside story,” Rand Daily Mail, February 9, 2016
Key points from the article, discussion:
The summary below has been compiled with copied and paraphrased segments of the article cited above. Segments not derived from the article are specifically indicated. For the article’s sources, see the full version published by Rand Daily Mail.
On December 9th., 2015 president Jacob Zuma fired his finance minister, Nhlanhla Nene. In his place he installed David van Rooyen, a treasury outsider lacking qualifications for the post.
This piece is not about arguing the merits or demerits of nuclear energy. It is about whether Zuma’s decision for nuclear energy is based on sound economic principles for the good of the country.
Zuma’s cabinet has approved the 9,600 MW nuclear procurement program. In March 2016, it will announce a plan to build 6 to 8 nuclear reactors, at an estimated cost of between R800-billion and R1.6-trillion ($50-billion to $100 billion).
Observers note that Zuma wants the nuclear program to be one of his “presidential legacy projects.” It has been said that the program is being implemented from a purely patronage point of view.
There have been secret meetings; undisclosed documents and classified financial reports; deceit; aggressive campaigning; damage control exercises; illegality; use of Apartheid (‘national key-point’) legislation; sidestepping of technical and financial oversight; destruction of oversight organs of state; disregarding of industry experts; refusal of public consultation; ignoring of the ANC’s national executive committee (NEC) and ANC resolutions; and the removal of any government opponents, the most notable of whom was Nene.
Russia is Zuma’s “preferred partner.” Over the past five years, Rosatom has come to dominate the global market in nuclear energy, seeking out agreements and contracts with roughly 30 nations. Nuclear power plants in foreign countries serve diplomatic functions that bring those nations into the supplier’s sphere of strategic interests. They are much more than simple bilateral infrastructure projects.
Rosatom is a cross between a state organization and a private-owned company, and it has been called a breeding ground for abusive practices. Ecodefense and Transparency International (Russia) conducted a study into Rosatom and found that 83 out of 200 (41%) of Rosatom’s purchasing contracts had violated the company’s own procurement rules. The Russian nuclear industry remains under almost no external control, and it has serious unresolved waste and decommissioning issues.
The National Union of Mineworkers (NUM) in South Africa— an affiliate of Cosatu — described the nuclear energy investment as “national suicide.”
A member of the World Nuclear Association said that it was highly unlikely that Russia would succeed in carrying out even half of the projects in which it claims to be closely involved. Two independent international energy consultants conclude “the lack of realism and overblown market expectations drive nuclear companies and traditional utilities into ruin.”
The treasury under the now-dismissed Nene found initial evidence that the 9,600 MW deal was unaffordable, and these are just for “overnight costs,” which exclude finance, insurance, operational costs, conversion and enrichment, fuel manufacture and substitution, waste disposal and decommissioning.
Nevertheless, Russia will do its best to make the plan attractive. It will offer a 20-year loan repayment agreement, at low interest rates, and a grace period such that South Africa only begins to pay once a nuclear plant is operational.
Other nations are falling for the same sales pitch. The South African government was not alone in being misled by uncritically accepting over-optimistic cost forecasts made by nuclear proponents.
It has been claimed that the plan is an illegal move under the Public Sector Finance Management Act, as it contains clauses that are against the country’s national interests, is in conflict with the constitution, and leans heavily in Russia’s favor. It threatens sovereignty because energy supply will be too dependent on Russia.
The cost of electricity from nuclear power is 25% more expensive than new coal or solar photovoltaic, and 67% more expensive than wind.
The nuclear build promises to revive uranium mining in South Africa, and the president has backers with interests in this sector. The potential for abuse in extending political favors and patronage are too obvious to ignore.
In September 2014, Zuma made himself chair of the cabinet’s energy security subcommittee. The stage was thus set for an opaque “country-to-country” negotiation process, without the necessary participatory checks and balances.
There was such an outcry over Russia’s unfair advantage that the energy department tried to downplay the agreement and instituted damage control by asking other vendor countries for agreements, including the USA, South Korea, France, Japan and China, but it seemed this was just done for show when it was still a foregone conclusion that Rosatom would win the bid.
The insistence on having Russia as a preferred partner led to intense suspicion of corruption. Another point, raised not in this article by Lily Gosam, but by other critics, is that Zuma’s loyalty to Russia may be a holdover from Apartheid days when Russia, as the Soviet Union, supported Cuba and Angola in the war against Apartheid South Africa. The presence of the communist bloc in Southern Africa was instrumental in protecting ANC fighters in neighboring countries, not to mention in bringing an end to Apartheid itself. Nonetheless, this loyalty may be blinding Zuma to the fact the nuclear energy deal has nothing to do with the old battles of communism or anti-imperialism. In ideological terms, a deal with Russia and a deal with a Western supplier would both be deals with a capitalist oligarchy. Gosam noted that Zuma is being unnecessarily hostile to Western trade partners.
The approaching nuclear deal has led to speculation and rises in the stock of uranium mining companies, but there is no way to say with certainty that demand for uranium is set to increase. The future of the industry globally is too much in question to make accurate predictions about the price of uranium.
Nuclear fuel enrichment is another big part of the puzzle. In the 1970s the Apartheid government established a uranium enrichment company, which later, in 1999, was restructured to become Necsa. But actual enrichment operations ceased in 1995, and the only two conversion plants were both demolished. Much of the high-enriched uranium (HEU) is still stored away. (Some say there’s a 250kg cache). With the prospect of 9,600MW of nuclear power, local enrichment operations are again a priority.
Several African countries have expressed an interest in nuclear power plants, including Algeria, Egypt, Ghana, Kenya, Morocco, Namibia, Niger, Nigeria, Tunisia and Uganda— and they will all have uranium and enrichment requirements, and be dependent on those who provide them. South Africa may want to establish itself as the enriched uranium provider for Africa, but such a plan would obviously raise alarms in the international community because non-proliferation efforts of recent decades have been aimed at reducing the number of countries that have enrichment capabilities. In March 2012, at a Nuclear Security Summit in Seoul, Zuma stated on the subject of HEU, “…South Africa has adopted a policy on the beneficiation of our mineral resources, including uranium.” This means that SA has a policy of enriching uranium and does not want to limit its options by foreswearing the production or use of HEU. Officials explained that Zuma was not only keeping SA’s options open for producing HEU in the future, but also he was also defending the decision to hold on to the existing stock of HEU from the nuclear weapons program of the Apartheid government.
An initiative started in 2009 by United States President Barack Obama, and which is endorsed by the United Nations Security Council, has resulted in ridding HEU from 28 out of 30 Nuclear Security Summit participating countries. However, together with Belarus, South Africa under Zuma has stubbornly refused to agree to dilute or dispose of its quarter-ton cache of bomb-grade HEU left over from the Apartheid-era weapons program.
A nuclear build could be an economic stimulus because domestic companies would win contracts for providing labor and parts, but domestic suppliers may not be able to guarantee the quality and expertise that is needed to construct a nuclear power plant that will run safely. Inferior parts, with faked certificates, were found to have been used in one project in India.
The economic stimulus would appear to be a good thing, but not when government and independent studies have found nuclear to be unnecessary and unaffordable, and that it will ultimately result in 10 to 50 times higher electricity costs than consumers are paying now.
There are other points that could be added to Lily Gosam’s thorough report on this issue. As she states in her opening, she set aside the debate over whether nuclear energy is too ecologically harmful to be used anywhere. For some reason, she didn’t want to touch on the topic of heavy metal and radioactive pollution leftover from South Africa’s history of gold and uranium mining. One could approach Zuma’s nuclear proposals from the opposite perspective and write, “This piece is not about arguing the merits or demerits of nuclear energy’s economic viability. Even if it were affordable in some sense, it is about whether Zuma’s decision for nuclear energy is based on sound principles that will protect the environment and public health in the present and distant future.”
From this perspective, it is outrageous to imagine adding to the contamination that already exists. The money that would be spent on building nuclear reactors needs to be spent on simply providing clean water to hundreds of thousands of citizens who live in areas contaminated by mining operations of the past. Dr Antony Turton, a professor at the University of Free State’s Centre for Environmental Management said that Johannesburg “is undoubtedly the most uranium-contaminated city in the world.” The Cancer Association of South Africa (Cansa) says this is the only place in the world where large numbers of people live next to dumps full of uranium. There is no other place in the world where so many people live in such close proximity to high levels of radioactive waste.
Finally, it is interesting to add one more comment about this topic not covered by Lily Gosam: What accounts for the silence in the Western media over South Africa’s stockpile of HEU and Russia’s attempt to use nuclear energy to bring Africa into its strategic and economic sphere? For the past three years there has been much anti-Putin, anti-Russia reporting when it comes to coverage of Ukraine and Syria. Russia’s aggressive and successful activities in the nuclear energy sector would seem to be the perfect ammunition in the propaganda war, but the issue flies below the radar. As usual, the big nuclear powers know that no matter how much they disagree and vocally criticize each other on some matters, nuclear energy and nuclear weapons are subjects best kept from public awareness. Criticism of Rosatom’s nuclear sales campaign would only draw attention to similar efforts by Western counterparts such as GE-Hitachi, Toshiba-Westinghouse and Areva. It would raise questions about the fundamental problems of nuclear energy, no matter which nation was promoting it. It is inevitably far too costly and environmentally destructive. Better alternatives exist. Wherever it goes, opaque governance arises and anti-social and undemocratic forces gain strength.
Notes Oliver Balch, “Radioactive city: how Johannesburg’s townships are paying for its mining past,” July 6, 2015, http://www.theguardian.com/cities/2015/jul/06/radioactive-city-how-johannesburgs-townships-are-paying-for-its-mining-past .  Sipho Kings, “One man’s home is another man’s uranium dump,” Mail and Guardian, July 18, 2014, http://mg.co.za/article/2014-07-17-one-mans-home-is-another-mans-uranium-dump/&views=1&mobi=true