BRAZIL-US: THE NUCLEAR FUEL ISSUE

This intelligence memorandum from the Central Intelligence Agency (CIA) dated October 12, 1977, discusses the nuclear fuel issue between Brazil and the United States. The memorandum highlights the concerns of Brazilian leaders regarding the US commitment to provide nuclear fuel for Brazil's first nuclear power plant. It states that any delay or cancellation of the fuel shipment would negatively impact bilateral relations and President Carter's upcoming visit to Brasilia.

The memorandum mentions that while Brazil is committed to developing nuclear power plants and enrichment facilities, there is growing disagreement within official circles regarding the need for accelerated nuclear power development. Economic viability concerns are likely to result in a significant scaling down of Brazil's nuclear program.

The political concern section emphasizes that Brazilian leaders fear the US might break its contractual commitment to export enriched uranium to Brazil. They worry that this would damage relations, trigger a media campaign accusing the US of failing to honor commitments, and potentially lead to retaliatory actions by Brazil. The fuel issue played a role in Brazil's decision to renounce military accords with the US.

President Carter's visit to Brasilia is seen as crucial, and any indication that the US plans to further delay or deny the export of enriched uranium could lead to Brazil withdrawing its invitation. The Brazilian government expects reassurances regarding the fuel issue during the visit.

President Geisel of Brazil is politically committed to discussing the perceived US efforts to prevent Brazil from obtaining sensitive nuclear technology with President Carter. Brazil views acquiring a full nuclear fuel cycle as a high priority objective.

The memorandum also mentions Brazil's economic rationale for developing nuclear energy, citing the high cost of oil imports, which account for a significant portion of Brazil's import bill. Hydroelectric power is not fully developed, and Brazil aims to reduce dependence on imported oil and enriched uranium by investing in nuclear energy.

Regarding the treaty with West Germany, President Geisel and Foreign Minister Silveira have focused on implementing the accord for nuclear technology transfer. However, delays and construction problems have already occurred, potentially leading to further setbacks. The agreement commits Brazil to purchasing two power plants from West Germany, but financial constraints might hinder future administrations from justifying the purchase of the originally planned additional six German reactors.

Overall, the memorandum highlights the importance of the nuclear fuel issue between Brazil and the US, the potential impact on bilateral relations, and the economic and political considerations surrounding Brazil's nuclear program.