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The Austrian connection.

AUSTRIA'S STATE-OWNED Voest Alpine group supplied some of the most crucial equipment and materials Saddam Hussain's atomic weapons programme, although the company says that it had no idea what its goods would be used for.

The Vienna-based International Atomic Energy Agency (IAEA) has known since 1991 that Voest-Alpine supplied components for giant magnets used in one part of Saddam's A-bomb project. Now it has been established that Bohler Edelstahl of Kapfenberg (100 kms from Graz), which at the time was a Voest-Alpine subsidiary, supplied 100 tonnes of special steel crucial to another part of the Iraqi programme.

In both cases, the goods were shipped to Iraq by sea. In the case involving Bohler, the deal was negotiated by a middleman in the leafy south west London district of Wimbledon - more usually associated with tennis than with the trade in nuclear-related materials.

In the wake of October's "mini-crisis" over Kuwait, international attention is refocusing on Saddam's nuclear potential. Although UN weapons inspectors have dismantled the main elements of the A-bomb project, this does not mean that it could never be revived. In a recent report to Congress the US Arms Control and Disarmament Agency (a State Department body) said: "Iraq is believed to retain equipment, technology and materials relevant to its (nuclear) weapons programme".

The report added: "The US believes Baghdad is continuing its effort to circumvent inspections and preserve as much nuclear related technology as possible for a renewed weapons effort."

The Iraqis planned to build a bomb which used highly enriched uranium (rather than plutonium) as its fissile material. The biggest challenge for Baghdad was how to convert natural uranium, only about 0.7% of which comprises the fissile isotope U-235, to a metal containing the required 90% of this isotope.

The two most commonly used ways of achieving this both employ uranium hexafluoride gas as the raw material. The so-called electro-magnetic isotope separation (EMIS) method involves passing the gas through huge magnets. It was the EMIS technique that was used to produce the bomb dropped on Hiroshima in 1945.

The second, and more modern, technique is far more efficient. It involves spinning the gas in ultra-high speed centrifuges. In full-scale production, hundreds of centrifuges are linked in a so-called "cascade". To withstand the strain of spinning, the centrifuges must be machined very precisely, and their main components must be made either from carbon fibre or from so called "maraging steel". This is a steel of high tensile strength which, apart from nuclear applications, is widely used in military and aerospace engineering.

The UN Security Council has mandated the IAEA to oversee the destruction of the Iraqi nuclear weapons programme, and since the Gulf War ceasefire has organised a series of inspection missions to Iraq. These have established that the Iraqis were pursuing both the EMIS and centrifuge routes to enriched uranium.

They had made most progress with the EMIS system. By the time of the Gulf crisis one EMIS facility at Tarmiya, about 24 kms north of Baghdad, was close to being commissioned. A second was being built at Ash Sharqat, about midway between Baghdad and the northern city of Mosul. Working at full capacity, each might have produced up to 15 kgs of highly enriched uranium per year. About 25 kgs is required to make a single atomic bomb.

At the time of the Gulf crisis, the Iraqis were still building the facilities for the manufacturer of their own uranium enrichment centrifuges. The project was code-named Al Furat and the main focus of activity was a complex sited 20 kms south of Baghdad. The aim was to have a 100-centrifuge "cascade" in operation by 1993, to be followed by a 500-machine cascade in 1996. The Al Furat facility might have had an eventual production capacity of over 2,000 centrifuges per year. For the Iraqis to have produced 25 kms per year of weapons-grade uranium, they would have needed a cascade of between 1,600 and 2,000 centrifuges. The consensus is that they would not have been able to produce in such volumes until the late 1990s.

Voest-Alpine's name first emerged during an IAEA mission in November 1991. The official report of the mission, which has been made public, said that "the casting and rough machining of large iron components for the EMIS programme was done at foundries outside Europe."

It continued: "A large west European foundry received an order from the Iraqi State Electric Establishment for six pieces which were produced at the foundry and shipped directly to Iraq. At about the same time the foundry received an order from a European company for 28 large iron pieces. Six of them had specifications identical to those of the pieces produced for the Iraqi State Electric Establishment.

"These pieces were in the (IAEA) team's opinion pre-machined cores for the 1,200mm double pole magnets installed or destined for installation at Tarmiya."

The IAEA report includes an engineering diagramme "provided to the IAEA by the foundry's management". It is noted that: "The foundry shipped the components to a seaport in Germany where they were redirected to their final destination."

As long ago as spring 1992 the scholarly Bulletin of the Atomic Scientists carried a little-noticed analysis of Saddam's nuclear programme. This identified Voest-Alpine as "the foundry" in the IAEA report on the November 1991 inspection mission. Western officials have confirmed to The Middle East that the Austrian company did indeed produce the EMIS components, although they add that the company did not know that the items were for use in an atomic bomb project.

This year, it has emerged that the Voest-Alpine group, and specifically Bohler Edelstahl of Kapfenberg, was also unwittingly playing a central role in Iraqi's centrifuge enrichment programme. The state-owned company (which today is a subsidiary of Austrian Industries) provided 100 tonnes of the crucial maraging steel with which Iraq planned to manufacture its centrifuges.

That the steel had arrived in Iraq was discovered during an IAEA inspection visit to Iraq in January 1992. The mission's report noted that the Iraqis had confirmed their acquisition of "100 tonnes of 350-grade maraging steel (material sufficient for approximately 5,000 centrifuges)".

The report also noted that in 1991, after the Gulf war, the Iraqis had degraded this steel by re-smelting it, making it unusable for the manufacture of centrifuges. Just to make sure, the IAEA inspectors ordered that it should be melted down again, this time under their supervision, and mixed with lower grade carbon steel.

For a long time, the Iraqis resolutely declined to tell the IAEA anything about the origin of the maraging steel. On 9 October 1993, however, they relented, but would say only that a "Mr Malik" had arranged the supply and that the negotiations had been conducted in London.

In Western capitals, a hunt was launched for the mysterious Mr Malik and for the company which manufactured the maraging steel. It has now been established that "Mr Malik" is one Mazhar Mall, an engineer who lives in Wimbledon; that it was Development and Technology Enterprises Lid, a small import-export firm controlled by Mall, which arranged the transaction; and that the steel came in mid-1989 from Bohler Edelstahl, which at the time was a Voest-Alpine subsidiary.

Mali is not anxious to discuss the matter. Contacted by telephone he denied all knowledge of any steel transaction involving Iraq, Asked why the Iraqis had named him as the broker, he snapped, "I don't know," and then slammed down the telephone receiver.

Such sensitivity is certainly now warranted by the legal position. As the maraging steel was not shipped from the United Kingdom, Mall did not violate any British export controls. He was not an exporter; simply a "fixer".

It was not even his company which placed the order. This was done in the name of the London branch of a company named Euro-Com Inc. The address Euro-Com gave to the Austrian steel company, however, is the same as that of Malik's home. Later, the Austrians were told that Euro-Com's office in the Saudi Arabian capital, Riyadh, was the customer. No trace has yet been found of a Saudi-registered firm of that name. The ultimate consignee was Iraq's State Establishment for Mechanical Industries.

Jan Mienkinsky, general manager of Vienna-based Bohler International, the trading arm of the Bohler company, confirmed that the 1989 shipment had been the subject of a recent IAEA inquiry which had concluded that Bohler had not violated any export controls. At that time, the regulations governing maraging steel included a major loophole which allowed such exports to be made with ease. Bohler, meanwhile, had been instructed only to deliver the steel to Antwerp. Mienkinsky stressed: "The port of final destination was not known to our company". Mienkinsky also confirmed that the deal had been negotiated by Wimbledon's Mr Malik in 1988.

At Antwerp, a first consignment of 71 tonnes was loaded on the cargo vessel Makran on 17 May 1989. Six weeks later, on 26 June, a second shipment of 21 tonnes went aboard the Khaipur.

Bohler Edelstahl mistakenly had the impression that the steel was destined for the manufacture of machine tools in Pakistan, and this was reinforced by the fact that both vessels are owned by the Pakistan National Shipping Corporation. In the event, both sailed to Dubai, where the maraging steel was loaded onto trucks and taken overland into Iraq via Saudi Arabia. Payment for the maraging steel was made via the now defunct Bank of Credit and Commerce International (BCCI) in London, and the Osterreichisches Laenderbank in Vienna.

In Vienna, the IAEA is not prepared to discuss Mall, Bohler Edelstahl or Voest-Alpine. "When it comes to company names, we have a policy of sharing information only with the relevant national government", said a spokesman. Voest-Alpine's official spokesman declined to respond to telephoned request for comment. In London, a Foreign Office spokesman also declined to discuss the matter.

Whether or not the Iraqis really are hiding elements of their nuclear programme for use in the future is uncertain. In this regard, however, a question mark hangs over six tonnes of maraging steel which Bohler Edelstahl exported in early 1990. Again, the order was negotiated by Mall, although this time it was placed in the name of a Jersey firm, Lincoln Valley Holdings Ltd. The steel was loaded onto a Finnish cargo vessel, the Finnwood, which sailed from Hamburg in mid-February 1990. The vessel docked in the United Arab Emirates port of Fujairah on 10th March 1990. From there, it went on to Pakistan and India.

To date, no-one knows what happened to the six tonnes of maraging steel. And no-one is ruling out the possibility that it may be hidden somewhere in Iraq.
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Title Annotation:Current Affairs: Iraq
Author:George, Alan
Publication:The Middle East
Date:Dec 1, 1994
Words:1784
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