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Iran to Expand Nuclear-Fuel Capacity After West’s UN Rebuke

(IAEA data compiled by Bloomberg)

(Bloomberg) -- Iran said it will increase its nuclear fuel-making capacity after it was censured by the United Nations atomic watchdog, ratcheting up tensions with the West just days after it signaled a willingness to ease them.

The head of the Atomic Energy Organization of Iran, Mohammad Eslami, ordered a “significant collection” of “new and advanced” centrifuges in response to a rebuke from the UN’s International Atomic Energy Agency over Tehran’s failure to resolve a probe into uranium particles found at undeclared sites, Iran’s Foreign Ministry said in a statement.

Iran operates thousands of centrifuges that spin at high speed to separate uranium isotopes. The machines typically produce low-level reactor fuel but can be programmed to make higher concentrations of uranium suitable for a weapon. IAEA inspectors reported last week that Iran has withheld using hundreds of advanced new machines already installed.

Tehran’s move is a response to a divisive vote late Thursday by the IAEA’s board of governors to censure Iran over a years-long probe. The board also ordered agency Director General Rafael Mariano Grossi to produce a comprehensive report detailing Iran’s infractions by early next year. 

Only 19 of the board’s 35 members supported the European and US censure, with countries including Brazil, China, Indonesia, Russia and South Africa either opposing or abstaining. It came days after the Islamic Republic suggested it was ready to resolve the standoff over its atomic work by agreeing to stop enriching uranium to 60% levels, close to the level required for nuclear weapons.

Iran’s Foreign Ministry said its decision to order more centrifuges is in line with its peaceful nuclear program and its technical cooperation with the IAEA will continue. Iran “remains ready for constructive engagement with relevant parties based on international legal principles and standards,” the ministry said in its statement.

The comprehensive report that the IAEA is now expected to produce is part of a broader western initiative to potentially reimpose or “snap back” United Nations sanctions on Iran before they expire in October 2025. That diplomatic mechanism was part of the defunct nuclear deal that was abrogated by Donald Trump in 2018 and which capped Iranian nuclear activities in exchange for sanctions relief. 

“It is an elaborate approach,” Grossi said Wednesday during a press conference. “It is an approach by some to start considering the possibility of snap back.”

Mixed Signals

Before the vote, Grossi appealed to the board to exercise “prudence, collaboration and restraint.” Censure risked sending mixed signals to Iran, which “for the first time” had unconditionally pledged to stop enriching uranium close to the levels required for weapons, he said.

Moreover, Grossi warned that applying too much pressure on Iran at the wrong time could eventually damage a bedrock arms-control agreement by leading Iran to consider leaving the nuclear Non-Proliferation Treaty. During a trip to Tehran earlier this month he noted that those discussions are already taking place, albeit not yet at the executive level. 

Iran still has enough fuel on hand to produce a handful of warheads, the IAEA said, giving it room to maneuver should its leadership make a political decision to move forward with nuclear armament. Inspectors have lost “continuity of knowledge” over key parts of the Islamic Republic’s nuclear work, which would need to be restored as part of a broader deal to control and oversee activities, they said. 

Iran’s attempt at compromise was seen by some as an olive branch toward the incoming Trump administration. Now, with the IAEA on the clock to produce a report that can be used to revive UN sanctions, Trump has the potential to inflict more pain on the Persian Gulf nation’s economy than he did during his first term. 

(Updates with vote details, IAEA report and Grossi quote from the third paragraph.)

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