March 27, 2008: 11:38 AM EDT
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Nuclear power's white-hot metal

To become fuel, raw uranium is concentrated into a curry-like powder called yellowcake, then converted to a gas, uranium hexafluoride, and enriched to contain more of its most volatile molecular component, U235. Finally it is compressed into fuel pellets the size of Bubble Yum pieces that contain enough energy to power a modern home for a year. Each step ratchets up the technology, licenses, and security needed to operate. Kazakhstan doesn't have a conversion plant yet, so it sends trainloads of yellowcake to Russia and China for processing before it is shipped to France for enrichment and then to other countries for use in reactors.

At Tortkuduk, one of two mines run by Areva's Katco joint venture, temperatures are pushing 115 degrees, and the wind has kicked the pale-yellow sand into drifts. Pipes crisscross the desert minefield like cracks in a sheet of glass. Some 2,000 feet underground an ancient shoreline deposited a vein of uranium-rich sandstone like a ring of dirt in a bathtub. The liquefication process used to get it to the surface is relatively clean compared with digging an open pit. There are no tailings, little waste, and minimal ground disturbance. But that's not to say that environmental impact underground, where the sulfuric acid can affect water tables, isn't worrisome. Plant managers say clay layers seal off the mined area surrounding aquifers, but rivers also run through the region, and though the foreign companies share environmental-testing data, the dozens of older mines run by Kazatomprom are less transparent, making it impossible to know what might be going wrong. "There is no access to information," says Sergei Kuratov, president of a local environmental organization called Green Salvation. "There is no access to trust."

Deep in the sun-baked hills on the Kyrgyz border is an oasis - a cavity mined out of a mountaintop that has since become an idyllic aquamarine lake. A feeble fence surrounds the site, and despite a rusted sign bearing a radiation symbol, 20 or so children are splashing about. "This isn't the dangerous place," says Mukhtar Anikbaev, whose parents worked the mine and whose children now swim in it. He points a few hundred feet away to an old tunnel entrance just above water level. "Those are the places with the highest level of radiation - they are better not to visit."

The lake and the nearby mining town of Kurday were the first uranium sites in Kazakhstan and one component of the nuclear legacy left to this Central Asian country when the Soviet Union broke apart in 1991. Kazakhstan was the linchpin of a nuclear Russia. From 1949 to 1989 more than 470 above-ground nuclear bomb tests were conducted in its northeast, leaving behind a swath of radiation illness affecting an estimated 10% of the country's 15 million people. After perestroika, Kazakhstan inherited more than 1,300 warheads - enough, had it not surrendered them to the U.S., to make it the fourth-largest nuclear power in the world. It also inherited 600 million tons of nuclear waste.

That the retreating Soviets also abandoned one of the largest uranium deposits in the world was of little consolation until Dzhakishev showed up to raise the industry from the dead. Nobody was building weapons in the 1990s, and accidents at Chernobyl and Pennsylvania's Three Mile Island had brought growth in the nuclear energy industry to a halt. To mine uranium in those days cost far more than its market price - if you could find a market at all. Kazakhstan was roiled by a depression that followed the collapse of the communist system, and towns like Kurday were mostly shuttered. The workers there, Anikbaev says, began to die from lung, liver, and stomach cancer. But those who survived never stopped pleading for the uranium industry and the jobs it brought to come back.

Dzhakishev could be their savior. He is of the idealist generation President Nazarbayev pumped into government in the late 1990s to bring vitality and ambition to the stalled country. At first, says Dzhakishev, "it was absolute terror." Just 3% of his production was booked. He cut costs, closed plants, and embraced a lean management ethic that ran against the socialist grain. In 1998 the Russians bartered for their uranium with butter. In 2006, the most recent year for which data are available, Dzhakishev says, Kazatomprom posted profits of $500 million.

At the heart of his growth philosophy has been the premise that Kazakhstan could build on its resources, not just sell them off. Dzhakishev has been sparing in his joint ventures and kept roughly half-ownership, avoiding the kind of colonial dynamic that often plagues resource-rich countries and that has left Kazakhstan with a small fraction of the revenues from its thriving oil industry. Kazatomprom's partners in turn provide processing technology and management skill. The strategy has left Dzhakishev flush with cash and leverage. "There's a long line at the border," says Michael Wilson, a lawyer in Almaty who represents Japanese and other interests trying to come to Kazakhstan. "Now everyone wants in."

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