"Yellow Cake" Cheaper than Chocolate! Nuclear Advertising in Critical Days

As tensions rise in the political relations of the Islamic Republic with the European Union and the expectation of a statement from the EU regarding Iran's role in regional crises and its missile programs, on Wednesday, a report of the transfer of 30 tons of "yellow cake" from the Ardakan factory to the Isfahan nuclear facilities, along with promotional images, was widely published in domestic media. The European Union is under pressure from the United States to refrain from establishing a special financial mechanism "SPV" that could bypass U.S. sanctions against Iran, while also facing indirect threats from Iran regarding its potential withdrawal from the 2015 nuclear agreement with the so-called 5+1 group. The EU has adopted a dual solution. The "mutually acceptable" solution includes the nominal announcement of a diluted special mechanism for continuing trade with Iran, named "INSTEX," while also taking a critical stance on Tehran's role in threatening regional security and pursuing its missile programs, in order to support U.S. policies towards Tehran. On the eve of the 40th anniversary of the revolution, and in a situation where domestic discontent and external pressures have put the Islamic Republic in a vulnerable position, "resorting to displays of power" and having the upper hand in confronting difficulties and threats is a policy that Tehran's officials have agreed upon. The announcement of the production and transfer of the second shipment of yellow cake from Ardakan to the nuclear facilities in Isfahan, one day before the unofficial reports about the possibility of the nominal establishment of the special financial mechanism during the meeting of European foreign ministers on Thursday, is a drumbeat of this policy. The production of uranium gas for enrichment to the necessary level, and then its conversion to metal, with explosive or fuel capabilities, is one of the first steps in having a nuclear fuel cycle, and the production of yellow cake (Urania) is a preliminary process before producing uranium gas. Before the revolution (about 43 years ago), Iran purchased 500 tons of yellow cake from South Africa for laboratory use, and after signing the 2015 nuclear agreement and delivering enriched uranium exceeding the permitted 300 kilograms to Russia, the latter delivered 230 tons of yellow cake from Kazakhstan in two phases to Iran. The Ardakan factory, which apparently was built to convert domestically produced uranium ore into yellow cake, is small, with an annual production capacity of about 67 tons. The price of each kilogram of yellow cake (considering its purity and quality) fluctuates between $25 and $60 in the market, and in recent years this price fluctuation has been more pronounced. The value of the 30-ton shipment of yellow cake produced, which is apparently considered the product of six months of work at the Ardakan factory, is even at a price between one and a half to a maximum of two million dollars. The price of a kilogram of high-quality chocolate in the market is about $60 to $70, and with this comparison, it can be seen that the price of the product for which extensive media advertising has been conducted (yellow cake) is less than the value of the production of an equivalent domestic candy factory. At this stage, where the "establishment of the special financial mechanism" has only a media and unofficial form, it is not easy to judge its functionality and real impact for Iran. At the same time, considering the constraints and limited operational capabilities of the new mechanism, if it is established in the future, its importance and real value will not exceed that of Iran's produced "yellow cake"! The European special mechanism, under any name, is an untested structure for providing a kind of financial immunity and facilitating transactions for companies that will trade with Iran. The most significant problem facing this mechanism is the nature of the free economy in Europe, where large companies prefer to operate in the large U.S. market compared to the very small Iranian market, and the inability of European governments to compel private companies to continue trading with Iran. As a result, only those companies willing to continue trading with Iran will remain, which sell food and agricultural products or are small and not interested in entering the U.S. market. Larger companies that previously left Iran will not return with the announcement of the establishment of the special mechanism, which is still unclear in its operation but seems to involve providing guarantees from European governments, calculating trade with Iran in a special fund on a parity basis, and making payments through the central bank without having the right to use dollars. The clear opposition of the U.S. to any European action to bypass sanctions will not make the responsibility of the designers of the special mechanism and its operators any easier, as several European countries have previously even refused to host it. Thus, the European financial mechanism or INSTEX, if announced and "established," will be a toothless lion whose efficiency and real value will not exceed the importance of the yellow cake produced at the Ardakan factory and the shipment to the Isfahan nuclear facilities—a reality that the officials of the Islamic Republic are fully aware of!