RUSSIA-BURMA NUCLEAR INTELLIGENCE REPORT

By Roland Watson
June 26, 2008

We have new, disturbing, and detailed intelligence about the assistance Russia is providing Burma’s
dictatorship, the State Peace and Development Council (SPDC), on its nuclear program and more generally
its military modernization. This new information both confirms earlier intelligence that we have published,
and expands what is known about the overall program.

Nuclear reactor and uranium mining

It has been widely reported that Russia is going to provide Burma a nuclear reactor, for so-called
“research” purposes. We have received information that the SPDC has now purchased the 10 MW reactor.
It is not new, but is reportedly in good condition. It is being dismantled, transported to Burma, and rebuilt.
While we cannot confirm that it has arrived, our sources say that installation is due to be completed by
December this year. (We have previously reported that North Korean technicians will assist with the
construction.)

The reactor will be built at a site some ten kilometers from Kyauk Pa Toe (aka Kyauk Pha Htoe), in Tha
Beik Kyin township, approximately one hundred kilometers north of Mandalay near the Irrawaddy River.

In return for the reactor and other services, a Russian government mining company has received
concessions to mine gold, titanium and uranium. There are two gold mining sites: in Kyauk Pa Toe; and in
the mountains to the right of the Thazi-Shwe Nyaung railway line from Mandalay Division to Southern
Shan State in the Pyin Nyaung area.

Titanium is also being mined, or derived from the same ore, at Kyauk Pa Toe.

Uranium is being mined at three locations: in the Pegu-Yoma mountain range in Pauk Kaung Township of
Prome District (aka Pyi); in the Paing Ngort area in Mo Meik Township in Shan State; and at Kyauk Pa
Toe.

The reactor site has been chosen because of its proximity to the Tha Beik Kyin and Mo Meik uranium
mines. It is likely that the gold mining operation at the former will be used as cover, to conceal the nuclear
facilities.

We have previously reported, from different sources, that the SPDC has a yellowcake mill somewhere in
the Tha Beik Kyin area. Now we know the exact location (or at least enough information to find it with
satellite imagery).

The reactor has been publicized as being for research purposes, meaning research on nuclear power
generation. We believe that the SPDC has no real interest in generating electricity, or at best that this is a
secondary consideration, and that the primary purpose is atomic weapons development. Our sources say
that the SPDC expects to have full nuclear capability within ten years.

Russia is presumably supplying the reactor fuel as well. While Burma has uranium ore, and mills to convert
it to yellowcake, this must be enriched to create the fuel, typically using cascades of gas centrifuges. We
have received one report that the SPDC has begun a centrifuge program, at the South Nawin Dam, but this
is unconfirmed. Barring this operation, the source of the fuel therefore must be Russia.

Note: Locating the reactor at Kyauk Pa Toe really only makes sense if there are plans to build an
enrichment facility there. This way you would have the full industrial cycle in close proximity: mine, mill,
enrichment, and reactor.

What is perhaps most disturbing about Russia’s program with the SPDC is that it is identical to the Soviet
Union’s assistance that propelled North Korea to become a nuclear power. Why, with the end of the Soviet
Union and the Cold War, is Russia still helping rogue regimes proliferate? The surface answer of course is
money, in this case in the form of natural resources, but the deeper question remains. Russia is considered
to be a democracy. What would the people of the country think of their leaders giving such help to the likes
of the SPDC and Than Shwe?

In 1965, the Soviet Union gave North Korea a 2 MW reactor, which was upgraded in 1973 to 8 MW. It also
supplied fuel through at least this period. North Korea then went on to construct a much larger reactor, and
in the 1980s began weapons development. This included building separation facilities to obtain plutonium,
and high explosives detonation tests. (We have received reports that the SPDC has already conducted such
tests, in the Setkhya Mountains, aka Sa Kyin Mountains, southeast of Mandalay.) At some point North
Korea also began its own uranium enrichment program, to produce weapons grade material, and the U.S.
confronted the country about this in 2002. This means that the North has two different sources of fissile
material for weapons, reactor plutonium and enriched uranium.

The North detonated a small atomic weapon, with a yield of less than one kiloton, in October 2006, using
some of its plutonium. It is now reportedly about to disclose its nuclear assets, and also destroy its
plutonium producing reactor, but the sticking point has been the enriched uranium. The North appears
unwilling to discuss this (and at this point to disclose its weapons cache), which means that even with the
destruction of the reactor and the plutonium stockpile (for the latter the size of which is subject to serious
dispute), the North would retain the ability to produce weapons with the uranium. At the moment the U.S.
appears willing to accept partial disclosure, i.e., of only the plutonium.

In addition to Russia, North Korean technicians have been helping Burma with its nuclear ambitions (and
other weapons programs), and we have received information that the SPDC has given the North refined
uranium in return, which may be destined for the enrichment program.

This is all very disturbing, all the more so because of the apparent weakness of the Bush Administration,
which has been unwilling to press the North, and which refuses even to mention Burma (its nuclear
program). It took North Korea forty years before it detonated a weapon. It will likely take the SPDC only a
fraction of this period. Once the Burmese junta has atomic weapons, its rule will be entrenched, and its
neighbors, foremost Thailand, will be seriously endangered.

Precision-guided munitions

We have also previously reported that Burma has a wide variety of missile installations, including large
quantities of land-based SAMs; ship-launched missiles, both surface to air and surface to surface; weapons
for its MIG 29s; and even short range ballistic missiles. We have now received information that while
Burma formerly bought anti-aircraft weapons from the Ukraine, in 2007 it purchased four shiploads of such
weapons from Russia. We have also learned that the SPDC has multi-tube mechanized rocket launchers
from North Korea. (Note: these may be for use with the ballistic missiles, and if so they confirm our earlier
intelligence.)

Moreover, Burma is researching the production of guided missiles, and with Russian assistance intends to
build a rocket factory in Thazi Township. This will mark the latest step in a well-recognized proliferation
of Russian precision-guided munitions in the Asia Pacific region. This class of weapons includes surface to
air, to attack jets, and surface to surface to attack land-based targets and also ships. Cruise missiles fall
within the category. We do not know which specific PGMs the factory intends to produce, only that they
will be medium range guided rockets and that production is scheduled to begin within five years.

It is clear that the SPDC is intent on developing a strong defense against an international intervention,
including foreign jets, helicopters and ships. Perhaps one reason why the U.S. and the French balked at
dropping relief supplies following Cyclone Nargis was the risk of missile attack on their helicopters and
ships.

Military modernization
We have previously noted that the Burma Army is weapons-deficient. It is clear that the extensive
procurement program underway with Russia, as well as China, North Korea and others, is intended to
rectify this. During the era of Ne Win and the BSPP (Burma Socialist Program Party), the junta established
six weapons production facilities. There are now twenty-two, and clearly more are planned.

Coupled with the materiel acquisitions is a major educational program. There are more than 5,000 State
Scholars in Russia, all of whom passed their Defense Services Academy class, a nine-month program in the
Russian language, and an entrance exam in their specialty. (This is an increase from the 3,000 we
previously reported.) They are candidates for either a masters (2 years) or doctorate (4 years – we
previously reported 3 years for this degree). They study in Moscow or St. Petersburg, in the former in a
suburb at the Moscow Air Institute. There are additional State Scholars from Burma in China, North Korea,
Pakistan and India.

One of the more recent groups of scholars, Batch Seven, included 1,100 DSA officers. Their majors are as
follows:

250 Nuclear science

100 Tunneling science
200 Rockets
100 Electronics
200 Computer science
100 Aircraft construction
150 Artillery

The students also learn other military subjects, including: tanks; maintenance; anti-aircraft training;
ammunition production; fighter pilot training; naval craft construction; naval craft captaincy; and anti-
terrorist training.

While it is clear that the overall modernization program will improve the SPDC’s preparedness against
attack, the junta still has a significant problem with soldier morale. Many of the state scholars, who are an
elite in the Tatmadaw, are not motivated and would seek asylum given the chance. Their stipends barely
cover their expenses. The Russian language and their training programs are difficult. They are overworked
and separated from the civilian population. Their visas prohibit them from buying air, train or long-distance
bus tickets. When they return to Burma, some are used as Russian language teachers or as instructors at the
SPDC’s Central Research and Training Unit, but many are sent to the front lines.

As an example, in January this year one scholar fled to the border of Finland, but was arrested by Russian
intelligence agents when he used his cell phone to call his contact on the other side. There is widespread
dissatisfaction at all levels within the SPDC, except perhaps the very top – although there is reportedly a
split there as well, between Than Shwe and Maung Aye. While the new weapons systems improve the
junta’s defense against an intervention, they still need operators. The SPDC is poised to fall, through an
internal coup, and it is subject to a renewed popular uprising as well.

Acquiring a nuclear weapon would alter this equation somewhat, but really only by creating a new defense
against an intervention, and this is as yet some years away, unless the SPDC acquires a warhead directly
from North Korea. Still, any such development has to be prevented, which raises the question, yet again:
what is the U.S. doing? Under geopolitical realism, the only concerns are national interests. On a
superficial level, for the U.S. and Burma, these are limited to Chevron’s investment in Burma’s natural gas
production and pipelines. A secondary interest is the concern of U.S. citizens of Burmese origin, but since
this group is small it can effectively be ignored. It would seem, therefore, that all the Administration bluster
notwithstanding, its only real policy objective for Burma is to protect Chevron, which corporation to bolster
its case also makes large campaign donations.

The real direct national interest of the United States is to deny Burma nuclear weapons. It is not only North
Korea, Iran and Syria that America (and the world) must contain. Having a nuclear-armed SPDC is an
unacceptable risk. This trumps the need to assist a domestic corporation. Further, since Chevron is also a
major cash source for the junta, which uses money as well as the direct transfer of natural resources to pay
its weapons suppliers, it demands that the company be f