The Intelligence: An interview with the director of the IAEA

This episode delves into the complexities of global nuclear politics and safety, featuring an interview with Rafael Mariano Grossi, the director of the International Atomic Energy Agency (IAEA).

1. Iran's nuclear program is expanding in size and sophistication, raising significant global security concerns.
2. The IAEA faces diminishing oversight capabilities due to political tensions and regional conflicts, complicating its regulatory and safety missions.
3. Grossi's unique diplomatic position allows him to engage with global leaders, striving to stabilize nuclear compliance and safety standards.
4. The IAEA's role is crucial in managing nuclear safety in conflict zones, notably its involvement at the Zaporizhzhya nuclear plant in Ukraine.
5. Emerging nuclear deals, such as those involving the USA and Saudi Arabia, signal shifting dynamics in global nuclear energy and weaponry.

1. Introduction and Context

Jason Palmer sets the stage by outlining the episode’s focus on IAEA's efforts under Rafael Mariano Grossi’s leadership amidst growing global nuclear risks. Jason Palmer: "Irans nuclear capability just keeps rising..."

2. Global Nuclear Risks

Discussion on the increasing nuclear threats from countries like Iran and North Korea, and the IAEA's role in mitigating these risks. Shashank Joshi: "Iran's nuclear program is expanding drastically..."

3. Grossi's Diplomatic Engagements

Exploration of Grossi’s diplomatic travels and their significance in international nuclear politics. Rafael Mariano Grossi: "I think the issues that he was raising in Tehran..."

4. IAEA's Role in Ukraine

Details of Grossi's efforts to ensure nuclear safety in Ukraine, particularly at the Zaporizhzhya plant. Shashank Joshi: "Russia has been occupying the Zaporizhya nuclear power plant..."

• Stay informed about global nuclear developments and safety protocols.
• Support policies and initiatives that promote nuclear non-proliferation.
• Encourage diplomatic solutions to international conflicts involving nuclear powers.
• Advocate for the strengthening of international bodies like the IAEA.
• Participate in educational forums to understand the complexities of nuclear energy and weaponry.

The IAEA is charged with promoting the peaceful use of atomic energy. But with uncertainty in Iran and a delicate situation in Ukraine, can the organisation still keep risks under control? The world’s most important diamond company is in trouble. Could selling out save them (10:31)? And, a look at Russia’s low-tech tank defences (16:51)

People

Rafael Mariano Grossi, Shashank Joshi, Jason Palmer

Guest Name(s):

Rafael Mariano Grossi

Content Warnings:

None

Charlotte Cassaraghi
I am Charlotte Cassaraghi, and in partnership with the House of Chanel, I present to you the Les Rencontre podcast as part of the rendezvous litteraire at Rue Cambon. This podcast spotlights the birth of a female writer. You can listen to the various episodes and their authors on your preferred streaming platforms.

Jason Palmer
The Economist hello and welcome to the intelligence from the Economist. I'm Jason Palmer. And I'm Ora Okambi. Every weekday we provide a fresh perspective on the events shaping your world.

A diamond is forever behind a diamond company might not be. We look at what's been going on with de Beers, the world's most important rock flogger, why it looks to be hitting the market soon, and why it's a terrible time to try to sell it. And what on earth is a turtle tank? No, it isn't a tank top with a turtleneck. It's the Russians latest attempts to protect their vehicles from drone attacks.

Ora Okambi
But do they work?

Jason Palmer
But first, Irans nuclear capability just keeps rising. And a report from the International Atomic energy agency that was leaked yesterday has put troubling new numbers to it. These are, as we keep talking about on the show, worrisome times in the nuclear world order. And the IAEA is one of the agencies designed to maintain stability. Mostly it does what its name suggests, promoting the peaceful use of atomic energy.

That, of course, is a dual use technology. So the agencys other task is to prevent countries that only have nuclear energy programs from becoming countries with nuclear weapons programs. And at the top of the IAEA is Rafael Mariano Grossi, a man whose passport has quite the collection of stamps in it. There's very few people these days who are able to travel freely between Moscow and Kyiv, meeting with both Volodymyr Zelenskyy and with Vladimir Putin. Shashank Joshi is our defense editor.

Shashank Joshi
There's even fewer still who can then visit Damascus or Tehran, visiting the likes of Bashar al Assad, Iran's leadership, and then visit the UN Security Council to brief the worlds great powers. I think in a world where nuclear risks are rising, there is no one more important to speak to. And we have spoken to you quite a lot about those shifting nuclear risks from America's approach to indias rise. But you also mention Iran, Ukraine. Certainly theres North Korea in the mix.

Jason Palmer
What is keeping him awake at night? I think Iran has to be top of the list. When I spoke to Mister Grossi, he had just come back from Iran a few days earlier. I spoke to him before the helicopter crash that killed Ibrahim Raisi, the iranian president. But actually, Mister Grossi himself had met Iran's foreign minister, who also died in that helicopter crash.

Shashank Joshi
I think the issues that he was raising in Tehran, though, are all in some ways even more important, given the leadership vacuum that's now apparent. Iran's nuclear program is expanding drastically in size and sophistication. It has about 27 times as much enriched uranium as it was supposed to have under the JCPOA. That's the big deal that was torn up by Donald Trump in 2018 and which Grossi described as an empty shell. And with the nuclear confrontation that's taken place since, the IAEA has lost many of its oversight capabilities inside Iran, and it's been trying to get those back.

Jason Palmer
And so did you get a sense from him how back on track he thinks things are with Iran? My sense is that he made quite little progress. He can't discuss all aspects of that meeting. They're clearly still negotiating. But if we look at Irans uranium stockpile, some of which is enriched to 60% purity, which is about a stone's throw from weapons grade, that's enough for about three bombs.

Shashank Joshi
And what concerned Grossi is not just the stockpile of uranium, but the centrifuge capability, which basically means the stuff you spin the uranium with and how quickly you could then enrich that further to weapons grade. If you go back to 2015, you were talking about just a few thousand centrifuges of the first generation, the so called IR one, which is like an old model. Now. They have Ir two s, ir two ms, ir four s, ir six s, which already numerically give you an idea, like any brand branding of something better, faster, bigger, more efficient. And the point hes making is that Irans technical capabilities have completely superseded the terms of the nuclear deal that are now nearly a decade old.

The result of that nuclear sprint is that if it chose to do so, Iran could produce a bombs worth of weapons grade uranium in just a week or so, according to calculations. And over a month, if it had the underlying uranium, it could produce about seven bombs worth. That's obviously very troubling. So it seems clear then that Iran has greater and greater capability. I guess the question then becomes whether it has greater and greater willingness to deploy any of it.

I think there's two big concerns, Jason. One is that in recent months, we're seeing a lot of senior iranian figures, perhaps concerned by the regional situation and really motivated by the need to deter Israel, saying that if they're attacked, they would overturn previous restrictions. The so called fatwa on nuclear weapons. This is pretty extraordinary. We're seeing, I think, a much more open willingness to hint at nuclear ambitions than in the past.

The other piece of this, I think, is that the international situation has changed a lot. The IAEA board of directors, they can refer Iran to the UN Security Council over this issue, over its non compliance with the agency's safeguards and monitoring. But in the past, whereas the security, Security Council could agree on sanctions on Iran, even securing russian and chinese consent, the worry now is that that Security Council would not be united on rebuking Iran. Those days are long gone, and the Iranians know it. I cannot talk for the Russian Federation or the People's Republic of China, of course, but you can, you know, with some degree of certainty.

Rafael Mariano Grossi
Imagine that this past consensus, this past common ground has evaporated together with so many things in the international scene, which makes it complex. And coming back to this notion that Mister Grossi can go where he likes. What did he say about the situation in Ukraine? Well, hes been to Ukraine a lot. And, of course, his concern there is not nuclear weapons, which are not in his jurisdiction in that sense, but rather nuclear power.

Shashank Joshi
Russia has been occupying the Zaporizhya nuclear power plant in southern Ukraine since almost the beginning of the war, and it is said it intends to restart that power plant. That's hugely controversial. Now, Grossi visited the site in February. He met Mister Putin in Moscow the next month. And he says talks over that restart are ongoing, and they are very delicate.

When I asked him, obviously, he doesn't have a mandate to get into the politics of it, but he does have a mandate to talk about the technical safety. Nobody challenges us. Our voice is respected. And people, of course, they have their political interpretation, which is very different if you listen to certain countries and other countries, but they will all agree that it is indispensable that the IEA is there and it remains there. Now, theres a lot of Ukrainians who think that the IAEA is maybe legitimating russian occupation.

Grossis view is that his role in Zaporizha shows just how effective multilateral institutions can be. And he basically is saying, look, when something happens at Zaporizha, the international community can be assured there's a kind of neutral, impartial voice telling them what is going on. When he visited early in the war, he didn't get permission for this, but he just left a bunch of people at Zaporizha, a number of inspectors, and they stayed there. And indeed, he has people present at, I think, all the active nuclear plants inside Ukraine, which I think is a pretty interesting initiative and shows what an international institution is capable of doing in a way that perhaps a state involved in Ukraine would not have been able to do. Now, Shashank, you're a man who thinks a lot about the nuclear world order.

Jason Palmer
Certainly Mister Grossi does as well. What sort of other takeaways did you get from your conversation? Things that left you thinking, there is. So much going on and there's so much, even in the past, to excavate. For example, Syria had a nuclear weapons program before its reactor was bombed by Israel in 2007, and the IAEA is back on that case trying to look into it.

Shashank Joshi
We're seeing a potential nuclear deal between America and Saudi Arabia involving nuclear energy, and we know that Saudi Arabia has said it would seek a bomb if Iran developed one. And then on top of all of that, nuclear power is growing around the world. There's a very large number of nuclear reactors under construction, and the IAEA has to make sure that nothing's being diverted from those for any nefarious purposes. What I think is just really interesting is that in this international system, where there is such deadlock between the big powers over Ukraine, in the UN, in Asia, in so many ways, that you still have this institution that has pretty limited powers but is nonetheless able to talk to all countries. And perhaps the real test of it will come in a few years when we'll be asking, does Iran have a bomb?

Was Iran prevented from going nuclear? That may be the ultimate test, but for now, the agency is certainly doing its best to try to keep a lid on all of this. Thanks very much for joining us. Shushank thank you, Jason.

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Jason Palmer
Okay, put all of this in soft focus in your mind. A beach house. Feet in the sand. Two shadows running up the stairs. Then a ring.

A kiss. A trademarked slogan. The diamond engagement ring. How else could two months salary last forever? A diamond is forever.

De Beers this. This is the stuff of advertising legend. A diamond giant called de Beers named its price, and generations of mostly men queued up to pay it. But diamonds arent what they used to be, and de Beers isnt either. So Anglo American, a big british mining firm that has an 85% stake in De Beers, looks to be filing for a separation.

Tom Lee Devlin
So after rejecting a takeover bid from BHP, which is the worlds biggest mining company, Anglo American has decided to break itself up. Tom Lee Devlin is our global business correspondent and a co host of our sister show money talks. It's planning to sell its coal, nickel and platinum operations. But perhaps most significantly, it's also proposing to sell off De Beers, which is the company that really created the diamond industry as we know it today. So why sell it then?

So De Beers role as the kind of central player in the diamond industry has been steadily eroding for quite a number of decades now. Back in 2000, it abandoned its policy of buying and selling diamonds to try and control the supply and therefore control the prices. But if you look more recently, actually its business has been really kind of on the rocks, pun intended. So Anglo was actually marked down its investment in the company by quite a significant amount. Its revenues were down by a third last year.

If you look at the results from its April site, which is the event where the company offloads its rough diamonds, these were very disappointing. They were down by almost 20% year on year. And what's behind that? That drop in demand? Well, the company blames weak demand from consumers in America and China, and that's probably part of the story in the kind of near term.

But perhaps more worrying is this threat from lab grown diamonds than that's been growing over the past few years. And these lab grown stones are basically identical to the ones that De Beers pulls from the ground, but they cost about a fifth as much. And they've really been hammering the diamond business for quite a few years now. When you say hammering, though, how much of the mined diamond business have they eaten? Well, one analyst we spoke to thinks that lab grown diamonds now account for about a fifth of the value of diamond jewelry sales globally.

Another that we spoke to said that in America. Nearly half of the diamond engagement rings sold this year are likely to container a lab grown stone. So this is really a somewhat existential threat for de beers. But I think our view is that it can turn things around. But to do that, it's got this incredibly difficult task ahead.

Which is to convince buyers to distinguish between two essentially indistinguishable stones. And how would it pull that off? Well, the market itself is probably going to do some of the work here. We've seen a significant increase in the supply of these lab grown diamonds in the last few years. And we think we're going to see that continuing to grow in the next few years.

As a number of chinese and indian newcomers enter the market and continue to push up that supply. What that's doing is creating this sort of growing wedge in prices between lab grown diamonds and the kind of original variety. And people buy diamonds partly because they're expensive. When people are buying an engagement ring, some people see the price of that ring is a kind of gauge of their affection. Others, when they buy diamonds, see them as a kind of heirloom that they want to pass from generation to generation and a kind of store of value.

So to some extent that sort of divergence in prices may have an effect here. But I think probably the biggest thing is that de Beers really needs to rediscover the marketing flair that it was famous for in the 20th century. You know, this is the company that convinced would be grooms that they should spend one month's salary on an engagement ring and then increase that to two months salary. But really we haven't seen that kind of marketing genius from the company for many years now. A recent slogan that it's been trialing is diamonds are nature's mic drop.

Which frankly is not particularly compelling. And certainly doesn't sell this kind of image of mined diamonds as a kind of permanent object. So essentially, whoever ends up buying de Beers then has to be good at the marketing game as well. I mean, who do you think it's going to be in the end? Yeah, that's partly what makes this so interesting.

So de Beers is both a mining company, but it's also a jewelry company. So BHP still has time to put in a revised bid for the company. But even if it does buy anglo american. The kind of general expectation is that it's quite likely it will sell off to beers. BHP actually exited the diamond business about a decade ago.

And other miners that might buy Anglo American are probably in a similar situation. A lot of them are very much focused on the green metals boom at the moment, and maybe not so interested in a business like Tabeez. So then the question is, who else could buy it? One option that people have been talking about is a big sovereign wealth fund, perhaps from the Middle East. Dubai has become a very important sort of center for the global diamond trade.

Another possibility is one of the big luxury houses. So Richemont, which owns Cartier, has ruled out a beard, but LVMH hasn't done so. So you could imagine a world where it would want to merge De Beers with Tiffany's, which it bought in 2021. So that's another possibility. And one of the advantages that one of those luxury giants would have here is the marketing flair that the company really needs right now if it's going to convince people to keep buying its diamonds.

Jason Palmer
Tom, thanks very much for your time. Thanks for having me.

Ora Okambi
In Russia's war with Ukraine, much of the focus has been on quite sophisticated weapons, like fighter jets and long range missiles, or drones repurposed by Ukraine to attack troops.

But Russia is also resorting to some decidedly low tech countermeasures. Behold, the turtle tank. Since before the russian invasion of Ukraine in 2022, we saw some russian tanks had these improvised grilles fitted over the turrets, known as roof screens or coat cages. But in the last month or so, we've started seeing a much more dramatic, expanded form of that. David Hambling writes about defence for the Economist.

David Hambling
The entire tank is covered in a complete shell made of sheets of steel or corrugated iron. So it creates something like a turtle, or, one commentator suggested, because they look like a garden shed on wheels, they should be called assault sheds. Okay, so how do these turtle tanks come? Assault sheds work? The idea is a fairly well established one.

It's an approach called spaced armour, which is where you put a light sheet of armour in front of your main armor, protection to deal with incoming projectiles. And we've seen this approach before, since before the first world War, it was used on warships. During the second world War, it was used as add on protection for tanks by several different armies. So the principle is well established. And do they work?

Ora Okambi
I mean, what happens when a shell hits this shield? Right? So the principle with spaced armor, initially, it was designed to deal with kinetic, high speed projectiles. So when something like an armour piercing projectile hits the sheet of spaced armor, it gets blunted slightly and it also gets knocked off course and may tumble. And that then makes it much less effective when it reaches the main armor.

David Hambling
In the modern era, we see less of these high velocity projectiles and a lot more of what are known as shaped charges, which work by blasting a jet of high velocity metal when they detonate. Spaced armour also works against those because it increases the distance between the charge and the main armor. So in some ways, it's like when you put your hand out to stop something that's thrown at you, or indeed stop someone from stabbing you. Your hand doesn't give you complete protection, but it does give you a lot of standoff distance between you and the threat, and means that when the threat does actually hit you, it's going to do a lot less damage. In some cases, it can be pretty effective.

In other cases, it has no effect at all. It really depends on the level of threat that you're dealing with. And how are the Russians deploying this technology? Initially, we saw it on t 72 tanks, mainly from Russia's fifth motor rifle brigade. The turtle shells were added to the assault tanks at the front of assaults.

These are called breaching vehicles, and normally they're equipped with a mine plow. So they go at the head of a column and they push aside the mines to make a way through a minefield. And other vehicles follow in the clear lane that they've created, and that means they are the ones that draw the most fire. At the moment, the biggest threat is from these small FPV drones. So the Russians have added these turtle shells as a way of protecting against fpvs, which use shaped charges.

And in addition to that, a lot of these turtle tanks also have jammers on the roof of them. So to give added protection against drones. So really it looks like it's an attempt to give the lead vehicle in the assault the most protection against the threat that it's most likely to encounter, which is small drones. Should we expect Russians to keep using these? Well, according to one NATO official, up to two thirds of russian tanks are currently being destroyed by small fpv drones.

So they are certainly the biggest threat. And anything that gives you an added level of survivability against those is likely to be something that the Russians will carry on using. But there are downsides to them as well. Obviously, adding this amount of armour adds a load of extra weight to it, and that slows the tank down and makes it less mobile. And that's a real problem when tanks rely on mobility to survive.

The other problem, which is fairly obvious, and which is the thing that makes them look ridiculous, is that this shed like enclosure prevents the tank's turret from rotating. That means it can't shoot at anything unless it's directly in front of the tank. It also very much limits the crew's visibility. We've seen at least one case where a turtle tank actually drove off course during an assault because clearly they have no idea where they are. So it looks like it's a desperate, improvised solution to a problem because there are no other good solutions.

So I think we'll carry on seeing it used, but I doubt whether it's going to make that much difference.

Ora Okambi
David, thank you so much for your time. Thank you.

That's all for this episode of the Intelligence. Let us know what you think of the show. You can email us@podcastseconomist.com and we'll see you back here tomorrow.

Jason Palmer
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