File photo. President Hassan Rouhani, right, welcomes Director General of International Atomic Energy Agency, IAEA, Rafael Grossi for a meeting in Tehran, Iran. AP
File photo. President Hassan Rouhani, right, welcomes Director General of International Atomic Energy Agency, IAEA, Rafael Grossi for a meeting in Tehran, Iran. AP

IAEA: Iran has started producing uranium metal



The UN atomic watchdog on Wednesday said its inspectors confirmed that Iran has begun to produce uranium metal in another breach of its 2015 nuclear deal with world powers.

International Atomic Energy Agency head Rafael Grossi told member nations that inspectors confirmed on February 8 that 3.6 grams of uranium metal was produced at Iran’s Isfahan plant.

Uranium metal can also be used for nuclear bombs and research on its production is specifically prohibited under the nuclear deal Tehran signed with Germany, France, Britain, China, Russia and the US in 2015.

Iran had said its plans to conduct research and development on uranium metal production were part of its “declared aim to design an improved type of fuel", the IAEA said.

Since the US withdrew from the deal in 2018, the other members have been trying to preserve it.

Tehran uses breaches of the deal to pressure the other signatories into providing more incentives to offset sanctions reimposed by the US after it pulled out.

The ultimate goal of the deal is to prevent Iran from developing a nuclear bomb, something it insists it does not want to do.

The latest move by Tehran further complicates the efforts of the other member nations to entice the US to return to the deal, which President Joe Biden has indicated he would be open to.

When Iran announced its plans in January to produce uranium metal, the German, French and British foreign ministries issued a joint statement saying they were “deeply concerned".

“Iran has no credible civilian use for uranium metal,” they said. “The production of uranium metal has potentially grave military implications.”

Although uranium metal in theory can be used in generating electricity, experiments with it are prohibited under the nuclear deal because it is a key material in making nuclear weapons.

The process involves converting high-enriched uranium gas into metal that provides the cladding, or outer covering, for the fuel rods that power a nuclear reaction.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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