Iran installing new uranium enrichment machines to speed up nuclear programme

TEHRAN // Iran is installing new uranium enrichment machines to speed progress in its nuclear programme, the foreign ministry said yesterday, a development that may increase Western concern about Tehran's aims.

Ramin Mehmanparast, the foreign ministry spokesman, appeared to confirm a story last week that Iran was installing two newer and more advanced models of the centrifuges used to refine uranium for large-scale testing at a research site.

If Iran eventually succeeds in introducing the more modern centrifuges for production, it could significantly shorten the time needed to stockpile material which can have civilian as well as military purposes, if processed much further.

"By installing the new centrifuges progress is being made with more speed and better quality," Mr Mehmanparast said, adding that the move showed Iran was being successful in its "peaceful nuclear activity".

Mr Mehmanparast said Iran had informed the International Atomic Energy Agency (IAEA) about the instalment of new centrifuges.

"The agency is aware that our peaceful nuclear activities are progressing. The instalment is a confirmation of the Islamic Republic's success in the nuclear field."

Iran has for years been trying to develop centrifuges with several times the capacity of the 1970s-vintage, IR-1 version it now uses for the most sensitive part of its atomic activities.

The United States and its allies accuse Iran of trying to develop bombs under cover of its nuclear programme. Iran denies the allegation, saying it needs nuclear technology to generate electricity to meet its booming domestic demand.

Iran's refusal to halt uranium enrichment has led to four rounds of UN sanctions on the country, as well as tighter US and European Union restrictions.

Diplomatic efforts to find a solution to Iran's nuclear dispute have stalled, after talks between Iran and six world powers over half a year ago failed to make any progress.

"No new development has taken place regarding the nuclear talks with major powers," Mr Mehmanparast said.

Western diplomats have often accused Iran of deploying stalling tactics in the nuclear dispute with major powers, including the United States, China and Russia, to buy more time while it pushes ahead with its disputed activities.

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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.”