The bad ideas just keep coming. A few bloggers and news outlets picked up this week on the report that a Russian company wants to acquire a 51 percent stake in a U.S. uranium-mining operation. Four congressmen have written to Timothy Geithner asking him to block the sale, pointing out that if it goes through, a Russian corporation will control 20 percent of America’s uranium resources.
The sale should be blocked. The congressmen fear – with reason – that Russia could deliver uranium from the Wyoming mine to Iran, but that’s not the only consideration. Russia acquiring a 51 percent interest in a natural-resources operation creates unnecessary vulnerabilities for the nations involved. Multiple rounds of natural-gas extortion in Europe have made that clear. Russia behaves badly in its natural-resources dealings, using them alternately to build leverage with the wealthy and to strong-arm the struggling.
Russia and China are competing vigorously to acquire control of natural resources in Asia, Africa, and Latin America. Besides its gas and oil investments in the Caribbean, Brazil, Venezuela, Argentina, and Colombia, Russia has signed uranium-development agreements with Brazil, Venezuela and Ecuador. The Russians are also prospecting for oil and gas off Cuba’s West coast in the Gulf of Mexico, an enterprise unaffected by President Obama’s moratorium on U.S. drilling. (See here for an extended treatment of Russia’s oil and gas acquisitions.) Between them, Russia and China are gradually narrowing the resource options of the U.S., the EU, and Japan; if geopolitical shifts drive us to seek new suppliers, we will find, wherever we look, that the Asian giants are already there. We certainly don’t need to collude in their strategy by handing our own resources over to their companies.
In turning markedly against Japan last week over the Kuril Islands issue – which carries major implications for undersea resources – the Putin-Medvedev regime sent a very clear signal about where it is headed. If we invite Russia to control the commercial destiny of a significant amount of our natural resources, we will be buying political problems for the future. Our current ability to stand up to extortion is no excuse for courting it unnecessarily. The Russia factor makes this sale an issue of national security; it is inherently political and should be decided for political reasons. The sale should be blocked.