Transcript of the beginning of the meeting:

Vladimir Putin: During my meeting with the Ukrainian president yesterday we revisited the agreements we have reached on joint efforts in the nuclear field. We discussed opportunities for closer cooperation and joint projects. These include the Khmelnitsky nuclear power plant, the two units for it, and also nuclear fuel and some other aspects of our extensive collaboration. I understand that you were supposed to finalize some of these issues. What are the results?

Sergei Kiriyenko: I can report to you that in accordance with the agreements and the minutes of your meeting of the Economic Development Committee held in Sochi in early May, we have finalized two key contracts.

Regarding the first contract. I returned from Ukraine just three hours ago. We have signed an intergovernmental agreement on completing the third and fourth units at the Khmelnitsky nuclear power plant, which you discussed with the Ukrainian president yesterday. It is a partnership agreement because work will be divided approximately in half. This is a prototype for our joint activities because Ukrainian enterprises will provide about half of the goods, services and equipment and the other half will be provided by Russia. We are getting things underway: tomorrow we will hold a meeting on the Khmelnitsky NPP. And we are going to start work quickly, as I reported to the Ukrainian prime minister today, and he issued the necessary orders. So, that instruction has been fulfilled.

During its meeting in Sochi, the committee issued a second instruction regarding the fuel contract, which is a critical for us because Ukraine is our strategic partner in these matters. We have signed a fuel contract, an indefinite contract, meaning one that is valid for the entire lifespan of the power units. Previously we had a ten-year contract. This time around there was also talk about whether the contract should be for five or ten years... I think in the end we found a very good solution. We offered good terms to our Ukrainian partners. Since the contract is signed for a long term, they got discounts and we have a guaranteed load for our enterprises and clear prospects for the next 15-20 years. As long as these reactors are in operation, fuel will be supplied using Russian technologies. Our policy is localisation, that is, our Ukrainian partners get a stake in Russian enterprises and we get a stake in Ukrainian enterprises, thereby creating the entire technological flow-sheet. That contract has been signed, too.

Vladimir Putin: Excellent, congratulations.

Sergei Kiriyenko: Thank you.

Vladimir Putin: This is one of those rare cases when one side is pleased because it thinks it has achieved all the goals it initially set for itself, and the other side is also satisfied.

Sergei Kiriyenko: Thank you. We assume that these are only the first steps, because in accordance with your instructions, we have set up four working groups. These are the results of two of them: one on fuel and the other on the construction of nuclear power plants. We also have a working group on machine building and the other one on the operation of nuclear plants. These working groups are scheduled to report to you by July 1. As it happens, the first two groups are a little ahead.

I would like to take this opportunity to report to you on one more issue, which is also related to your instructions and the decision you took last year to allocate additional resources to acquire uranium abroad. An important stage was completed yesterday when we obtained a controlling stake in Uranium One Inc. This is the number one company among private uranium mining companies. It has a very good inventory structure, very good assets, cheap assets in some countries, including Kazakhstan. During the first stage last year we acquired 23% of that company, and now we have brought the process to its logical conclusion. We signed a deal yesterday that gives us a 51% stake in the company, which solves the vital task of diversifying our reserves, both geographically and, most important, in terms of the cost structure, because in general Russia has sufficient uranium reserves. But, as we have reported to you, some of them would take a lot of time to develop, because they are in areas that are difficult to reach...

Vladimir Putin: It would be expensive, right?

Sergei Kiriyenko: Yes. It would take a lot of time and the economic feasibility of some of them, given current uranium prices, is not clear. But we are not giving up on them in the long term. We will follow through on all the national programmes. The deal will help us complete the programme, ensure the necessary reserves, the growth of reserves, and what is more, effective reserves, and the production programme. In other words, by striking this deal we will begin a yearly schedule of uranium production, which we need in order to supply uranium to Russian nuclear power plants, including the construction of new ones and all the foreign contracts, because we guarantee fuel supply along with building the nuclear plants. With these acquisitions, we secure uranium supplies 100%.

Vladimir Putin: Every segment of the industry must be economically competitive, that is obvious. That being said, I would like to remind you that, as you have just mentioned, we should not neglect our own deposits. You know that the areas where these deposits are - the heads of these regions say with good reason - that our own national fields must be developed.

Sergei Kiriyenko: Yes, you are absolutely right.

Vladimir Putin: Last year, in spite of the economic crisis, we added an extra 50 billion roubles to the company's capital. That is about the same amount we have allocated to support the railways. It's a good deal of money. I hope it will be used wisely. And what about the development of the industry as a whole?

Sergei Kiriyenko: There's one more important issue concerning the industry as a whole. We have the approvals of all the agencies, also in accordance with your instructions, for additions to the Federal Targeted Programme for the Development of Nuclear Weapons. That involves the development of the material basis for the nuclear weapons complex, especially since nuclear tests are banned. We are fulfilling all the tasks in addition to our current activities. The nuclear weapons complex has fulfilled everything that has to do with the state armaments programme, including for the future. But in order to be competitive not only in ten years time, but in 30, 40 and 50 years time, we have prepared a large-scale programme to modernise the test stands, the experimental base that will ensure the future of the Russian nuclear weapons complex while Russia strictly abides by the nuclear test ban. This involves state-of-the-art computer technologies, which have been studied and approved by the Federal Nuclear Centre, and much more. The programme has been approved by everyone. If possible, it is very important to us now that this addition be supported and signed.

Vladimir Putin: I have studied it carefully. It's all here. The document has been signed.

Sergei Kiriyenko: Thank you.

Vladimir Putin: I very much hope that the work will be well organised and be carried out at a high technological level.

Sergei Kiriyenko: Thank you. Thank you very much for your support.