RUSSIA-BURMA NUCLEAR INTELLIGENCE REPORT #2

By Roland Watson
August 7, 2008

We have received additional intelligence that expands our last report, and which also provides confirmation
for earlier reports. This intelligence comes from new sources. In summary, as we continue to receive
information, the details of the SPDC’s nuclear program are becoming more and more concrete.

Nuclear program objective

In May 2001, at the National Defence College (Rangoon), SPDC Science and Technology Minister U
Thaung said that Burma would make an effort to possess nuclear weapons by 2020. Once achieved, this
would make the regime the strongest military power in Southeast Asia; the country would be transformed
into the “Fourth Burman Empire”; and, it would be able to threaten Thailand militarily.

This statement reveals the SPDC to be a grave threat to international security and peace. The regime's
announcement that its new 10 MW reactor is intended for peaceful research purposes is a lie.

Program background

The SPDC’s program to acquire nuclear weapons began in 1990. (At this time the junta was known as
SLORC.) Rangoon University Physics Professor U Po Saw was consulted about developing the technology,
and also the selection of candidates to become state scholars. The process of honing cadet officers for
training in nuclear technology was begun in 1997 with Defense Services Academy Class 42.

Prior to 2000, Russian nuclear experts were invited and discussions on building a reactor, its location, and
the training of state scholars, were held.

Our sources also tell us that the junta first contacted India to obtain nuclear technology. The country agreed
to accept state scholars. However, since India also stipulated that it had to supervise and control the
operation of the reactor, this approach was halted.

With the help of China, the SPDC succeeded in reaching its agreement with Russia. In addition, the
Chinese government has advised the junta that it should try, by various means, to make nuclear weapons
and, if it cannot produce them by its target date of 2020, that it should buy them.

In 2003, the regime sent thirty military officers to North Korea to study reactor technology. In 2006, it
started buying from the North the machinery necessary for reactor construction. The SPDC established its
connection with North Korea so it would not have to stop the program if its relations with Russia turned
sour.

The SPDC sells natural resources to obtain nuclear technology, including for the costs of educating the
state scholars (a new source confirms that there are over 4,600 in Russia alone). We have also learned that
the resource sales included 20,000 tons of iron ore mined in Ka-thaing Taung, a range in the Hpakan area in
Kachin State (near the famous jade mines). But, and as has been reported by others, the junta did
experience financial problems in 2005 and its program with Russia was suspended. These difficulties were
overcome, the program was restarted, and the SPDC is now financially secure. (The reason for this change
of fortune is obvious. According to the new U.S. Burma law: “The Congressional Research Service
estimates that the Yadana pipeline provides at least $500,000,000 in annual revenue for the Burmese
Government.”)

Our new sources further tell us that the SPDC has secretly tried to gain assistance from Iran. This confirms
a relationship that we have previously heard about from other sources.

Further, in 2000, Japan started taking scholars for doctoral level studies, to operate a reactor. With the help
of Japan, new departments of nuclear science have been set up at Rangoon University, Mandalay
University, and the Defense Services Academy.

Training in Russia

In 2001, the first batch of scholars, 150 military officers, was sent to Russia from Tada U Airport on
chartered Aeroflot flights.

In Russia, the scholars attend a variety of institutes in Moscow and also St.Petersburg, depending on their
subjects of study. The schools include:

MEPHI – Moscow Engineering Physics Institute

MIET – Moscow Institute of Electronic Technology
MATI – Moscow Institute of Aviation Technology
MAI – Moscow Aviation Institute
BMSTU – Bauman Moscow State Technical University
MITT – Moscow Institute of Thermal Technology
MISI – Moscow Civil Engineering Institute
MSMU – Moscow State Mining University

MEPHI teaches nuclear science, MIET rocket guidance, MAI aircraft and space subjects, and MATI the
technology for building rockets to carry satellites. There are also course programs in tunneling, uranium
mining, and uranium ore refining.

Our new sources confirm that many of the scholars are unhappy. They were forced to go to Russia; their
pay is too low; the harsh weather has caused them problems; and the medical care they receive is
inadequate. They complained to the Burma Embassy in Moscow, and asked to be sent home. In response,
the Directorate of Intelligence sent weekly instructions urging them to complete their work and to fulfill the
national aim (to produce nuclear weapons). At one point former Foreign Minister U Win Aung came in
person and told the students to finish their studies. He relayed a message from Vice Chief of Staff Maung
Aye that anyone who married a Russian woman scientist and then returned to Burma would be rewarded.

Also, in 2002, Quartermaster General Win Myint as well as the Navy Chief, Air Chief and Transport
Minister went to Russia and arranged for the training of twenty Air Force pilots, who would then take ten
purchased MIG 29s back to Burma. They additionally discussed whether Burma should acquire aircraft
carriers and submarines. In July 2002, Science and Technology Minister U Thaung went to Russia and
signed the agreement for the acquisition and construction of the nuclear reactor.

Reactor Location

In our previous report we stated that the site of the reactor is Kyauk Pa Toe (aka Kyauk Pha Htoe), near
Tha Beik Kyin. While we do not yet have a confirmation of this, we have received additional information
about the SPDC’s efforts to keep its location secret.

Even the technicians who were trained to build the reactor were not allowed to know its site. In June 2006,
there was an information leak, and the officers for the program were called to Naypyidaw and interrogated.
This is apparently a reference to the information that was published by Bertil Lintner in a July 2006 Asia
Times article, which said that North Korean technicians had been seen at Natmauk, a town to the east of
Magwe.

We have now learned that a 10-megawatt reactor was being built (or was intended to be built) in Myaing
Township, Magwe Division, and further that it was to use heavy water and, for that reason, that it would be
able to produce plutonium.

This leaves us with two plausible reactor sites, Myaing Township and Kyauk Pa Toe. One scenario that
could explain this discrepancy is that the SPDC’s original plan was to locate the reactor in Magwe, but that
this subsequently changed, perhaps because, as The Irrawaddy reported, it is an earthquake zone. In any
case, while Magwe remains a possibility, there is also a strong source identification for Tha Beik Kyin.

Uranium activities

We have received additional information about Burma’s uranium deposits, which helps confirm our prior
reports. Uranium ore that is commercially exploitable exists in the Kyauk Pyon, Paungpyin and Kyauk Sin
areas. In addition, uranium prospecting has occurred or is underway in southern Tenasserim, Karenni State
(the Loikaw area), Moehnyin in Kachin State, and in areas west of Taunggyi.

Uranium milling is in progress at Tha Beik Kyin. Further, and as we speculated in our last report, we have
received information that a program to enrich milled uranium (yellowcake) to U-235 has also begun at Tha
Beik Kyin. The entire operation at this location is now referred to as Nuclear Battalion-1.

We have also had confirmed that in early 2006, yellowcake was sold to North Korea. In July 2006, the
regime purchased from North Korea nuclear activation equipment for use in uranium enrichment and also
for the production of plutonium. While we do not know the precise nature of this equipment, there is a good
probability, given the other information, that it includes centrifuges. At least one North Korean nuclear
expert is now working in Tha Beik Kyin.

We further have confirmation that a related Military Research Center was built in the Setkhya range (aka
Sa Kyin) near Lun Kyaw, which area is also reportedly a Nuclear Battalion, and that there is a Civilian
Research Center in Kyaukse Township. There are also Russian nuclear experts in Pyin U Lwin, who give
refresher courses to the state scholars after they return home.

Military modernization and Napyidaw defense

The SPDC has made a great effort to purchase major weapons systems and to modernize its armed forces.
We can now report the following significant acquisitions.

In 2002, the junta bought 122 mm howitzers from North Korea. From China Northern Industries
Corporation, it bought fifteen large radars for air force use. These radars were installed at Mingaladon Air
Force base; Namsan Air Force base; the radar base at the top of Nat-ye-gan Mountain in Ann Township;
Hainggyi Island radar base; and Koko Island radar base. Moreover, for sea and coastal security the regime
installed naval-use radars, on Pyin Wain, Take Soon and Ta-pin-hmaw islands in the Irrawaddy Division;
on Kyun Thaya, Mayu, Man-aung and Nantha islands in Arakan State; and on eight islands in Tenasserim
Division. In 2002, it also bought, from Russia, ten MIG-29s; as well as, in February 2005, missile launchers
and trucks; and, in November 2006, 122 mm and 240 mm missiles.

Naval officers are enrolled in training courses in India and Russia. In India, they attend a Ship Simulator
Course, and in Russia Anti-Ship Firing and Missile courses. From September 2007, the SPDC started to
buy twenty-eight anti-ship missile carriers, in batches, and the related missiles. India together with China
are also both selling and giving weapons to Burma. In 2007, India gave 76 mm and 75 mm mountain
batteries and 120 mm anti-aircraft batteries, for ten anti-aircraft battalions.

Before 2000, there were only two artillery divisions in Burma. By 2004, the heavy weapons force had been
expanded to ten artillery divisions and one rocket division.

Since the move of the military headquarters to Pyinmana, fiber optic cables have been used to communicate
with the regional commands. A Wide Area Network (WAN) is used to connect strategic locations including
the defense perimeter of Naypyidaw, the radar bases in Rangoon Division, the air force bases, the naval
bases, etc. In addition, for the defense of Pyinmana, the ten battalions of MOC 6 are posted in the area. An
anti-aircraft battalion is stationed at Taung Nyo in the Pegu Yoma range, another anti-aircraft battalion is to
the east of Wegyi and Thawutti, and a number of anti-aircraft missiles are based in Pyinmana itself. For
additional security for Naypyidaw, two armored battalions are stationed between Pyawbwe and Pyinmana
towns, and three artillery battalions and the No. 901 Artillery Operation Command are in the Bawnetgyi-
Payagyi area, in Pegu Division.

For signal communications security, the SPCD is developing its own wireless systems. Prior to 2006, XD-
D6M machines were used. They could generate wavelengths of from .01 to 99 meters, and the signal could
be intercepted easily. For that reason, the SPDC instructed the Armed Forces Main Communications
Factory to produce new devices. In 2006, the factory created a new wireless device, with Chinese technical
assistance, and it was tentatively named 2006M1. The new machines produce wavelengths of from .00001
to .00009 meters. It is reportedly quite difficult to intercept messages sent over the new machines.

The SPDC is also developing computer software to replace the manual firing programs for the 76 mm and
120 mm artillery, mortars, 25 Pounder and 105 mm howitzers, etc. There has also been software research
for forward observation systems both from the ground and the air.

The defense industry factories No. 16 and 19 have been extensively modified so that they may produce
spare parts. (Chinese and Russian weapons are notorious for regularly needing replacement parts, and the
weapons also wear out more quickly in the tropics.) The SPDC had Chinese and North Korean experts
modify factory No. 14 so that it is able to produce medium-range rockets. Construction of factory No. 14
was started in 2000 in Ngapeh Township of Magwe Division and it is believed to be in operation.
Approximately 3,000 military engineers are working in the factory. (Note: Our last report estimated that it
would be five years before the SPDC could produce medium-range rockets, but it referred to Russian-made
guided rockets, so this could be a separate project.)

Conclusion

The fact that the SPDC is aggressively seeking nuclear weapons (not to mention all of its other programs)
should make the leaders of Thailand, and the world, extremely concerned. The appeasement policy of the
Thai government and the International Community towards the junta must be reversed. The SPDC is a
threat of the greatest severity. It must be stopped. Since the Security Council, with Russian and Chinese
vetoes, is unable to act, there must be an alternative solution. The only real options are for the U.S., either
alone or with other concerned nations (Thailand?), to assist the people of the country to free themselves,
using whatever means are required.

At the moment, though, there is a conspiracy of silence even to acknowledge this threat. Thailand, the U.S.
and other nations are preoccupied with other problems. There is no desire to recognize publicly another
new crisis. We therefore must force the issue.

We at Dictator Watch recognize the need for the media to confirm its sources and to only publish news
after it has been verified. But, we also understand that there is such a thing as investigative journalism. For
situations as serious as this, we are surprised that there are apparently not major investigations underway,
by leading media outlets. After all, there are innumerable dissatisfied people inside the SPDC, including
many who should have knowledge of the intelligence that we have revealed. It should not be that difficult
to secure independent confirmation.

Our reports to date have served to alert the Burmese, NGO and intelligence communities, but because there
has been no major media coverage the world at large is as yet uninformed. Most importantly, this lack of
coverage means that political leaders, in Thailand, the U.S., at the U.N., etc., can continue to act as if there
is not a problem.

The fact that the new U.S. Burma law requires the Secretary of State to prepare a report on the SPDC’s
programs for weapons of mass destruction is a good start, and something to which we would be pleased to
contribute. However, a threat of this severity requires more than a report.