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Argentina, Brazil to team up on nuclear power

Brazil and Argentina on Friday agreed to develop a nuclear reactor jointly and enrich uranium together to address booming energy demand and looming shortages.

Energy issues dominated the agenda during the first of two days of meetings between Brazilian President Luiz Inacio Lula da Silva and Argentine President Cristina Fernandez de Kirchner in Buenos Aires.

The leaders of the two biggest economies in South America agreed to start the process this year to build the Garabi hydroelectric dam on the Uruguay River. Brazil agreed to sell electricity to Argentina in the winter if it does not have enough natural gas to fuel its power plants.

Brazil has two nuclear power plants and Argentina has two operating plants and a third that has been in the works for decades.

“We're going to launch a satellite jointly and develop a program of peaceful nuclear cooperation that will serve as an example in this world, ablaze with the temptation to build up arms and with political and ideological intolerance,” Lula said in a speech before Argentine lawmakers.

The neighboring countries plan to create a joint company to enrich uranium for nuclear power. They also signed accords to improve road infrastructure and to start using in August local currencies in bilateral trade, instead of the US dollar.

Brazil and Argentina are the most powerful members of the Mercosur trade bloc, which also includes Paraguay and Uruguay. Venezuela is in the process of becoming a full member.

Lula and Argentina's Fernandez will meet with Bolivian President Evo Morales on Saturday to discuss how to divvy up Bolivia's limited natural gas supplies, which both Brazil and Argentina are anxious to secure.

Bolivia has been prioritizing its exports to Brazil, its biggest client, to the detriment of Argentina. Buenos Aires worries it could face another spate of energy shortages during the southern hemisphere's winter months.

“Tomorrow I will have a discussion with President Cristina and President Evo Morales, which is a discussion that we should have throughout South America. The energy question has become a global matter and it's a very delicate subject,” Lula said.

Brazil imports up to 30 million cubic meters of Bolivian natural gas per day, while Argentina's contract maximum is 7.7 million cubic meters. (Reuters)