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Iran begins process of making enriched uranium metal; U.S., E3 dismayed

VIENNA/WASHINGTON, July 6 (Reuters) – Iran has begun the process ofproducing enriched uranium metal, the U.N. atomic watchdog said on Tuesday, a move that could help it develop a nuclear weapon and that three European powers said threatened talks to revive the 2015 Iran nuclear deal.

Iran’s steps, which were disclosed by the International Atomic Energy Agency and which Tehran said were aimed at developing fuel for a research reactor, also drew criticism from the United States, which called them an “unfortunate step backwards.”

U.S. and European officials made clear that Iran’s decision would complicate, and potentially torpedo, indirect U.S.-Iranian talks seeking to bring both nations back into compliance with the 2015 deal, which was abandoned by former U.S. President Donald Trump.

The deal imposed curbs on Iran’s nuclear programme to make it harder for Tehran to develop fissile material for nuclear weapons in return for the lifting of economic sanctions. After Trump withdrew, Iran began violating many of its restrictions.

Tehran has already produced a small amount of uranium metal this year that was not enriched. That is a breach of the deal, which bans all work on uranium metal since it can be used to make the core of a nuclear bomb. read more

“Today, Iran informed the Agency that UO2 (uranium oxide) enriched up to 20% U–235 would be shipped to the R&D laboratory at the Fuel Fabrication Plant in Esfahan, where it would be converted to UF4 (uranium tetrafluoride) and then to uranium metal enriched to 20% U–235, before using it to manufacture the fuel,” an IAEA statement said.

A confidential IAEA report seen by Reuters said the agency had confirmed that Iran had taken the second of the four steps described, making clear it has begun the process.

Britain, France and Germany said on Tuesday they had “grave concern” about Iran’s decision, which violates the nuclear deal formally named the Joint Comprehensive Plan of Action (JCPOA). read more

“Iran has no credible civilian need for uranium metal R&D and production, which are a key step in the development of a nuclear weapon,” they said in a joint statement issued by Britain’s foreign ministry.

“With its latest steps, Iran is threatening a successful outcome to the Vienna talks despite the progress achieved in six rounds of negotiations,” they said, and urged Iran to return to the talks, which began in April and adjourned on June 20. No date has been set for a next round.

U.S. State Department spokesman Ned Price said that Washington was not setting a deadline for the talks but noted “that as time proceeds Iran’s nuclear advances will have a bearing on our view of returning to the JCPOA.”

Price said the United States found it “worrying” that Iran was continuing to violate the agreement “especially with experiments that have value for nuclear weapons research.

“It’s another unfortunate step backwards for Iran,” he said.

Reporting by Francois Murphy in Vienna and by Humeyra Pamuk and Arshad Mohammed in Washington;
Additional reporting by Doina Chiacu, Jonathan Landay and Simon Lewis in Washington and by David Milliken in London;
Writing by Francois Murphy and Arshad Mohammed
Editing by David Goodman and Sonya Hepinstall

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Hackers demand $70 mln to restore data held by companies hit in cyberattack – blog

A man types on a computer keyboard in Warsaw in this February 28, 2013 illustration file picture. REUTERS/Kacper Pempel/File Photo

WASHINGTON, July 5 (Reuters) – Hackers suspected to be behind a mass extortion attack that affected hundreds of companies worldwide late on Sunday demanded $70 million to restore the data they are holding ransom, according to a posting on a dark web site.

The demand was posted on a blog typically used by the REvil cybercrime gang, a Russia-linked group that is counted among the cybercriminal world’s most prolific extortionists.

The gang has an affiliate structure, occasionally making it difficult to determine who speaks on the hackers’ behalf, but Allan Liska of cybersecurity firm Recorded Future said the message “almost certainly” came from REvil’s core leadership.

The group has not responded to an attempt by Reuters to reach it for comment.

REvil’s ransomware attack, which the group executed on Friday, was among the most dramatic in a series of increasingly attention-grabbing hacks.

The gang broke into Kaseya, a Miami-based information technology firm, and used their access to breach some of its clients’ clients, setting off a chain reaction that quickly paralyzed the computers of hundreds of firms worldwide.

An executive at Kaseya said the company was aware of the ransom demand but did not immediately return further messages seeking comment.

About a dozen different countries were affected, according to research published by cybersecurity firm ESET.

In at least one case, the disruption spilled out into the public domain when Swedish Coop grocery store chain had to close hundreds of stores on Saturday because its cash registers had been knocked offline as a consequence of the attack. read more .

Earlier on Sunday, the White House said it was reaching out to victims of the outbreak “to provide assistance based upon an assessment of national risk.” read more

The impact of the intrusion is still coming into focus.

Those hit included schools, small public-sector bodies, travel and leisure organizations, credit unions and accountants, said Ross McKerchar, chief information security officer at Sophos Group Plc (SOPH.L).

McKerchar’s company was one of several that had blamed REvil for the attack, but Sunday’s statement was the group’s first public acknowledgement that it was behind the campaign.

Ransom-seeking hackers have tended to favor more focused shakedowns against single, high-value targets like Brazilian meatpacker JBS (JBSS3.SA), whose production was disrupted last month when REvil attacked its systems. JBS said it ended up paying the hackers $11 million.

Liska said he believed the hackers had bitten off more than they could chew by scrambling the data of hundreds of companies at a time and that the $70 million demand was an effort to make the best of an awkward situation.

“For all of their big talk on their blog, I think this got way out of hand,” he said.

Reporting by Raphael Satter; Editing by Kim Coghill, Robert Birsel

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EXCLUSIVE New Saudi airline plan takes aim at Emirates, Qatar Airways

DUBAI, July 2 (Reuters) – Saudi Arabia plans to target international transit passenger traffic with its new national airline, going head-to-head with Gulf giants Emirates and Qatar Airways and opening up a new front in simmering regional competition.

Crown Prince Mohammed bin Salman, who is pushing economic diversification to wean Saudi Arabia off oil revenues and create jobs, announced a transportation and logistics drive on Tuesday aimed at making the kingdom the fifth-biggest air transit hub.

Two people familiar with the matter said the new airline would boost international routes and echo existing Gulf carriers by carrying people from one country to another via connections in the kingdom, known in the industry as sixth-freedom traffic.

The transport ministry, which has not released details of the plans, did not respond to a Reuters request for comment.

The strategy marks a shift for Saudi Arabia whose other airlines, like state-owned Saudia and its low cost subsidiary flyadeal, mostly operate domestic services and point-to-point flights to and from the country of 35 million people.

The Saudi expansion threatens to sharpen a battle for passengers at a time when travel has been hit by the coronavirus pandemic. Long-haul flights like those operated by Emirates and Qatar Airways are forecast to take the longest to recover.

Riyadh has already moved to compete with the UAE, the region’s business, trade and tourism hub. The Saudi government has said that from 2024 it would stop giving contracts to firms that do not set up regional headquarters in the kingdom.

“Commercial competition in the aviation industry has always been fierce, and regional competition is heating up. Some turbulence in regional relations is on the horizon,” said Robert Mogielnicki, resident scholar at the Arab Gulf States Institute.

Dubai, the world’s largest international air travel hub, has announced a five-year plan to grow air and shipping routes by 50% and double tourism capacity over the next two decades.

Riyadh has already moved to compete with the UAE, the region’s business, trade and tourism hub. The Saudi government has said that starting 2024 it would stop giving contracts to firms that do not set up regional headquarters in the kingdom.

Saudi Crown Prince Mohammed bin Salman attends a session of the Shura Council in Riyadh, Saudi Arabia, November 20, 2019. Bandar Algaloud/Courtesy of Saudi Royal Court/Handout via REUTERS

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Prince Mohammed is trying to lure foreign capital to create new industries including tourism, with ambitions to increase overall visitors to 100 million by 2030 from 40 million in 2019.

“Saudi Arabia has the ability to push forward with its aviation and tourism strategy when others will be retreating and retracting,” aviation consultant Brendan Sobie said.

“It is a risky strategy, but also sensible given its position and overall diversification objective.”

TOURISM PUSH

However, any airline requires substantial start-up capital and experts warn that if Saudi Arabia’s ambition is to compete on transit flights it may have to contend with years of losses.

Saudi Arabia’s large population generates direct traffic that could cushion losses as a new airline targets international transit traffic, aviation consultant John Strickland said.

Emirates reported a record $5.5 billion annual loss last month with the pandemic forcing Dubai to step in with $3.1 billion in state support.

Etihad Airways has scaled back its ambitions after it spent billions of dollars to ultimately unsuccessfully compete in building a major hub in United Arab Emirates capital Abu Dhabi.

People familiar with the matter said the new airline could be based in the capital Riyadh, and that sovereign wealth fund PIF is helping set it up.

PIF did not respond to a request for comment.

Saudi Arabia is developing non-religious tourism with mega projects backed by PIF. It has launched social reforms to open up the country, the birthplace of Islam, including allowing public entertainment.

Reporting by Alexander Cornwell; Editing by Tim Hepher and Alexander Smith

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Tesla shares drop after muted Q1 results as a global chip crunch persists

Shares of Tesla Inc (TSLA.O) fell more than 4% on Tuesday as its first-quarter earnings results failed to alleviate investor concerns about its lofty evaluation, as well as a prolonged global chip shortage and rising competition.

The electric car maker’s quarterly revenue made it barely past estimates, relying mostly on sales of environmental credits sold to other automakers and the liquidation of 10% of its $1.5 billion bitcoin investment.

“Tesla’s performance was OK but it wasn’t a Elon Musk slam dunk…I don’t think people are into Tesla because of bitcoin,” said Eric Schiffer, CEO of private equity Patriarch Organization, which has an underweight stance on Tesla.

“Investors are rejecting the stock short term,” he said, saying Tesla’s performance has fallen short of catching up its “astronomical valuation.”

Musk, the company’s CEO, did earn options payouts worth $11 billion based on targets reached by the company.

Shares of the automaker closed down 4.5% at $704.74, down more than 20% from its intraday high reached in January. They had surged more than 700% last year, making Tesla the world’s most valuable automaker.

Tesla posted record deliveries in the first quarter despite a global chip shortage that has slammed auto sector rivals. But analysts said a prolonged shortage of chips and batteries could threaten to dampen its growth prospect.

“A global shortage of computer chips is expected to limit production from all manufacturers in the immediate future, and Tesla won’t be exempt,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

“Given the ongoing importance of its production ramp up, it may even be more heavily impacted.”

Regarding supply chain instability, Tesla Chief Financial Officer Zachary Kirkhorn said on Monday, “We believe that this landscape is improving, but it does remain difficult, and it’s an evolving situation.”

Roth Capital Partners said it holds a neutral rating on Tesla, saying that Tesla’s large premium “seems to rest on the specious assumption that the hundreds of EVs slated for launch by ’25 will all be flops.”

“Tesla does not operate in a vacuum,” it said in a report.

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