South Korea has officially begun crucial negotiations with the International Atomic Energy Agency (IAEA) regarding its plan to build nuclear-powered submarines (SSNs).
This isn't just a technical discussion; it's a major step in turning a long-held ambition into reality. The core issue is establishing a 'special safeguards arrangement'. Because South Korea is a non-nuclear-weapon state, it must create a bespoke agreement with the IAEA to ensure that the nuclear material used for submarine propulsion isn't diverted for weapons. This process, along with securing U.S. approval for nuclear fuel, is the main gateway to launching the program.
The entire initiative is driven by a clear and pressing security threat. First, North Korea has been accelerating its own nuclear and submarine programs, even claiming to be building its own nuclear-powered submarine. These provocations have shifted the strategic calculation in Seoul, framing SSNs as a defensive necessity rather than a mere aspiration. They would provide the South Korean Navy with a persistent capability to track North Korean threats underwater.
Second, this security need has been translated into political action. A key moment was the November 2025 U.S.-ROK summit, where the U.S. expressed support for Seoul's plan. This was followed by South Korea's Ministry of National Defense unveiling a formal 'Basic Plan' in May 2026, which laid out a concrete roadmap. The plan specifies using Low-Enriched Uranium (LEU), which is less of a proliferation risk, to make the IAEA agreement more attainable. This political groundwork paved the way for the current talks.
Finally, the market has been watching closely. When the Basic Plan was announced, shares of major shipbuilders like Hanwha Ocean and HD Hyundai Heavy Industries jumped nearly 10%. However, the stocks later gave back those gains as investors realized the complexities of securing IAEA safeguards and U.S. fuel rights. This shows how directly the program's progress is tied to these diplomatic and legal milestones. The future of South Korea's SSN program, and the fortunes of its defense industry, now hinge on the outcomes of these high-stakes negotiations in Vienna and Washington.
- IAEA Safeguards: A system of inspection and verification managed by the International Atomic Energy Agency (IAEA) to ensure that nuclear material is used only for peaceful purposes and not diverted to nuclear weapons.
- 123 Agreement: A bilateral agreement required by U.S. law (Section 123 of the U.S. Atomic Energy Act) for the United States to engage in significant nuclear cooperation with another nation. It establishes the terms for the transfer of nuclear material, equipment, and technology.
- Low-Enriched Uranium (LEU): Uranium that has a lower concentration of the fissile isotope U-235, typically less than 20%. It can be used as fuel for nuclear reactors but is not directly usable for nuclear weapons, making it a lower proliferation risk compared to Highly-Enriched Uranium (HEU).