NUCLEAR RENAISSANCE: Areva Investing at Least $7 Billion in Atomic Fuel

NUCLEAR RENAISSANCE: Areva Investing at Least $7 Billion in Atomic Fuel
Areva SA., the world's biggest nuclear-reactor manufacturer, is investing more than $7 billion in uranium mines and an ore enrichment plant to satisfy rising demand for non-polluting atomic energy.

The Paris-based company is deepening its investment in atomic fuel as it expects more than 300 gigawatts of nuclear capacity to be added globally by 2030, Areva SA Board Member Luc Oursel said at a nuclear energy conference in Tokyo.

Demand for atomic energy is spurring orders for reactors and boosting contracts to prolong the lifespan of existing plants while manufacturers intensify efforts to extract, enrich and recycle ore. Areva and Mitsubishi Heavy Industries Ltd. said they are expanding their alliance to include nuclear fuel sales.

``The world wants more energy for less carbon dioxide,'' Oursel said at the annual Japan Atomic Industrial Forum today.

Areva will invest more than $2.3 billion in uranium mines and at least 3 billion euros ($4.7 billion) in an enrichment plant. ``Areva is preparing to contribute to the nuclear renaissance,'' Oursel said. ``Our ambition is to make the renaissance certain.''

He forecast installed nuclear capacity to rise to 635 gigawatts in 2030 from 372 gigawatts in 2006. The estimate is moderate compared with other forecasts, some of which are as high as 800 gigawatts, said Oursel, who is also the chief executive officer of the company's reactor-building unit Areva NP.

Nuclear Renaissance
Orders for reactors and atomic fuel are rising at the fastest pace since the 1990s as demand for cleaner-burning fuels grows, crude oil prices surge and nuclear plant builders reassure the public that atomic energy is safe. An explosion at the Three Mile Island plant in Pennsylvania in 1979 and a reactor meltdown in Chernobyl in 1986 had sparked safety concerns.

Areva, the world's third-biggest uranium producer, on April 11 said it will team up with Mitsubishi Heavy to sell nuclear fuel, mainly to Japan. Separately, it won 2 billion euros of fuel supply contracts from Japanese utilities, Chief Executive Officer Anne Lauvergeon said.

The deals with Japan's utilities came almost a year after the French company said it would be getting more than 1 billion euros for an order from Korea Hydro & Nuclear Power Ltd., a unit of Korea Electric Power Corp., to enrich uranium. Ore must be enriched before it can be used to fuel light-water reactors.

Enrichment Plant
Areva, which accounts for 25 percent of the world's enrichment capacity, is currently building the Georges Besse II plant in South France to enrich ores. Commercial operation is slated for the middle of 2009.

The atomic reactor builder has stakes in uranium mines in countries such as Niger, Australia and Canada. It bought UraMin Inc., a South Africa-based mining company, for about $2.5 billion last year, when uranium prices touched a record $138 a pound.

Currently, 439 reactors are in operation worldwide, according to the International Atomic Energy Agency.

Source: Bloomberg|by Megumi Yamanaka

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