A joint venture is to be created to manufacture nuclear fuel from Kazakh uranium using French technology and sell it to the Asian market as an integrated product.
The parties involved are France's Areva and KazAtomProm of Kazakhstan and the deal follows an earlier joint venture to mine uranium in Kazakhstan. The agreement was signed in the Kazakh capital Astana by Vladimir Shkolnik, president of KazAtomProm, and Areva CEO Anne Lauvergeon during an official visit by President Nicolas Sarkozy of France.
Areva will hold a 51% stake in the joint venture - to be known as Ifastar - with KazAtomProm holding the remaining 49%. A framework agreement to establish the joint venture was signed last month. The formation of Ifastar, to be based in Paris, is aimed at boosting both companies' position in Asia.
In a joint statement, Areva and KazAtomProm said that Ifastar would initially assess the Asian market "in view of selling integrated fuel packages (including all front-end segments and combining KazAtomProm's uranium resources and Areva's fuel technology) to electric utilities operating in Asia."
In addition, Ifastar will assess the technical and economic feasibility of the construction of a dedicated 400 tonne per year fuel manufacturing line at KazAtomProm's Ulba Metallurgical Plant site in Kazakhstan.
Depending on the conclusion of Ifastar's assessment and further decisions by the partners, Areva would handle sales of fuel manufactured on this production line, while the fuel manufacturing itself would be performed by another joint venture, in which KazAtomProm would hold 51% and Areva 49%.
Shkolnik said, "The signing comes as a further result of a constructive long-term relationship between KazAtomProm and Areva and is, for us, a further milestone in establishing a vertically-integrated company, producing a value-added product - fuel assemblies."
Lauvergeon added, "This agreement reinforces the strategic partnership between Areva and KazAtomProm. It will contribute to the diversification and security of our supplies by increasing available uranium resources for our customers."
The formation of the Ifastar joint venture follows the signing in June 2008 of a strategic agreement between Areva and KazAtomProm in the front end of the nuclear fuel cycle. That agreement set forth the key terms and conditions for fuel marketing and manufacturing projects in Kazakhstan. Under the terms of the agreement, production from the existing Katco uranium mining joint venture was to be expanded from 1500 tonnes of uranium per year to 4000 tonnes, with Areva handling all sales. It also aimed to draw on Areva's engineering expertise in a second joint venture (49% owned by Areva) to install 1200 tonnes per year of fuel fabrication capacity at the Ulba Metallurgical Plant. A third joint venture (51% held by Areva) was to market fabricated fuel.
The Katco joint venture was originally formed by Cogema and the Kazakhstan State Corporation for Atomic Power and Industry (KATEP) in 1996 to work on the development of uranium resources in Kazakhstan. In 1999, the company received a licence to explore and mine the Muyunkum site located in the south of the country.
After three years of successful operation of a pilot production plant at Muyunkum, Areva and KazAtomProm signed an agreement in April 2004 to start the industrial phase of a joint production project. Katco completed construction of the first processing plant at the end of 2005. Commercial operations at the Katco joint venture - which includes the Moynkum in-situ leach (ISL) uranium mine - in June 2006. The target annual production capacity of the joint venture is 1500 tU (1770 tonnes U3O8). The project has geological reserves totalling 28 661 tU (33 800 tonnes U3O8).