Kazatomprom linked to Westinghouse stake

10 July 2007

Kazatomprom may purchase a 10% stake in Westinghouse. According to media reports, the nationalised uranium company is in the final stages of negotiation with Westinghouse's majority owners Toshiba.

Toshiba led a purchase of Westinghouse from the UK's state-owned BNFL in 2006 which valued the US-based reactor vendor at $5.4 billion. Toshiba holds 77%, The Shaw Group holds 20% and Ishikawajima-Hariwa Heavy Industries holds the remaining 3%.

The deal created a global nuclear business with major shares of both the pressurized and boiling water reactor markets in Europe, Japan and the USA. However, Toshiba had hoped to interest more investors in the Westinghouse purchase and has since been seeking to relieve the debt burden. Japan's Nikkei Daily put a price of $485 million on the 10% stake Kazatomprom could buy.

A deal between Toshiba and Kazatomprom would expand Westinghouse and Toshiba's combined capabilities through access to Kazakhstan's uranium reserves, which are the second largest in the world. The first core load of a nuclear power reactor typically requires around three times as much uranium as subsequent 12-18 month reloads. In addition, reactor vendors usually supply the first cores for their units.

Toshiba's original business plan for the Westinghouse purchase predicted the vendor would benefit from growth in the nuclear market, gaining nuclear reactor and related power equipment sales of around $2 billion per year by 2015. Toshiba did not, at that time, predict a significant increase in nuclear fuel business beyond current annual sales of around $750 million.

The link between Kazatomprom and Westinghouse comes after the 30 April announcement of a strategic alliance between Kazatomprom and Toshiba in the field of nuclear energy. T hat deal was signed as part of a larger Japanese diplomatic and industrial mission to firm cooperation between Japan and Kazakhstan.

The April agreement stated: " The companies will start discussions on constructing a mutually beneficial partnership in the nuclear fuel and nuclear power plant construction businesses, seeking to reinforce their business foundations by utilizing and taking advantage of their respective management resources and networks. "

Further information

Kazatomprom
Toshiba Nuclear
Westinghouse

WNA's Uranium and Nuclear Power in Kazakhstan information paper

WNN: Strategic alliance for Japan and Kazakhstan

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