Areva grows foothold in Japanese fuel market
11 April 2008
French fuel cycle company Areva has signed an agreement to expand its cooperation with Mitsubishi Heavy Industries (MHI) into the nuclear fuel business, as well as announcing the conclusion of front-end contracts with Japanese utilities worth €2 billion ($3.2 billion).
Areva CEO Anne Lauvergeon and MHI chairman Kazuo Tsukuda signed a memorandum of understanding to "contemplate the establishment" of a joint business organization for the supply of nuclear fuel for pressurized water reactors (PWRs), boiling water reactors (BWRs) and gas reactors, and mixed-oxide (MOX) fuel. The agreement is expected to implemented by the end of 2008. The cooperation agreement will focus on the Japanese market, and will also include discussion of potential investment by MHI in Areva's US fuel fabrication facilities.
Lauvergeon described cooperation in the fuel business as the "natural next step" in developing the companies' relationship. Hideaki Omiya, president of MHI, noted that his company already supplies fuel for 23 Japanese PWRs. Introducing Areva's BWR nuclear fuel technology would enable the joint business formation to supply fuels to both PWRs and BWRs in Japan, he added.
Last year the two companies set up Atmea, a 50-50 joint venture, to develop, market, license and sell a 1100 MWe PWR combining both companies' technologies. In today's joint statement, they note that development work on the Atmea-1 reactor is progressing towards the target of completing basic design work by the end of 2009. Design review by third parties is planned and customer visits have already started, they said.
The two companies also say that they will be working together on Areva's tender to build two EPRs in South Africa, extending a cooperation begun with the EPR that Areva is building with Siemens at Olkiluoto in Finland and for which MHI provided heavy forgings.
Front-end contracts
Meanwhile, Areva also announced that it has finalized contracts worth €2 billion ($3.2 billion) with Japanese utilities covering front-end services such as uranium supply, conversion and enrichment. Most are long-term contracts, covering up to 15 years. The utilities involved are, reportedly, Tepco, Japco, Kansai, Shikoku and Tohuko. "The group is truly honoured to have such a privileged relationship with Japanese utilities," said Areva CEO Anne Lauvergeon.