Energoatom signs uranium supply contract

11 June 2008

Ukraine's state-owned nuclear generator, Energoatom, has signed a long-term contract with the Eastern Ore Dressing Combine (VostGOK) for the supply of uranium concentrate.

Under the terms of the agreement, between 2008 and 2018, VostGOK will supply its entire uranium concentrate production - some 800 to 900 tonnes annually - to Energoatom for use in the fabrication of fuel for use in Ukrainian nuclear power reactors.

Energoatom said, "the signing of the contract provides an opportunity in the long term for the guaranteed supply of up to 30% of the raw material needs for the fabrication of nuclear fuel for Ukrainian nuclear power plants, as well as creating favourable conditions for sustainable operation of enterprises as it will avoid adverse effects of unforeseen price fluctuations that characterise the world uranium market."

The agreement was signed under the framework of the regulation on "Energy Strategy of Ukraine up to 2030" signed by the cabinet in March 2006. The strategy foresees Ukraine increasing its own production of uranium concentrate to become self-sufficient in meeting the needs for fuel of its nuclear power plants.

In March 2008, US-based Westinghouse agreed to supply nuclear fuel to three Russian-designed power reactors in Ukraine. The company will supply a total of 630 nuclear fuel assemblies to the three VVER-1000 pressurized water reactors at the South Ukraine nuclear power plant. Until now virtually all nuclear fuel has been supplied by Russia's TVEL. Nuclear power provided 48% of Ukraine's electricity in 2007.

TVEL signed a contract in January 2007 with Energoatom for the supply of fuel for Ukraine's nuclear power plants in 2007. The contract was signed by TVEL's acting president, Anton Badenkov, and the president of Energoatom, Andrey Derkach, during a meeting in Moscow. Derkach stated that Energoatom "views TVEL as a key strategic partner for long-term supplies of nuclear fuel to Ukrainian nuclear power plants."

The meeting also discussed possible cooperation in the nuclear fuel cycle, particularly establishing a facility in Ukraine during 2008 to fabricate nuclear fuel components for Ukrainian nuclear power plants.

Ukraine has 15 nuclear power reactors at four nuclear power plants (Khmelnitski, Rovno, South Ukraine and Zaporozhe), all operated by Energoatom. All the units are Russian VVER types, two being 440 MWe V-312 models and the rest the larger 1000 MWe units - two early models and the others V-320s. In 2007, 48% of Ukraine's electricity was produced by its nuclear plants.