Platts - Friday, May 23, 2008 http://www.platts.com ------------ Five companies win bids for DOE uranium mining leases Washington (Platts)--23May2008 The US Department of Energy said Thursday it has provisionally accepted bids from five companies that want to lease federal land in southwestern Colorado and mine the parcels for uranium. The companies submitted the high bids for 17 parcels. DOE said it did not receive any bids for two parcels. Golden Eagle Uranium won seven leases, Energy Fuels Resources and US Uranium Corp. won four leases each and Black Range Minerals Colorado and Sweetwater Holding won one lease each. The apparent winning bidders have until Thursday to provide DOE with information such as confirmation of their financial ability to perform and their ore-production capabilities. The new leases are expected to be awarded by the end of June. DOE said it conducted the public bid opening May 15 in Denver, Colorado, and 13 entities submitted 59 bids. The winners, subject to verification, were identified based on the highest royalty percentage bid on the fair-market value of ores produced, it said. High bids ranged from 7.67% to 28.61% of fair-market value that will be paid to the US government as royalties, the department said. DOE's Uranium Leasing Program offers the 10-year leases to private companies for the exploration, development and production of uranium and vanadium ores. DOE has said it was offering additional leases under the just-ended bid process to take advantage of high uranium prices and to contribute to the domestic market for this ore. The spot price of uranium was at $60/pound this week, with some indications that it may have hit its bottom. About a year ago, the spot price was $120/lb. DOE has said production from its lease tracts could approach 2 million lb of uranium annually in a world market that produces about 100 million lb. Royalties from uranium and vanadium leases could total $10 million annually, it said. --Tom Harrison, tom_harrison@platts.com ------------ China, Russia sign $1 billion nuclear deal Moscow (Platts)--23May2008 Russia and China have signed an agreement worth more than $1 billion on construction of a uranium enrichment factory as well as supplies of Russian low-enriched uranium to China, the head of Russia's state-run Rosatom nuclear corporation Sergei Kiriyenko said in televised comments Friday. The agreement provides for "the construction of the forth stage of the uranium enrichment factory as well as supplies of [Russian] low-enriched uranium to China," Kiriyenko said in Beijing as broadcast by Russia's Vesti channel. "This is a big good contract for 10 years to come," he said. Russia has built several uranium-enrichment factories in China and the Asian partners "now want us to build another, more up-to-date factory," he said, adding that the parties had also agreed to increase volumes of low-enriched uranium supplies to China. The agreement was signed during Russia's president Dmitry Medvedev's visit to Beijing, following his meeting with China's leader Hu Jintao. Medvedev paid his first official visit abroad as Russian President to Kazakhstan on Thursday and Friday and earlier in the day arrived to neighboring China for the two-day visit. After the meeting with Hu, Medvedev said that Russia and China agreed to further develop cooperation between the two countries, with the priority to be given to high-technology industries such as civil aviation, nuclear energy, space, information and nanotechnologies. "We have agreed this year to approve a new program to fulfill 'the major' agreement for 2009-2012," Medvedev said. Following the talks between Medvedev and Hu, Russia and China have signed a joint declaration on international issues as well as several agreements on cooperation in the aviation, defense, tourism, forest industries as well as in banking sphere. Medvedev had invited Hu to pay a visit to Russia in 2009, Russia's Itar-Tass news agency said. "We will be waiting for the China's leader Hu Jintao in Russia next year," Medvedev was quoted as saying. --Nadia Rodova, nadia_rodova@platts.com ------------ Russia's new energy ministry may be up and running next week Moscow (Platts)--23May2008 Russia is expected to complete the split of its industry and energy ministry into two separate bodies next week, as new energy minister Sergey Shamtko will soon get deputies appointed to him, a representative of the new industry and trade ministry said Friday. The change from having a single ministry for industry and energy is the result of a cabinet reshuffle by new Russian President Dmitry Medvedev earlier this month. In the reshuffle, former industry and energy minister Viktor Khristenko moved to head the new industry and trade ministry, while the newly created energy ministry got Shmatko, the former president of Atomstroyexport, a state-owned nuclear, equipment and services company. Two of Khristenko's former deputies, Andrey Dementyev, who was in charge of energy, and Denis Manturov, who oversaw industry, followed their former chief to the new industry and trade ministry. They were appointed to their new deputy minister posts on May 19, a spokesman with the ministry said. New energy minister Shmatko, meanwhile, will get deputies soon after Prime Minister Vladimir Putin issues a ruling on the new ministry, a spokeswoman for Shamtko said. The ruling will define the structure and objectives of the new ministry, after which there will be legal and financial grounds to appoint deputies, she added. "We have to start from scratch," she said. She declined to comment on a media report Friday that said Anatoly Yanovsky, former deputy industry and energy minister, could be appointed as one of Shmatko's deputies. "The team will be formed taking into account professional qualities of the candidates," she said, declining to speculate on possible nominees. Russian business daily Kommersant reported Friday that Yanovsky's candidacy was already approved by Igor Sechin, deputy prime minister in charge of energy and industry. ------------ Suspects arrested at Oskarshamn released Stockholm (Platts)--22May2008 Two men arrested on suspicion of trying to sabotage the Oskarshamn nuclear power plant in Sweden have been released, police said at a webcast press conference May 22. Police spokesman Sven-Erik Karlsson said the men are still under suspicion but there was not sufficient evidence to continue holding them. They were taken into custody May 21 after what plant management and police said were traces of the explosive triacetone triperoxide were found on a bag that one of them was carrying. Police said they had reason to believe the two were in collusion. The two men are welders employed by a contractor hired by Oskarshamn to do work during unit 2's annual maintenance outage, which began May 10. Plant management said it expects the unit to return to service June 4, as scheduled. The explosive is the same type believed to have been used in a London terrorist bombing in 2005. The traces were sent to the Swedish National Forensic Laboratory for testing and police said the prosecutor in the case will wait for the results before deciding whether to press charges. Bomb-sniffing dogs found no explosives or bombs at Oskarshamn-2. Oskarshamn-1 was shut down May 21 and is also being checked because the men had access to areas common to both units. Oskarshamn management said in a statement May 22 that the unit is expected to restart May 24, assuming nothing harmful is found. ------------ Security scare forces Swedish nuclear unit offline London (Platts)--22May2008 New information about a security scare has forced the operator of the 2,311 MW Oskarshamn power station to take a unit offline Wednesday night, operator OKG said Thursday. The closure of the 491 MW unit, known as 01, will allow a "thorough police search" to take place, OKG managing director Lars Thuring said in a statement. The measure follows the arrest yesterday of two welding contractors on suspicion of planning to sabotage Oskarshamn. One of the men was found with traces of the highly explosive TAPT in a random search carried out early Wednesday morning. OKG said that shutdown was activated when it emerged that the men had been given access to certain areas of the O1 unit. The men had been working on the O2 unit, which was already decommissioned for maintenance. "Nothing in our surveillance system suggests that they [the two men] actually entered O1, but as an extra precaution we have chosen to take O1 offline," Thuring said. He added that O2 would also be searched by police and that 03 would remain online because the sabotage suspects did not have access to it. "We take what has happened very seriously and we are doing everything, together with police, to clear up the incident," Thuring said. Oskarshamn comprises three units, 01 at 491 MW capacity, 02 at 623 MW and 03 at 1,197 MW. The facility is 54.5% owned by OKG parent company E.ON Sverige, a subsidiary of German utility giant E.ON, and 45.5% by Finnish energy major Fortum. ------------ Two men arrested at Sweden's Oskarshamn plant Stockholm (Platts)--21May2008 Two men have been arrested on suspicion of planning to sabotage the Oskarshamn nuclear power plant in Sweden, police spokesman Sven-Erik Karlsson said May 21. Karlsson declined to give details about what the men said during questioning, but said the pair are welders employed by a contractor hired by Oskarshamn and at least one was working in a secure area. Traces of a powerful explosive were found on the surface of a bag one of the men was carrying into the plant during a random security check the morning of May 21, a plant spokesman said. An area around the plant entrance was closed off after the discovery and about 100 employees in the area were evacuated and subsequently sent home. Police said it is suspected that this type of explosive was used in a terrorist attack in London in 2005. In that attack, more than 50 people were killed by bombs detonated in subway trains and on a bus. Oskarshamn spokesman Anders Oesterberg said the areas where the men were working will be searched by bomb-sniffing dogs, which were expected to be at the plant later that day. In a statement, officials at the Swedish Nuclear Power Safety Inspectorate said they were following the situation but that they considered it a police matter and that security had not been stepped up at Sweden's other two nuclear plants. ------------ Australian uranium miner Paladin Energy to launch trading unit Barcelona (Platts)--21May2008 Australian uranium miner Paladin Energy is expected to formally announce next month the creation of trading arm Paladin Nuclear, a company official said on Wednesday. "We're looking at getting some senior personnel, extremely experienced people in addition to our own" for the US, Asia and Europe," Paladin Energy Managing Director John Borshoff said in a conference call to discuss the company's fiscal third-quarter financial results. Borshoff said the trading arm would be not "just a sales portal, but would leverage us with opportunities in other areas." He did not elaborate. The company has a strategy and a plan for the trading subsidiary and "we're in the process of staffing up and deploying it," added James Eggins, Paladin Energy general manager for sales and contract administration. Borshoff said the uranium market "continues to confound, even though I believe the market fundamentals remain very strong." He said there are a large number of investment funds "with an overwhelming interest to try to understand the uranium market, but there remains some confusion. I believe it's very much alive and kicking. ...We've had a supply industry in decline for the past decade or two," he said. Added to that is the fact that new mine projects and expansions have been plagued by delays and problems. "Increasing production will not be easy now or in the future. India and China have not yet built up strategic inventories ...[and] it's not the environment for an orderly escalation of the market [prices]," he said. He said the pressure on buyers is going to be to enter the market sooner rather than later and to buy more rather than less. Inevitably, some form of panic sets in, he said. Uranium analysts, who are looking at uranium only as a product, have "not yet observed" the bigger picture, Borshoff said. He said the spot price has probably bottomed at $60/pound U308 and believes the market will turn around this year. But in the meantime, he said, Paladin is certainly looking at third party purchases of uranium in the current low spot price environment. --David Stellfox, david_stellfox@platts.com ------------ Fennovoima picks candidate reactor designs for new Finnish plant Washington (Platts)--20May2008 Fennovoima is considering Areva and Toshiba-Westinghouse designs for its new nuclear power plant, the Finnish company's management said in a statement May 20. Fennovoima is considering Areva's 1,600-MW EPR and 1,250-MW SWR-1000 BWR and Toshiba-Westinghouse's 1,650-MW ABWR. Fennovoima is looking at the SWR-1000 because it is considering building two smaller reactors instead of one larger one. The Finnish Radiation and Nuclear Safety Authority expects to begin discussions with Fennovoima on the designs this month. Areva and Siemens are building the world's first EPR, an advanced PWR, for Teollisuuden Voima Oy at Olkiluoto. ------------ Areva readying for plutonium shipment from UK Paris (Platts)--19May2008 Areva is preparing to receive a shipment of plutonium from the UK, the French group announced May 19. The plutonium oxide is being shipped from the reprocessing complex operated by Sellafield Ltd. in Cumbria to Areva's La Hague reprocessing complex in Normandy for repackaging, Areva said. It will then be sent to Areva's Melox plant near Avignon, where it will be fabricated into mixed-oxide fuel for customers of Sellafield Ltd., Areva said. The company said all the required transport permits had been granted and that the precise arrangements would be kept confidential. ------------ Entergy, union leaders sign new labor contract at Pilgrim Washington (Platts)--16May2008 A strike at Pilgrim was averted when Entergy and union officials signed a new, four-year labor contract May 15, less than four hours before the old contract was to expire, said plant spokesman Dave Tarantino. Entergy, the plant's operator, was prepared with a contingency plan to maintain operations, he said. But talks with the Utility Workers Union of America Local 369, which represents about 250 union employees at the plant, concluded about 8:30 pm. "Both sides seem satisfied," Tarantino said. ------------ Wolf Creek license extension poses no environmental problems: NRC Washington (Platts)--16May2008 The US Nuclear Regulatory Commission on Friday said there are no "environmental impacts that would preclude" extending for 20 years the operating license of the 1,170-MW Wolf Creek nuclear plant near Burlington, Kansas. The unit is owned by Midwest utilities Westar Energy, Kansas City Power & Light and Kansas Electric Power Cooperative, which submitted a license extension application to the NRC in Ocober 2006. The agency's conclusion was contained in a final environmental impact statement. The Wolf Creek unit's current operating license expires March 11, 2025. NRC said staff is now completing a safety evaluation report that will be evaluated by the agency's Advisory Committee on Reactor Safeguards. Once the committee makes its recommendation, the agency will make a final decision on the request. ------------