Platts - Thursday, July 03, 2008 http://www.platts.com ArcelorMittal and Areva ink Eur70 million capacity increase plan London Steel giant ArcelorMittal and nuclear power firm Areva Thursday signed a Eur70 million ($111.2 million) investment agreement aimed at increasing production at AM's Industeel subsidiary, the steelmaker confirmed in a statement. The investment program at Industeel, which produces steel products for the nuclear industry, will be staggered between 2008 and 2010 and see steel ingot production increased to 50,000mt/year from the current 35,000mt, said AM. Additionally, the two companies are to implement a joint three year R&D program at the Creusot Materials Research Centre, added the statement. This latest investment, according to AM, underlines its commitment to France, and is part of a Eur1 billion steel plant development program. French president Nicolas Sarkozy joined AM's chief financial officer Aditya Mittal and Anne Lauvergeon chairman of AREVA's executive board at the signing ceremony. SECOND EPR TYPE NUCLEAR REACTOR PLANNED During his visit to Creusot, Sarkozy said France planned to build a second EPR (European Pressurized Water) type nuclear power reactor which would be developed by Areva, French radio reported. The French president did not say where or when construction of the new reactor would start. However, according to French business daily Les Echos Thursday the plant could start operations by about 2017. Sarkozy's press office, which earlier Thursday confirmed that the president was about to make an announcement over an EPR, was unavailable immediately to provide further details. French prime minister Francois Fillon recently told French television that the government was "thinking" about a second EPR. "We want nuclear energy to be one of the main responses to the oil crisis," he said. State run utility EDF started building a Eur3 billion EPR in Flamanville, north west France last December. The 1,650MW plant is scheduled to come on line in 2012. Meanwhile, Areva and Germany's Siemens are building another EPR in Finland, but construction has been beset with delays and is now due on line in 2011, 18 months behind schedule. France's decision to build an EPR at Flamanville provoked a hostile reaction from French anti-nuclear campaigners who recently opened a new campaign against the building of the reactor blocking for several days three quarries used by EPR builders near Flamanville. --David Beattie, david_beattie@platts.com --CHRIS EALES, newsdesk@platts.com ------------ With NRC uprate approval, NPPD's Cooper to add 15 MW Washington (Platts)--2Jul2008 NRC has approved a power uprate at Cooper that will add roughly 15 MW of generating capacity at the Nebraska Public Power District reactor. NRC said in a July 2 press statement that once implemented, Cooper's gross generating capacity will be 830 MW. NRC staff had determined that NPPD could safely increase the output by using a means to more accurately measure Cooper's feedwater flow. NRC said that its safety evaluation of the proposed uprate focused on such things as the nuclear steam supply systems, instrumentation and control systems, accident evaluations, radiological consequences, operations and training, testing, and technical specification changes. Agency staff also reviewed NPPD's evaluation that showed that the plant design can safely handle the increased power output. NPPD intends to implement the uprate later this summer, NRC said. ------------ Bush urges 'all parties' to resolve Iran issue diplomatically New York (Platts)--2Jul2008 US President George Bush Wednesday said he has urged all sides in the dispute over Iran's nuclear development program to seek a diplomatic resolution to the standoff. Following his televised comments about the upcoming G8 summit in Japan, Bush was asked by reporters about the prospect of Israel unilaterally launching a military strike against the Iranian nuclear facilities. He responded that while "all options are always on the table," his "first option is to solve this problem diplomatically.... I've made it very clear to all the parties that the first option is to solve the problem diplomatically." In June, Israel conducted a major military exercise over the eastern Mediterranean Sea, which heightened speculation that it was preparing to attack the Iranian nuclear facilities. Iranian officials subsequently threatened to shut the Strait of Hormuz, a key shipping lane for Mideast oil, if it were attacked. The Strait of Hormuz is the passageway to around 20% of the world's oil supplies, including exports from fellow OPEC-member countries Iraq, Kuwait, Qatar, Saudi Arabia and the UAE. Iran is OPEC's second-largest producer behind Saudi Arabia. ------------ Uranium One gets credit facility, hikes Kazakhstan output plans London (Platts)--2Jul2008 Canada-based Uranium One has secured a US$100 million loan facility from the Bank of Montreal and the Bank of Nova Scotia, the company said Wednesday. At the same time it announced early approval for hiking production from South Inkai, its pre-commercial joint venture mine in Kazakhstan, to 5.2 million pounds/year of U3O8 from from 780,000 lbs/year of U3O8. Uranium One's share of the higher production figure would be 3.6 million lbs/year of U308. The Kazakhstan Ministry of Energy and Mineral Resources has approved the application by Uranium One's 70%-owned Betpak Dala affiliate for an amendment to the South Inkai mining license for the increased production levels. The amendment is subject to the approval of reserves by the State Committee for Geology. State-owned Kazatomprom owns the other 30% of the South Inkai project. The amendment to the mining license, previously anticipated to be granted in the first half of 2009, now is expected to become effective in the second half of this year, Uranium One said. South Inkai is continuing to exceed expectations, the company said, and from January 1 to the end of May 2008 total pre-commercial production from the mine was about 479,500 lbs U3O8, with 335,600 lbs attributable to Uranium One, the company said. The $100 million loan facility has a two-year term, which may be extended for a further year with lender consent, Uranium One said. Drawdowns under the facility may be used for general corporate purposes, including working capital requirements and funding capital expenditures and acquisitions. In addition to the funds available under the facility, as at June 15, the company said its consolidated cash position was about $145 million. Meanwhile, Uranium One reported increased 2008 second quarter sales volumes at 180% above Q2 2007 and 142% above Q1 2008, the company said Wednesday. Q2 sales hit 685,000 lbs U308, Uranium One said. In addition to developing South Inkai, Uranium One owns 70% of the operating Akdala uranium mine in Kazakhstan and also is developing the Kharasan uranium projects in Kazakhstan. Uranium One owns the Dominion project in South Africa, as well as the Honeymoon uranium project in South Australia. The company said May 15 it was abandoning development of the Honeymoon project to focus on its projects in Kazakhstan, South Africa and the US. The company is widely expected to sell Honeymoon. Dominion and South Inkai began production last year. --David Stellfox, david_stellfox@platts.com ------------ NRC approves uprate for Davis-Besse Washington (Platts)--1Jul2008 NRC approved a 1.6% uprate for Davis-Besse June 30, the agency said in a July 1 press statement. The increase would come primarily from more accurate means of measuring feedwater flow, NRC said. The uprate will increase the capacity of the Ohio PWR from 893 MW to 905 MW, the agency said. Todd Schneider, a spokesman for operator FirstEnergy Nuclear Operating Co., said that was the figure for net capacity. Gross capacity will rise from 944 MW to 956 MW, he said. According to NRC, Fenoc intends to implement the uprate this summer; Schneider confirmed that timetable but declined to be more specific. ------------ Uranium spot price jumps near $60/pound; is poised to go higher Washington (Platts)--1Jul2008 The spot price of uranium jumped $2 to $59/pound, according to TradeTech and Ux Consulting reports released Monday, but that price "may already be in the rearview mirror" of buyers and sellers, said one analyst. The price is "tickling $60/lb" Tuesday, but even that price may not hold for more than a day or two, he said, adding there are scenarios where the could jump to $65/lb "virtually overnight" if demand from investment companies surges. Already Investment fund Nufcor Uranium Ltd. announced Monday that it intends to sell more shares to raise money to buy physical uranium. Nufcor Uranium currently holds 2.3 million lb of U3O8 and 200,000 kilograms uranium as UF6. A separate company, Nufcor International, acts as a consultant to Nufcor Uranium and owns 8% of Nufcor Uranium's issued share capital. Nufcor International was sold to a Constellation Energy Group subsidiary. New uranium market demand also surfaced when Taiwan Power reentered the market late last week, seeking 300,000 lb U3O8 equivalent. Platts NuclearFuel's price range for the week was $55-$60/lb U3O8. ------------ NRC approves uprate for Davis-Besse Washington (Platts)--1Jul2008 NRC approved a 1.6% uprate for Davis-Besse June 30, the agency said in a July 1 press statement. The increase would come primarily from more accurate means of measuring feedwater flow, NRC said. The uprate will increase the capacity of the Ohio PWR from 893 MW to 905 MW, the agency said. Todd Schneider, a spokesman for operator FirstEnergy Nuclear Operating Co., said that was the figure for net capacity. Gross capacity will rise from 944 MW to 956 MW, he said. According to NRC, Fenoc intends to implement the uprate this summer; Schneider confirmed that timetable but declined to be more specific. ------------ Constellation Energy purchases Nufcor International Washington (Platts)--30Jun2008 Constellation Energy Commodities Group ltd. has purchased Nufcor International Ltd., a leading uranium market participant. Thomas Brooks, executive vice president of parent Constellation Energy, announced the acquisition in a June 30 press statement, calling it a "natural extension of Constellation Energy's expanding global commodities business." Constellation declined to release any information on the value of the deal. Constellation Energy Commodities Group bought 100% of the shares of Nufcor from AngloGold Ashanti Ltd. and FirstRand International Ltd., both of which are South African businesses. Constellation Energy said that Nufcor will "be actively exploring new risk management offerings to the increasingly sophisticated financial uranium buyers in North America, Europe and Asia-markets where Constellation Energy already has a strong commodities presence." Nufcor markets uranium for South African producers and has expressed interest in hedging uranium prices. It is a leading trader of uranium as both a buyer and a seller. Nufcor, through its subsidiary Nufcor Capital Ltd., will continue to be the uranium market adviser to Nufcor Uranium Ltd., Constellation said. It added that "the closed-ended uranium investment company on the LSE [London Stock Exchange] is exploring a secondary listing on the Toronto Stock Exchange later this year." ------------ Domenici offers bill to use waste fund to pay for recycling Washington (Platts)--27Jun2008 The top Republican on the US Senate Energy and Natural Resources Committee, Pete Domenici of New Mexico, introduced a bill Friday that would authorize the federal government to help pay for two spent fuel recycling and storage facilities. "There can now be no doubt that a nuclear renaissance is underway," Domenici said in a statement. "Increasing our use of nuclear energy is the only way for America to meet our increasing energy demands while at the same time reducing our greenhouse gas emissions. A sustainable nuclear fuel cycle is the key to nuclear energy reaching its full potential." Domenici has often expressed frustration over DOE's inability to open the Yucca Mountain nuclear waste repository, which was first expected to be completed in 1998. The bill, dubbed Strengthening Management of Advanced Recycling Technologies Act, (S. 3215) also would grant DOE and its private sector partners access to about 5% of the $20-billion Nuclear Waste Fund. Using money from the waste fund would allow construction of recycling facilities without the need for annual congressional appropriations, according to Domenici. The bill also would create an economic incentive program for communities that want to host interim nuclear waste storage facilities. Currently, spent nuclear fuel is stored at the 104 reactor sites across the country. Republican Senators Jeff Sessions of Alabama, Lisa Murkowski of Alaska and Democratic Senator Mary Landrieu of Louisiana also sponsored the measure. --Dipka Bhambhani, dipka_bhambhani@platts.com ------------ Greenpeace resumes protest actions against Flamanville-3 Paris (Platts)--27Jun2008 Greenpeace resumed actions to block construction of the Flamanville-3 EPR June 27, the environmental group's French branch said. It said that in the early morning, about 15 Greenpeace activists had blocked the entrance to a cement factory near Caen, in Normandy. The factory makes all the cement that goes into the EPR?s concrete. The action followed the blockage, for more than 50 hours beginning June 24, of quarries in the area that supply sand and gravel to the Flamanville-3 construction project. Greenpeace said it was protesting regulator ASN's authorization to resume work on the construction despite what Greenpeace said were unanswered questions about the quality of the concrete and other problems. The group also said the French government should favor energy efficiency measures rather than a new nuclear power plant. Electricite de France, which is building the 1,650-MW EPR, said the actions hadn't delayed the project. ------------ URI says it has terminated Rio Algom purchase deal Washington (Platts)--26Jun2008 Uranium Resources Inc., or URI, said June 26 it can't come up with the financing needed to buy Rio Algom Mining LLC from BHP Billiton and will terminate the deal. The Texas-based URI entered into an agreement on October 12, 2007 with Billiton to buy Rio Algom's property in New Mexico. URI planned to seek a license from NRC to build and operate a conventional uranium mill as part of the acquisition. In a June 26 statement, URI said it and Billiton had decided to terminate their agreement. In a statement, URI President and CEO David Clark said "current market conditions have prevented us from securing the $180 million needed to finance the acquisition." URI operates two uranium mines in Texas. ------------