Areva unit seeks US permit for uranium enrichment

LOS ANGELES Wed Dec 31, 2008 1:02am GMT

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LOS ANGELES Dec 30 (Reuters) - A unit of France's Areva Group CEPFi.PA on Tuesday applied to the U.S. Nuclear Regulatory Commission for permission to build a $2 billion uranium enrichment plant in Idaho, the company said.

Areva Enrichment Services, based in Bethesda, Maryland, last May announced plans to build the Eagle Rock Enrichment Facility 18 miles from Idaho Falls. The plant, which will be near a federally run lab where nuclear energy work has been done for more than 50 years, is to open in 2014.

Areva is one of three companies planning newer-technology uranium enrichment plants to serve the 104 U.S. nuclear power reactors. Every year, these reactors need 13 million to 14 million separative work units (SWU), which measure the amount of work expended during uranium enrichment.

Three new U.S. uranium enrichment plants are to have the capacity to produce nearly 13 million SWU a year by 2015.

If an expected renaissance for nuclear power in the United States occurs, need for all three new plants is clear. The three companies said that even if demand does not grow as expected, there will be enough demand for all three plants, including supplying the international uranium market.

The NRC says it expects to get applications for construction of 34 nuclear reactors by 2010, and has already received license applications for about half that figure.

The only U.S.-based uranium enrichment plant now in operation is owned by USEC Inc USU.N in Paducah, Kentucky. That plant can make up to 6 million SWU a year. Its gaseous diffusion technology is more than a half century old and uses 95 percent more electricity than the newer centrifuge technology of the three new plants.

Areva's Idaho plant will be capable of producing 3 million SWU a year, said company spokesman Jarret Adams.

USEC may lower production in Kentucky once it opens -- expected by 2012 -- a 3.8-million SWU/year centrifuge plant on the site of its shuttered gaseous diffusion plant in Piketon, Ohio. The new USEC plant is to cost about $3.5 billion and is under construction, said USEC spokesman Jeremy Derryberry.

European consortium Urenco's Louisiana Energy Services (LES) began construction in 2006 of the biggest new centrifuge enrichment plant, called the National Enrichment Facility, in Eunice, New Mexico.

It is to open its first stage by fall 2009 and by 2011 be able to make 3 million SWU a year. Full build-out by 2014 will allow 5.9 million SWU a year, said LES spokeswoman Brenda Brooks.

LES will not say more about the cost of the plant than it will be more than $3 billion.

Areva's Adams said the NRC is expected to take up to 2.5 years to decide on the Idaho plant application.

The U.S. Department of Energy plans to issue $2 billion in loan guarantees for uranium enrichment and both Areva and USEC have applied for the full $2 billion in loan guarantees.

Tax incentives of about $400 million offered by Idaho for the new plant helped Areva decide on Idaho rather than a proposed site in New Mexico, an Areva spokesman said in May.

The French government owns more than 80 percent of Areva Group. (Editing by David Gregorio)

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