INTERVIEW-UPDATE 1-Areva in uranium drive to tap nuclear boom

* Areva looking at mining acquisitions of all sizes

* Sees durably high uranium prices

* Seeks new projects on geographical, maturity bases

(Adds further detail, quotes)

By Marie Maitre

PARIS, July 14 (Reuters) - Areva (CEPFi.PA) will forge ahead with the development of its uranium mining activities to meet growing global demand for the basic fuel for nuclear power, an official at the French state-owned nuclear reactor maker said.

New acquisitions and exploration efforts will help the world's second-biggest uranium producer double its ore output by 2012, and benefit from uranium prices that should rise further and stay high, Areva's mining chief Sebastien de Montessus said.

"Mining is one of Areva's key areas of development as part of our integrated (product) offer," Montessus told Reuters in an interview at Areva tower in Paris' La Defense business district.

"Areva's model is Nespresso," he said, referring to the coffee-capsule and machine maker. "We supply the machines, the reactors, and the capsules, the fuel," he said, citing as an example the record 8 billion euro ($12.6 billion) deal won by Areva last year to supply China with two new-generation EPR nuclear reactors, and 30,000 tonnes of uranium until 2025.

Rising oil prices and concerns about climate change have led many countries to search for cleaner alternatives, including nuclear power, to more polluting traditional sources of energy.

The prospect of dozens of new reactors coming on stream in the next 10 to 20 years has stoked uranium prices, which surged from $7 a pound in 2000 to a record high of $136 last year.

Even though spot uranium prices have since retreated to just under $60 a pound, Montessus said they should climb again and remain high, fuelled by stretched production capacities and rising costs to develop new projects.

"I think we are entering a period of durably high prices," Montessus said. "China, Great Britain, the United States, all these countries that are relaunching their nuclear programmes, will have to secure their uranium supply over the long term."

NO ACQUISITION TABOO

Rising prices have made the business a "profitable" one with "very attractive prospects" for Areva, which will dedicate "extremely significant" financial resources to develop it, Montessus said, declining to give figures.

Areva is prowling for acquisitions, smaller or bigger than UraMin, which the company bought for $2.5 billion last year -- scooping up the Canadian junior's uranium deposits identified in South Africa, Namibia and the Central African Republic.

"We have no taboo on this. The uranium market is promising and Areva wants to play a major role at this end of the nuclear power cycle so we're open to all opportunities, even significant ones," Montessus said.

"We're looking at companies with projects that will come on stream in 2020, and others that are already in production or will be so in the next few years," he said, adding there were only a handful of targets that could start production soon.

Areva is also investing 1 billion euros to launch mining at Niger's Imouraren site, and will spend another 1 to 1.5 billion euros in two other mining projects in Namibia and South Africa.

These new projects, along with sites already in production in Niger, Canada and Kazakhstan, will help double Areva's uranium output to 12,000 tonnes by 2012 -- a quarter of the world's total production -- from 6,000 tonnes at end-2007.

Projects in the Central African Republic, Gabon, Mongolia, Australia, Quebec and Jordan should ensure the group's production beyond 2020, Montessus said.

"We're trying to have a diversified production portfolio. Geographically, we can't put all our eggs in the same basket ... The UraMin acquisition was a way of diversifying in Africa, of not being in just one country so that whatever the geopolitical or natural events, we guarantee supply," he said.

Before the UraMin deal, Areva was mainly present in Niger, where its relations were strained last year after the government accused the French company of supporting insurgents. Areva, which has denied the charge, finally renewed a uranium deal with Niger in January, agreeing to a 50-percent price increase.

Asked about the state of relations between Niger and Areva, Montessus said: "I think they are good."

Commenting on the recent kidnapping of four Areva workers by a Tuareg-led rebel group last month, Montessus said this was one of biggest risks in developing its projects in Niger. The workers were freed after three days. (Editing by Erica Billingham)