Areva Selects Idaho for $2 Billion Grassroot Uranium-Enrichment Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Areva Incorporated (Paris) has selected Idaho for its first U.S. uranium-enrichment facility. The site will be located about 18 miles west of Idaho Falls in Bonneville County, near the U.S. Department of Energy's Idaho National Laboratory. Idaho National Laboratory has been conducting research in nuclear energy for more than 50 years. Idaho was chosen from a short list of five states: Texas, New Mexico, Ohio and Washington.

Areva's new uranium enrichment plant will cost about $2 billion, and construction should begin in 2011. The plant could start producing enriched uranium by 2014, with full capacity being reached by 2019. The plant will use advanced centrifuge technology with a capacity of 3 million separative work units (SWU) per year. The enriched uranium will be used as fuel for nuclear power plants. Areva will begin the process of obtaining approvals from all the local, state and national agencies, including the Nuclear Regulatory Commission, which are required before construction can begin.

There are only two other uranium enrichment plants being built in the United States: one in Piketon, Ohio, and the other in Eunice, New Mexico. USEC Incorporated's (NYSE:USU) (Bethesda, Maryland) American Centrifuge Plant in Piketon is expected to come online in spring 2009 and at full capacity, it will produce 3.5 million separate work units per year. Fluor Corporation (NYSE:FLR) (Irving, Texas) is the engineering, procurement and construction (EPC) contractor for the project. The cost has escalated to $3.5 billion, more than double the original estimate. The uranium-enriching facility in Eunice is being constructed by Urenco (Marlowe, UK) and its U.S. subsidiary, Louisiana Energy Services (LES). The Washington Group International (Boise, Idaho) is the EPC contractor for this $1.4 billion facility, which at full capacity will produce 3 million SWU per year and is expected to be online in the second half of 2009.

There are 104 nuclear reactors operating in the United States that use 12.7 million SWU per year, and only one uranium-enrichment plant, USEC's facility in Paducah, Kentucky. This 56-year-old plant produces 8 million separate work units per year using gaseous diffusion technology, which requires 50 times more energy than centrifuge technology. Close to half of the enriched uranium used in domestic nuclear power plants comes from Russia. This supply is expected to be cut almost in half by 2013. These new uranium enrichment plants, and one that is under development by GE-Hitachi, a joint venture of General Electric (NYSE:GE) (Fairfield, Connecticut) and Hitachi (NYSE:HIT) (Chiyoda, Tokyo), should be able to satisfy the domestic needs for enriched uranium in the coming years.

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