Russia's Atomenergoprom and Japan's Toshiba to Develop Uranium-Enrichment Plants in Asia

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Researched by Industrial Info Resources (Sugar Land, Texas)--Russia's state-owned Atomenergoprom (Moscow), which controls the Russian civilian nuclear energy industry, has signed an agreement with Toshiba Corporation (TYO:6502) (Tokyo, Japan) to investigate the development of uranium-enrichment plants in Japan and Asia. This agreement follows the cooperation agreement signed by the two organizations last year for joint investigations into civil nuclear energy projects.

Toshiba already supplies the majority of the boiling water reactors in Japan and is the owner of Westinghouse Electric Company LLC (Monroeville, Pennsylvania), which it acquired in 2006 for $5.4 billion. Through this acquisition, Toshiba gained access to extensive technology in water reactor nuclear plants, both boiling water reactors and pressurized water reactors. Since becoming a part of Toshiba, Westinghouse has obtained orders worth billions of dollars for development of nuclear power plants in China.

In 2007, Toshiba acquired a 22.5% stake in a consortium formed by Marubeni Corporation (TYO:8002) (Tokyo) to develop uranium mines in Kazakhstan. Under the deal, Toshiba has the rights to mine 600 tons of uranium per year. Currently, Japan imports uranium primarily from Canada and Australia. Kazakhstan accounts for only 2.5% of Japan's uranium imports, but this is expected to rise to as much as 20-30% by 2015.

Kazakhstan has estimated reserves of 1.5 billion tons of uranium, accounting for about 19% of known world reserves. In an attempt to solidify relations with Kazakhstan, Toshiba sold 10% of its holding in Westinghouse to Kazatomprom (Almaty, Kazakhstan), Kazakhstan's state owned nuclear entity, for $540 million in October 2007.

Last year, Toshiba was reportedly looking at purchasing a stake in Nuclear Fuel Industries Limited (Tokyo), Japan's largest manufacturer of nuclear fuel, which was set up in July 1972 as a joint venture between Furukawa Electric Company Limited (TYO:5801) (Tokyo) and Sumitomo Electric Industries Limited (TYO:5802) (Osaka, Japan). The deal, if successful, would give Toshiba a presence in all aspects of the nuclear cycle, covering uranium mining, fuel production and power plant construction. The new deal with Atomenergoprom will enhance Toshiba's position in Japan and Asia.

Russia has long been keen to break into the global non-military nuclear energy market and has recently been active in forming associations with international partners in the nuclear industry. Earlier this month, the Russian state nuclear corporation Rosatom (Moscow) and Germany's Siemens AG (NYSE:SI) (Munich, Germany) signed a memorandum of understanding outlining the creation of a combined venture in the nuclear energy sector. Atomenergoprom's recent deal with Toshiba will greatly assist Russia in competing in the global nuclear marketplace.

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