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An energy world in revolution: how to secure the nuclear fuel supply?
Luminita GRANCEA AREVA - International & Marketing DepartmentFront-End Marketing
luminita.grancea@areva.com
Nuclear Fuel Cycle Information System NFCIS’ Technical Meeting
IAEA Vienna - December, 2010
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.2
Sharply rising energy demand worldwide
Limited fossil resources
Consensus on climate change and on the need for greenhouse gas reduction
Legitimate aspirations towards development by peopl e in many emerging countries
An energy worldin revolution
Today, the world needstwice as much energyand half as much CO 2
Nuclear:contributing to a reliable, economical, carbon-free energy
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.3
Story line
A new era of the Nuclear Power is already taking sh ape, especially in Asia… rapid reactor build-up and the consequent large growth in U demand is one of the key points in the nuclear fuel industry today.
Major implications� Need for a LT supply of the fuel requirements starting with Uranium
� Need for reliable fuel cycle facilities to accompany the new Nuclear Power Plants during their lifetime
� Well mastered safeguards
Mean huge Capex in a tough financial environment
Current Front-End market conditions are far away fr om reflecting the nuclear renaissance…But prepare the LT is the right way to do…as long w ay from projects to production!
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.4
The nuclear revival is a fact
The nuclear renaissance is already taking off and i t is driving uranium and fuel cycle services requirements.
Global Nuclear Power Reactor New Builds
Source: WNA, 2010
40
60
80
100
120
140
160
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Upper case Base case
+ 61 %
+ 113 %
Uranium requirements (in ktU), WNA 2009 report
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.5
Content
Market outlook
Uranium mining
Uranium Enrichment
UF6 Conversion
Fuel fabrication
A long standing effort to secure nuclear fuel supplie s:
While constantly improving operational, safety and environmental performance
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.6
Being prepared in Uranium mining:a long standing effort…
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.7
Growth in primary uranium production needed
Source: WNA, Ux Consulting
Primary Uranium production vs reactor requirements
Production ramp up and required projects developments a re significant
�Uranium requirements are growing as new reactors are b uilt and planned
�Secondary supplies will significantly decrease after 201 3
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.8
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
55 000
60 000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Total
Other
USA
Uzbekistan
Niger
Russia
Namibia
Australia
Canada
Kazakhstan
Need for increasing U production and resources over the long term…
But where are we today ?
tU
Uranium production (tU) the last decade
Source: WNA, 2009
�After years of flat output, 2009 mine supply strong inc rease relies almost exclusivelyon Kazakhstan…
�Exploration takes up to 15 years and M$ and global spend is highly correlated to Uranium spot price
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.9
Do we have enough uranium resources? Next generation Uranium at what cost ?
2 970
796
4 456
5 469
3 742
5 4046 306
0
1 000
2 000
3 000
4 000
5 000
6 000
2007 2009
<$40/ kgU
<$80/ kgU
<$130/ kgU
<$260/ kgU
�The overall amount of identified resources (IR) inc rease by ~15% between 2007 and 2009
�However, the resources below $40/kgU represent only 12.6% of the total resources in 2009 vs 54% in 2007
�There is still some adjustments that need to be mad e to reflect the real costs
-73 %
-16 %
Red Book: IR are enough (over 100 years) but the amo unt of ressources < $40/lb significantly reduced
Identified uranium resources (in ktU), 2007 vs 2009 - IAEA Red Book
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.10
Uranium production planned figures & the reality…
New uranium projects face many challenges in cominginto production…
• Projects delayed / postponed• Longer ramp ups than expected• Downsides at existing mines
• Licensing issues• Financing issues• Technical issues• Political issues
Various issues…
…Various consequences
WNA forecasts and the real production
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.11
Areva’s Mining portfolioand how do we secure the future supply
MONGOLIA
Sainshand
CANADAMc ArthurMc CleanCigar Lake, Midwest, Kiggavik, Shea Creek
NIGER
SomaïrCominakImouraren
USA
FRANCE
SENEGAL
CENTRAL AFRICAN REPUBLIC
Bakouma
NAMIBIA
TrekkopjeSOUTH AFRICA
Ryst Kuil
GABON
JORDAN
KAZAKHSTAN
Katco
AUSTRALIAActive mines
Mining projects
Exploration
Offices
Reclaimed minesA worldwide diversified uranium producer
AREVA: 8626 tUproduced in 2009, 17% of world production
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.12
Our strategy:manage a portfolio of projects to anticipate the
renewal of resources
�
Canada
Development (Shea Creek, Kiggavik etc.)
Exploration since 1964
Cigar Lake production to start in 2013 (+2,600 tU)
Morocco
Agreement signed with Office Chérifiendes Phosphates
AREVA Resources Southern Africa
Namibia - Trekkopje: mining permit obtained / desalination plant tests /
+3,000 tU production expected
Central African Republic -Bakouma: government agreement obtained
+2,000 tU production expected
South Africa – Ryst Kuil
Exploration
Kazakhstan
Mining & global fuel agreement signed
Katco production ramp-up / license for 4,000 tU obtained
- Largest number one ISL production in the world > at 3,000 t U
Mongolia
Sainshand
Exploration
Somaïr & Cominak mines
Somaïr: starting heap leaching
Imouraren mining license obtained
- Start up 2013-14 (+ 5,000 tU)
Niger
Democratic Republic of Congo
Mining partnership
Australia
Exploration since 1969
Production(metric tons of U)
~ 8,600
10,000 12,000
2009 2012
With important resourcesallocated: budget and staff
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.13
Current Key Mining Projects
Note: (1) Production and Capex figures are 100% basis
TrekkopjeTrekkopje
Mine operator: AREVAShareholder: AREVA (100%)
Resources: 42,324 MTU
Planned production (1): 3,000 tU / yr
Investment (1): > €700M
July 2007: UraMin acquisition April 2008: Feasibility study completeEnd of 2008: Start of construction
2012: Start of production
ImourarenImouraren
April 2006: Project launchedMay 2008: Feasibility study completed2010: Start of construction
2014: Start of production
Mine operator: AREVA
Shareholders : AREVA (57%) , State of Niger (33%),
KEPCO (10%)Resources: 192 000 tU
Planned production (1): 5,000 tU / yr
Investment (1): > €1Bn
KatcoKatco
April 2004: Start of commercial productionafter 3 years of pilot operations2009: Production of 3,100 tU2012: Production capacity of 4,000 tU
Mine operator: KATCO
Shareholders: AREVA (51%) , Kazatomprom (49%)Resources: 54,400 tU
Planned production (1): 4,000 tU / yr
Investment (1): > €400M
Cigar LakeCigar Lake
Mine operator: Cameco
Shareholders: Cameco (50%), AREVA (37%) , third parties
Resources: 135,000 tUPlanned production (1): 7,000 tU / yr
Investment (1):: > €1 Bn€
2010: Dewatering completed2013: Start of production
AREVA is starting now to prepare the future (meaning costs and risks…)
Large mining project Capex are in the range of 0.5 t o >1 billion euros
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.14
Best things come to an end…Environmental management and remediation
�Cluff Lake (Canada) site before remediation
�Cluff Lake site after remediation
9 sites closed in 15 years on 3 continentsTotal investments: > 300 M€
Beyond production, acting as a environmentally responsible actor is key to long term security of supply
Environmental management is an integrated approach throughout the mine lifecycle
AREVA has good records in environmental issues
� ISO 14001 certification or Environmental Management System
� Precautionary & preventive measures at every step of operation so as to prevent risk and mitigate impact on environment
Remediation and supervising of sites at their end of life is critical
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.15
Being prepared in UF6 Conversion:
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.1616
Additional new capacities needed
Secondary resources
Existing capacity replacements
Existing capacities, to be upgraded or replaced
Potential new capacities
Tons of Uranium in UF 6 Need of ~40-45 ktU
in UF6
Market Outlook:Increasing demand for conversion and related supply risk
Equivalent reactor needs (WNA reference scenario, 2009)
�Future reactor needs require replacement of existin g capacity and the adding of new capacity across the fuel cycle...far from met.
�Even with possible new secondary supplies, there is a cl ear need for more primaryconversion supply post-2013.
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.17
Conversion Market Driven only by a few main players
Capacity: 14,000 tU / year
Adaptable to a wide range of uranium concentrates
Metropolis Works Plant
Capacity: 13,000 tU / year
Port Hope & Blind River
Capacity: 10,000 tU / year
Canada: CAMECO
France: AREVA
COMURHEX Malvesi & Pierrelatte
USA: ConverDyn
Springfields
5,000 tU / year
UK: NDA
3,000 tU / year
National requirements
China: CNNC
Angarsk (AECC) & Seversk (SCC)
Capacity: 15,000 tU / year
Russia: AtomEnergoProm
Source: Trade Press and AREVA estimates
Almost all western conversion plants have to be rep laced over the next 10-15 years.
Four companies account for 90% of nominal capacity and production.
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.18
COMURHEX II AREVA is renewing and extending its capacities
Pierrelatte
Investment: > € 600M
Extendable Capacity: 15,000 tU per year,
extensible to 21,000 tU only with market support
Start of Construction: 2009
Start of Production: 2012
Nominal Capacity: 2015
COMURHEX II
Malvési
All conversion facilities worldwide are old and pro duction disruptions already happened.
AREVA is the first to invest in a brand new convers ion facility.
COMURHEX II: technological innovations to respect stringent environmental and safety standards.
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.19
Comurhex II ProjectKey Project Milestones
2004 - 2007: Feasibility studies, including choice of processes and Design
February 2007: Project officially approved by AREVA Executive Comm ittee
2007 – 2008: Setting up the project platforms
2009: Public information process – public inquiries. Start of civil engineering work
2010- 2012- 2013: Construction of new units and testing
2013- 2014: Gradual startup of units
2015: Full production capacity (15,000 metric tons)
Pierrelatte PlantMalvési Plant
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.20
Being prepared in uranium Enrichment:
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.21
SWU market perspective in line with nuclear renaissance
� Enrichment needs: 48 MSWU in 2009 to 66 in 2020 and probably 80 in 2030 (WNA, 2009, reference scenario)
> Supply (SWU) compared with the three demand scenarios
Source: WNA, 2009
(000’s SWU)
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.22
Four enrichers provides for 95% of the world enrichment capacities
USEC
ROSATOMcentrifugation
CNEICcentrifugation
JNFLcentrifugation
URENCOcentrifugation
AREVAdiff. gazeuse
12.7*
26*
1.5*
8.0* < 1*
10.8*
*estimated capacity, 2010 (MSWU)
gaseous diffusion
gaseous diffusion
A large part of current capacities to be replaced b efore 2015: current gaseous diffusion plants, also ancient Russian centrifuges
New projects: LES (Urenco), GBII (AREVA), USEC, ERE F (AREVA), GLE (pilot phase)
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.23
GEORGES BESSE II AREVA is renewing and extending its capacities
Pierrelatte
Investment: € 3B
Capacity: 7.5 million SWU/y expandable to 11 MSWU
UF6 introduction in the plant: December 2010
Nominal capacity reached by 2016
GEORGES BESSE II
A fruitful partnership through the entrance of diff erent utilities
� 5%
� 2.5%
� 2.5%
� 1% Tohoku & 1% Kyushu
Long term security of supply implies access to the right technology (50 times less power/SWU) at the right place (skills, acceptance…)
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.2424
Georges Besse IIKey Project Milestones
• September 2006: Start of civil engineering works
• February 2008: CAB* hand over to ETC**
• March 2008 : Delivery of the first Cascade hall
• March 2009: Installation of the centrifuges in the first Cascade Hall
• November 2009: First cascade rotation at nominal speed
• August 2010 : Control room hand over
UF6 annexes Control Room
• March 2009: Start of civil engineering works
• September 2010: CAB* hand over to ETC
• 2016: Full production (3.2 MSWU)
* CAB = Centrifuge Assembly Building
December 2010: UF6 introduction in the plant (South Unit) & Grand Opening
2016: Full production South & North Unit (7.5 MSWU)
South Unit
**ETC=Enrichment Technology Company
North Unit
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.25
Eagle Rock: An Enrichment Facility for the US market
Idaho FallsInvestment: 2.5 Billion $
Capacity: 3.3 million SWU/y expandable to 6.6 MSWU
Expected to start production in 2014
Eagle Rock
A proven and reliable centrifuge technology, already licensed by the NRC (same centrifuge technology as GBII in France).
$2 billion loan guarantee received from DOE. Evaluation criteria: reliability of the proposed technology, innovation and financial strength.
Construction will begin in 2011 subject to licensing and the necessary diplomatic agreements.
Centrifuge Assembly Building
Separation Building Modules UF6
Buildings
Blending, Sampling and Preparation
Building
Technical Support Building
Operation Support Building
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.26
Being prepared in fuel fabrication: investment & partnership
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.27
* licensing limitTotal 3,800 t
Richland
Lynchburg
Romans
Dessel
Lingen
Powder
1.800 t
1.200 t *
800 t *
700 t
820 t *
650 t *
700 t
700 t
FAs
Romans-sur-Isère
Fuel Manufacturing Plants
Richland
Lynchburg
Dessel
Lingen
Erlangen
Lyon
Paris
Design and Sales
Component Manufacturing Plants
Pierrelatte
KarlsteinRugles
Ugine
Jarrie
Zirconium Plants
Paimboeuf
Montreuil-Juigne
Duisburg
Paimboeuf
Duisburg 2 000 km
Clad
5.000 km
Total 7.000 km
(JV with MHI)
Tokai
Shimonoseki (JV with Zirco Products )
AREVA Fuel ActivitiesLargest plant capacity worldwide, ready and renewed for growth
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.28
Fuel ManufacturingOptimization of our fuel footprint
The largest fuel manufacturing capacity worldwide distributed across 15 sites requires consolidation� Consolidation of US fuel fabrication in Richland, WA
Over $130M to modernize the Romans Fuel Manufacturing plant (France)� Targeted licensed capacities:
1800 t of Powder, 1400 t of Fuel Assemblies
Over $130M to develop the Zirconium industrial tool , Joint venture with MHI (MNF), plus acquisition of 1/3 sta ke in Zirco Products (Japan)� Increased capacity ( ���� 7500 km), reliability and throughput
on main production facilities
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.29
Sustainable development…
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.30
Sustainable development: a core concern of our industrial strategy
We must be faultless when it
comes to safety, security and
ethics.
AREVA Way drives our
sustainable development
performance. Revolving
around 10 major
commitments, it is at once a
state of mind, a goal and a
way of acting specific to
AREVA.
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.31
Commitment to local communities and involvement in infrastructures development:
a key to sustainability
Schools
Training
Hospitals
Community relations
Desalination plant
Road project
Power line
Infrastructure development
NFCIS’ Technical Meeting: L. Grancea – IAEA, Vienna, December 2010 p.32
Conclusion…
AREVA believes in “Nuclear Renaissance” and is commi tted to secure the future in the fuel cycle. We are already build ing brand new facilities
� investments in new uranium mines
� a complete replacement of UF6 conversion plant
� two large centrifuge enrichment facilities and
� Investments & partnerships in fuel fabrication and in zirconium cladding production
We also integrate environmental , social and governance factors in our decision-making in order to guarantee the sustainability of our facilities and to guarantee the security of supply
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