an energy world in revolution: how to secure the nuclear ... · pdf filean energy world in...

An energy world in revolution: how to secure the nuclear fuel supply?

Luminita GRANCEA AREVA - International & Marketing DepartmentFront-End Marketing

[email protected]

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


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!


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


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


Being prepared in Uranium mining:a long standing effort…


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


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


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


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


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


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


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


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


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


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


Being prepared in UF6 Conversion:


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.


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


Port Hope & Blind River


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)


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.


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.


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


Being prepared in uranium Enrichment:


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)


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)


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…)


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


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


Being prepared in fuel fabrication: investment & partnership


* 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


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


Sustainable development…


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.


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


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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