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'Very long term' deals for Areva and CGNPC

Tuesday, 7 October 2008

Areva has announced two new agreements with China Guangdong Nuclear Power Company (CGNPC). The Chinese firm will gain supplies of uranium, and the two will start a nuclear engineering joint venture.

Areva has announced two new agreements with China Guangdong Nuclear Power Company (CGNPC). The Chinese firm will gain supplies of uranium, and the two will start a nuclear engineering joint venture.

Ling Ao (Image: Areva)

An Areva statement said the deals were signed off recently by Areva chair Anne Lauvergeon and Zhang Guobao, president of the National Energy Administration.

First, CGNPC "and Chinese sovereign wealth funds" will take a total of 49% of UraMin, a uranium mining firm purchased by Areva last year. The figure is up from the 35% agreed solely with CGNPC during a November 2007 round of deals. The agreement provides CGNPC with "guaranteed access to more than half" of UraMin's total uranium production - estimated at 18 million pounds of uranium oxide after 2012 from projects in South Africa, Namibia and Central African Republic.

CGNPC operates two reactors at Daya Bay and two more at Ling Ao. It is also a partner in new-build projects for a total of 12 more reactors at Ling Ao, Hongyanhe, Ningde, Yangjiang and Taishan. The units at Taishan are to be Areva EPRs, while the others are Chinese-design CPR-1000s based on earlier Areva models. Further plans see CGNPC involved in new CPR-1000 reactors at Fangcheng, Lianyungang, Xanning, Tianwei, and Wuhu. Beyond this are still more plans for new nuclear power units, though less well developed.

These new-build plans will be supported by the second Areva-CGNPC deal annoucned today, which concerns a joint venture to engineer and procure second and third generation nuclear power plants (CPR-1000s and EPRs respectively). This organisation will be "initially dedicated to CGNPC's projects in China," but will move on to support "joint projects abroad." It will be held 55% by Chinese interests, and 45% by Areva.

CGNPC chair Qian Zhimin said the company's uranium supplies would be secure until 2022, while Lauvergeon added that the duo's strategic partnership "now exists for the very long term."