French multinational nuclear company AREVA on Wednesday announced the formation of a new subsidiary to manage its operations in the United States. The move is part of the troubled company’s broader restructuring, in which it is focusing on nuclear fuel cycle work and selling off its reactor business.
Sam Shakir, an executive with AREVA for five years who already leads the company’s U.S. business, will be the CEO of AREVA Nuclear Materials. The subsidiary is housed under what the company calls New AREVA, which in October separated from the AREVA NP segment that will ultimately be sold to French power utility Eléctricité de France SA for over 2.5 billion euros.
AREVA Nuclear Materials will encompass five business segments: AREVA D&D, based in Washington, D.C., will provide decommissioning and dismantlement services for U.S. nuclear plants; TN Americas (previously AREVA TN), based in Maryland, provides used nuclear fuel and radioactive waste storage, transportation, and field services; AREVA Federal Services, based in North Carolina, is a federal contractor for nuclear fuel cycle and environmental management services; Mining, Conversion, Enrichment Sales, based in Virginia, provides nuclear fuel to domestic utilities; and AREVA Med, based in Texas, is developing radioisotopes for cancer treatments.
Those U.S. business lines have about 560 employees and produced in excess of $900 million in sales last year, the company said. While AREVA has not yet released its full 2016 financial numbers, the company as a whole earned just under $3 billion in revenue through the first nine months of the year, according to its third-quarter earnings release.
“It’s always been the case, previously and today … that this is a very important market,” Shakir said in a telephone interview Wednesday. “From commercial nuclear operations, [the United States has] the largest fleet in the world, the federal government has a lot of activities in the nuclear energy sector that we are very well positioned to serve.”
Given that standing, Shakir said, AREVA decided it needed a U.S.-only organization, with “local talent,” to further strengthen its place in the market. He said the company anticipates a large number of upcoming opportunities in nuclear plant decommissioning and other markets, but declined to discuss specifics.
AREVA is already committed to a broad swath of projects around the country, from dismantlement of the reactor vessel at the shuttered Vermont Yankee nuclear plant, to sales of the NUHOMS used fuel storage system, to the partnership with CB&I in building the Department of Energy facility intended to convert 34 metric tons of surplus nuclear weapon-usable plutonium into commercial reactor fuel. “What you see here is mostly the back-end work” for the nuclear industry, AREVA spokesman Curtis Roberts said.
Shakir expressed optimism that the Mixed Oxide Fuel Fabrication Plant at the Savannah River Site in South Carolina will advance, despite the Obama administration’s attempt to defund the project in its fiscal 2017 budget proposal. The Energy Department says it has an alternative method that would save tens of billions of dollars and years of work, but its case has largely fallen on deaf ears on Capitol Hill. The National Defense Authorization Act signed by President Barack Obama in December expressly allowed for $340 million for continuing construction; actual funding is set at fiscal 2016 levels under a continuing budget resolution through April 28, by which time Donald Trump will have taken office. MOX supporters hope he will look more kindly on the project than his predecessor.
“We remain very optimistic that the project will continue. Of course, the DOE’s concerns are well known and very much understood by us,” Shakir said. “Congress has passed language now that continues construction with the same budget that we had last year. That’s obviously good for the project, and we will work with the DOE and NNSA … to find a path forward that could optimize the project and deliver the value that it’s intended to have.”
AREVA’s announcement Wednesday capped a busy half-week for the company. One day earlier, the European Commission announced it had approved a capital financing program intended to enable the corporate restructuring.
The French state, which owns 86.5 percent of AREVA Inc., intends to provide the company with 4.5 billion euros ($4.8 billion) in capital. AREVA has also received offers from strategic investors to supply another 500 million euros ($529 million), according to a company press release.
The company agreed in November to sell its nuclear reactor business to EDF. It will use the 5 billion euros in outside capital to focus its remaining business on nuclear fuel cycle operations.
The European Commission, the executive body for the 28-nation European Union, found that the French capital supply to AREVA conforms to EU rules for state aid and would strengthen the company “without unduly distorting competition in the Single Market,” according to the EU statement.
AREVA hopes the restructuring will end years of losses that have devastated its equity, Reuters reported Tuesday.
Payment of the French capital to AREVA is subject to two conditions: the European Commission’s approval of the sale of the reactor business to EDF and a “positive conclusion” to French Nuclear Safety Agency testing of the nuclear reactor vessel for the years-overdue Unit 3 of the Flamanville Nuclear Power Plant. Until those two conditions are met, the European Commission on Tuesday also signed off on a 3.3 billion loan from the French government to AREVA, which is intended to ensure the company has sufficient liquidity until the capital injection is made.
Meanwhile, the U.S. Nuclear Regulatory Commission on Tuesday released a list of components supplied to 17 nuclear reactors at 13 sites in the United States that originated at an AREVA production plant now being investigated by the French Nuclear Safety Agency. The Creusot Forge is suspected of falsifying papers regarding the quality of the components it manufactures, Reuters reported.
The sites in question are the Beaver Valley Nuclear Power Station in Pennsylvania, Comanche Peak Nuclear Power Plant in Texas, V.C. Summer Nuclear Station in South Carolina, the South Texas Project Electric Generating Station, the Sequoyah Nuclear Plant in Tennessee, Arkansas Nuclear One, the North Anna Power Station in Virginia, the Surry Power Station in Virginia, the Millstone Nuclear Power Station in Connecticut, the Joseph M. Farley Nuclear Plant in Alabama, and the St. Lucie Nuclear Plant in Florida.
“We are confident at this time that there are no safety concerns for U.S. nuclear power plants raised by the investigations in France,” NRC spokesman David McIntyre said in a blog post. “Our confidence is based on the U.S. material qualification process, preliminary structural evaluations of reactor components under scrutiny in France, U.S. material aging-management programs, our participation in a multinational inspection of Creusot Forge, and information supplied by AREVA about the documentation anomalies. Also, the components supplied to U.S. plants have performed well and inspections during their operating life have revealed no safety issues.”
