South Korea, Areva partner to secure uranium supply

SEOUL, SOUTH KOREA - Nuclear power company Areva SA has signed an agreement with South Korean utility company Korea Electric Power Corporation (KEPCO) under which the two companies will develop and operate Niger's Imouraren uranium mine, which is the second-largest uranium mine in the world.

Imouraren SA, the company that will be operating the mine, is jointly owned by Areva and the state of Niger. Areva currently holds a 67% stake in the mine. As a result of the new agreement, KEPCO will now indirectly hold a stake of 10% in the company.

KEPCO's board of directors has approved an investment of more than $253 million in the project.

Under the terms of the agreement, KEPCO will take 10% of the mined uranium for utilization in South Korea's nuclear power plants. The agreement will hold for the duration of the mine's operations, which is expected to last for more than three decades.

The Imouraren deposit is located in northern Niger and is counted as one of the world's most prominent uranium deposits. The mine will be operational from 2013 and is expected to have an initial capacity of 5,000 tons per year. KEPCO will secure about 700 tons per year of uranium.

The Areva-KEPCO partnership displays KEPCO's aim to secure a long-term supply of uranium for its power plants and demonstrates Areva's policy of strengthening long-term business relationships with major clients.

In June 2009, KEPCO acquired a 2.5% stake in the Georges Besse II enrichment plant being set up on the Tricastin nuclear site in southern France. KEPCO made the investment through its subsidiary Korea Hydro & Nuclear Power Company Limited (KHNP). Construction of the $4.3 billion Georges Besse II project began three years ago and is designed to include two enrichment units. The investment is one of the largest in France's industrial sector in the past 10 years. In 2016, the plant is expected to reach full capacity and produce 7.5 million separative work units per year. The facility at Tricastin is operated by Eurodif SA, a subsidiary of Areva.

KEPCO, through KHNP, currently operates 20 nuclear power reactors in South Korea. The plants require a total of about 3,100 tons per year of uranium. Nuclear power currently accounts for 40% of South Korea's domestic power supply. With the addition of the power derived from the six large reactors being constructed, nuclear power will account for 55% of the country's domestic power supply by 2022. Another four plants are presently in the planning stage.

South Korea's total power generation capacity at the end of 2008 was 72,500 megawatts (MW). This figure is expected to reach 88,000 MW by 2017 and 100,900 MW by 2022. Nuclear power contributed 17,716 MW in 2008 and by 2022, nuclear power generation capacity is expected to reach 32,900 MW. According to KHNP's plans, the company expects to spend $3.68 million on nuclear power plants before the end of this year. It plans to invest between $32 billion and $40 billion on 18 nuclear power plants by 2030.


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