Areva Offers India Stakes in African Mines, Jain Says (Update1) - Bloomberg.com
Areva Offers India Stakes in African Mines, Jain Says
By Archana Chaudhary
June 5 (Bloomberg) -- Areva SA, the world’s biggest maker of atomic reactors, has offered India stakes in African uranium mines to ensure supplies for fuel-starved plants, the head of the nation’s monopoly nuclear generator said.
State-run Nuclear Power Corp. of India is considering investing in as many as four mines, including projects in South Africa and Nigeria, Chairman Shreyans Kumar Jain said in an interview in Mumbai. Patricia Marie, a spokeswoman for Areva in Paris, confirmed “strategic talks” with partners to develop some mines and declined to comment on specific proposals.
India would gain resources for its atomic expansion after Australia, with the world’s largest known uranium reserves, refused to sell to countries that haven’t signed the Nuclear Non-Proliferation Treaty. Areva is building the first large- capacity reactor project in the South Asian nation, which plans a 14-fold increase in nuclear generation by 2030.
“India and China buying stakes in uranium mines will boost production, not prices,” said Max Layton, London-based analyst at Macquarie Bank Ltd. “We predict an annual deficit of as much as 2,000 tons in uranium till 2011-12. We expect it to take until 2013-14 before more mines come into production.”
Nuclear Power is also seeking long-term supply contracts from Kazakhstan, Canada and Brazil as it orders reactors worth at least $14 billion from overseas, Jain said. A three-decade global ban on atomic supplies to India was lifted last year.
“We may invest up to 26 percent of the project cost,” Jain said, declining to give more details about the Areva mines or how much the company would spend on the proposed acquisitions.
Insufficient Reserves
Buying shares in Areva’s mines will help boost supplies for locally built atomic plants as domestic reserves of uranium are insufficient for India’s requirements, Jain said yesterday. Nuclear Power may spend more than a planned $1.2 billion to buy equity in overseas uranium mines, including those in Russia and Kazakhstan, he said.
Areva, which is building the first large-capacity atomic project in India with overseas equipment, will also supply uranium to run the reactors for 60 years, Chief Executive Officer Anne Lauvergeon said in February after signing a preliminary sales agreement.
Nuclear Power will buy two Areva reactors of 1,650-megawatt capacity each and may increase the number to six, according to the preliminary agreement.
The project will be built at Jaitapur in the western state of Maharashtra and Nuclear Power may complete acquiring almost 1,000 hectares (2,470 acres) of land for it in the “next few months,” Jain said.
Awaiting Approvals
The two companies are waiting for France’s parliament to approve an inter-governmental agreement before raising 3 billion euros ($4.25 billion) for the project, he said.
A final accord may be signed next year after obtaining French parliamentary and regulatory approvals, Jain said.
Nuclear Power’s agreements to buy reactors from U.S.-based GE Hitachi Nuclear Energy and Russia’s Rosatom Corp. also include assured uranium supplies, Jain said.
The Indian company may need 750 metric tons of the fuel each year after signing agreements to add 25,000 megawatts of capacity, Jain said in an interview in March.
Nuclear Power is bidding for stakes in uranium mines in Russia and Kazakhstan, including the untapped Elkon deposit in Russia’s Far East, Jain had said in a May 26 interview in Moscow.
India’s current nuclear power generation capacity of 4,120 megawatts accounts for 3 percent of the total, according to the power ministry’s Web site. India may produce 60,000 megawatts of nuclear energy by 2030, Shyam Saran, special envoy to the prime minister, said Jan. 8.
-- With assistance from Anne-Sylvaine Chassany in Paris. Editors: John Chacko, Ang Bee Lin.