Another Self-inflicted Calamity in View
As predicted in our posts of 9th April 2011 and 3rd March 2012, the news that the British government is seeking to sell the UK’s one-third stake in the international company URENCO, has prompted the French government to seek to buy it through the Areva nuclear reactor design company in which it has over 90% of the shares.
URENCO makes enriched uranium for nuclear reactors by the gas-centrifuge process. This is the only such facility in Western Europe and is one which the French State, which operates the obsolete energy intensive gas diffusion process, has long wanted to acquire.
Gas centrifuge technology is the technology of choice whether for civil or military uses. For this reason Iran has been constructing plant based on this enrichment technology in various bomb-proof/underground locations. The whole technology is about as strategic to civil electricity generation and military weapons production as you can get, comparable with the latest stealth aircraft design or military radars.
URENCO’s main installations are in Britain at Capenhurst in Cheshire; in Germany at Gronau, Westphalia; at Almelo in the Netherlands and Eunice in New Mexico, USA.
URENCO’s operations are subject to the 1971 Treaty of Almelo, the 1993 Treaty of Washington, and the 1998 Treaty of Cardiff which made possible a technology agreement with the French. URENCO has about 30% of the expanding uranium enrichment market, an order book of £16 billion and pre-tax profits of £392 in the 6 months to the end of June 2012.
Areva[1], by contrast, made a loss of €2 billion on revenue of €8.9 billion in 2011, has a net debt of €3.7 billion, is 100% over budget on its shop window EPR nuclear power station in Finland. But for subsidies from the French State it would be in administration. After a series of disastrous mining ventures and the mismanagement of nuclear projects in Finland, La Hague, Tricastin, Bakouma in the former French colony, the Central African Republic, Namibia, South Africa and Eagle Rock Enrichment Facility in Bonneville Idaho near the US National Nuclear Laboratory, its CEO, Anne Lauvergeon, has now departed (31st December 2012) for less testing times on the EADS board as non-executive representative of the French government[2].
Subject to Dutch government approval, which this writer devoutly hopes will not be forthcoming, the British government aims to sell its share of URENCO for about £3 billion, possibly to Areva, possibly to Toshiba, as part of its £16 billion programme of asset sales started under the former Labour Chancellor. Among other things, this asset sale has seen British Nuclear Fuels’ Westinghouse nuclear plant design company sold to Toshiba of Japan for £2.9 billion in 2007. So if the British government’s plans go ahead, the remainder of Britain’s nuclear design and fuel making capacity will pass into foreign hands for £3 billion[3], approximately one month’s interest on Britain’s national debt.
What should be done?
Anyone with a shred of interest in Britain’s future as a serious industrial country should harry the government by means of emails to their local MPs. To save a miniscule bit of face over their debt reduction programme, this wretched government is prepared to sell any asset they can, call it “inward investment” and sacrifice the UK’s future as an industrial exporting nation. Before anyone tells you that ownership doesn’t matter, consider that EDF (French State) has chosen Areva (French State) to build nuclear reactors in Britain at a cost of £4.3 million per MegaWatt (MW) to be paid for by the British consumer, compared with around £2.6 million per MW for the rival Westinghouse AP1000 (Japanese owned, but British designed, a derivative in fact of the Pressurised Water Reactor (PWR) operating at Sizewell in Suffolk). Ownership is all-important where long-term investment is concerned.
[1] Areva is the company selected by Electricité de France (EDF) to design and build 6.4 GW of nuclear reactor capacity at Hinckley Point and Sizewell.
[2] EADS is the Franco-German company that wanted to take over the main British defence company BAe Systems.
[3] Along with the design company, Westinghouse who own the Springbuilds factory near Preston, Lancashire, which makes actual fuel rods for nuclear reactors.
