LES to double size of National Enrichment Facility

Urenco is seeking 50% U.S. market share

Louisiana Energy Services (LES) surprised just about everyone with an announcement Friday Nov 21 that it plans to double to the size of the National Enrichment Facility now under construction in Eunice, NM, which is in the far southeast corner of the state.

LES said it will pursue expansion of the National Enrichment Facility from its current planned size of 3 million separative work units (SWU) to 5.9 million SWU. As currently configured, the National Enrichment Facility will provide the equivalent of 25% of the total US nuclear reactor fuel demand. By doubling its capacity, the facility could reach as much as 50% of the U.S. market for enriched uranium for civilian nuclear power plants by 2015.

LES President and CEO Reinhard Hinterreither said in a press release . . .

"LES began examining the business case to pursue an expansion of its plant in Lea County several months ago. That business case depends on several factors: commitments from utility customers, availability of investment capital, long term stability of the US enrichment market, community support, and rests on the approval of state and federal regulatory agencies and the Urenco Board."

Expansion requires a new round of permits

Local media coverage in New Mexico indicates that construction expenditures to date total $471 million with another $100 million to be spent by the end of December.

Expansion of the facility will require an application to the NRC for a change to its license and a new round of public hearings. NRC spokesman Scott Burnell told the Hobbs, NM, Daily Sun the agency has not yet received the application though they are expecting it.

New Mexico Environmental Department Secretary Ron Curry told the newspaper the expansion will require the plant to update its water quality permit. Environmental groups in New Mexico are challenging the current permit in court after exhausting administrative appeals. It is likely they will continue their protests with the new one once it is filed with state regulators.

LES move changes the competitive landscape

The expansion of the plant comes at a time when three other uranium enrichment plants are being planned to serve North American nuclear energy markets. These plants include USEC in Ohio, Areva in Idaho, and General Electric in North Carolina.

Unlike USEC and Areva, LES did not apply for federal loan guarantees to boost its ability to attract capital. Urenco is reportedly funding much of the construction with its own funds. Areva is an investor in Europe in Urenco.

The move may be seen as a pre-emptive action to force one or more of the other planned projects to be put on the shelf due to the difficulty of getting financing in the current economic downturn.

USEC has been having trouble raising capital, but announced earlier this month it would proceed with the first $1 billion in capital spending to build the $3.5 billion plant in southern Ohio.

However, Areva is a state-owned corporation funded by the French goverment and is likely to proceed with its $2.4 billion Eagle Rock uranium enrichment plant in Idaho regardless of the condition of capital markets.

General Electric is further behind the other three firms with near-term plans to build a test loop for its new laser enrichment process in Wilmington, NC. The firm claims it will build a full-scale plant and have it operational by 2012.

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