Sunday, March 8, 2009

USEC still in the hunt for funding

It plans construction of a $3.5 billion uranium enrichment plant in Ohio

ACP logoUSEC (NYSE:USU) told the Associated Press last month that it is still in the hunt for investors for its $3.5 billion American Centrifuge Plant (ACP) to be built in Piketon, OH, about 90 miles east of Cincinnati.

"The market for our enrichment product remains strong with improving prices, and we like the prospect for growth in our industry," CEO John Welch said.

However, in a prepared statement about progress at Piketon, Welch said the future of the ACP project may depend on whether USEC gets a $2 billion Department of Energy-guaranteed loan guarantee for the plant.

"We do not believe public market financing for a large capital project such as the ACP is available to us, given current financial market conditions," Welch said. "We view the DOE loan guarantee program as the path for obtaining the debt financing to complete the American Centrifuge project."

The NRC issued the Construction and Operating License for the American Centrifuge Plant in April 2007. The license is valid for 30 years.

USEC began construction on the American Centrifuge Plant in May 2007. USEC said in a statement on its web site that it plans to provide about 3.8 million SWU of production by 2012.

In September 2009, USEC awarded a $1 billion contract to Fluor Corp. of Irving, Texas, for engineering, procurement and construction.  However, it is unclear how much progress has been made with the construction phase.

USEC is competing with Areva for the loan guarantee. Areva also applied for a loan guarantee for its planned $2 billion plant, the Eagle Rock facility, to be built 18 miles west of Idaho Falls, ID. It has applied for an NRC license. Areva plans to break ground in 2011.

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