France's Areva seals record 8 bln euro China deal

Written by:
Subscribe to Oneindia News

BEIJING, Nov 26 (Reuters) France's Areva clinched today the biggest commercial nuclear power contract on record, agreeing to sell China two reactors and to provide atomic fuel for nearly two decades in a deal worth far more than expected.

At 8 billion euro (11.86 billion dollars) the wide-ranging contract is worth far more than the figures first mooted 10 months ago, when Beijing signalled it would give the French state-owned firm a slice of its ambitious nuclear expansion plan.

Areva said its deal was ''unprecedented in the world nuclear market'' and marked the start of global cooperation with the China Guangdong Nuclear Power Corp (CGNPC), which will help build the plant in China's southern manufacturing hub.

''It reaffirms our global nuclear leadership and reinforces our presence in one of the most promising markets for the decades to come,'' said Areva Chief Executive Officer Anne Lauvergeon.

French utility EDF would finance 30 per cent of the deal in return for a stake in the plant, Lauvergeon said, and the package includes around 600 tonnes a year of fuel for the reactors from start-up in 2014 through 2026.

China has also secured uranium for several other plants, as it plans a near quadrupling of capacity through 2020, she told a news conference after the signing.

CGNPC has agreed to buy 35 per cent of the lifetime production of UraMin, an Areva unit focused on mining in Africa, which is expected to extract some 65,000 tonnes of the metal through 2022.

Beijing is growing increasingly anxious about securing the imported energy and commodity resources necessary to fuel its economic growth, and has tended to favour investors in these sectors who are able to guarantee supplies.

SURPRISE A year ago Areva appeared in danger of losing out on China's nuclear rush, when U.S.-based Westinghouse Electric, now owned by Japan's Toshiba Corp, won a two year battle for a contract to build four ''third generation'' reactors, which are promoted as safer and more efficient than current ones.

But Beijing later surprised both sides by expanding the original tender to six plants from four, giving the French company a fresh chance at pitching its new European pressurised reactors to China, where it has long had a presence.

In return for the flow of funds to France, the firm is transferring its technology -- a key demand Beijing also made of Westinghouse -- through a consortium they are setting up with their Chinese partner, Lauvergeon said.

The announcement was part of a raft of deals agreed during Nicolas Sarkozy's first visit to China as president of France, which included a framework pact to sell 160 Airbus planes, the planemaker's largest order to date.

Sarkozy has pressed Beijing to help curtail Iran's nuclear plans.

But a brace of deals announced during his visit showed France is eager to court China's own atomic power sector.

Areva and the China National Nuclear Corp agreed to study whether to build a spent nuclear fuel reprocessing-recycling plant in China that could be worth 15 billion euros and to create a joint venture in zirconium.

The euro denomination of many of the deals -- although uranium sales are in dollars -- will please Paris, which has been expressing growing concern about the weakness of the dollar. The US currency last week fell to a record low against the euro.


Please Wait while comments are loading...