Japan’s crippled nuclear power industry is also having a negative impact on the uranium enrichment industry. Urenco, the world’s second-largest nuclear fuel supplier, has said it anticipates “reduce[d] demand for [its] services” even once operations restart in Japan, according the The Times. However, the company sees market growth for enriched uranium coming from India, China, Vietnam and Indonesia and still plans to almost double its production capacity over the next two years.
Urenco is owned jointly by the UK and Dutch governments as well as two leading German utilities, RWE (ETR:RWE) and E.ON (ETR:EOAN). All four parties are now looking to sell the $15-billion company. A sale could be finalized as early as this year, sources told The Wall Street Journal. France’s Areva and Canadian miner Cameco (TSX:CCO,NYSE:CCJ) are said to be potential suitors; both companies have hired investment banks to advise on a possible transaction. Canada Pension Plan and several private-equity firms may also be considering a potential bid.
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Japan’s Ministry of Economy, Trade and Industry estimates that nuclear power plant shutdowns are costing utilities 1.2 trillion yen (US$13 million) annually. Japan Atomic Power has suffered the most due to the shutdowns and recently secured 100 billion yen in loans from Japanese financial institutions, including the Development Bank of Japan and Mizuho Corporate Bank, according to a Power Engineering report. The company is expected to require additional financial support given that the timing of nuclear restarts is still uncertain.
The island nation’s Nuclear Regulation Authority is set to unveil new standards in July and later in the fall anticipates restarting reactors that pass safety inspections. “Securing economical and stable energy is a necessary condition for promoting the nation’s industrial competitiveness and stimulating economic recovery,” said Prime Minister Shinzo Abe at a Council on Economic and Fiscal Policy meeting last week. Attendees at the Industrial Competitiveness Council’s meeting, also last week, showed concern about stable energy supply, a shortage of which could “severely damage companies’ competitiveness,” reported the Washington Post News Service.
The news agency said sources close to the prime minister have intimated that as many as 30 of the 48 idled nuclear reactors could be reactivated in the future if the federal government can win local public support. The issue could become a key campaign plank for the upcoming House of Councillors election this summer.