Areva Slumps After Japan Quake as France Defends Nuclear Power
France’s Areva SA (CEI), largest provider of nuclear equipment and services, fell the most in more than two years after an earthquake and explosions at Japanese atomic power plants raised concerns about expansion in the industry.
French Environment Minister Nathalie Kosciusko-Morizet backed the nation’s reliance on nuclear power. Lawmakers and industry executives in nations including India, the U.S., Germany and the U.K. have called for reviews of atomic safety procedures as Japan deals with the worst nuclear accident since the 1986 Chernobyl disaster in Ukraine.
France has 58 reactors, more than any country other than the U.S. There are 442 reactors supplying about 15 percent of the world’s electricity, according to the London-based World Nuclear Association. There are plans to build more than 155 reactors, mainly in Asia. Sixty five reactors are under construction, the association said on its website. Japan accounted for 7 percent of Areva’s revenue in 2010, and 4.7 percent of its backlog, Areva spokeswoman Patrica Marie said.
“The group could be severely impacted by a shift in momentum in the nuclear industry,” Alex Barnett, an analyst at Jefferies International Ltd., wrote in a research note today. “The severe nuclear incident in Japan has put a global nuclear renaissance into question.”
Investment certificates for Paris-based Areva, in which the state holds 85.7 percent, fell as much as 10.4 percent, the biggest drop since November 2008. The non-voting shares were down 3.12 euros, or 9 percent, to 31.73 euros at 12:22 p.m. in Paris trading. Electricite de France SA, the world’s largest operator of reactors, slumped to its lowest in almost two years.
China Sales
Areva is trying to complete the sale of two reactors plus nuclear fuel to India, and of two other reactors in China. The Paris-based company is providing equipment for four reactors being built in France, Finland and China, and is competing to sell as many as 10 reactors in the U.K., which plans to start replacing old plants in the next decade. The company is also bidding for nuclear business in countries including Italy.
India, which had been planning to increase its nuclear power generation, will reconsider its expansion in the wake of the Japanese accident, Nuclear Power Corp. of India said.
“This event may be a big dampener for our program,” Shreyans Kumar Jain, chairman of India’s state-run monopoly producer, said by phone from Mumbai yesterday.
In December Areva and NPCIL signed a preliminary agreement for the construction of two reactors, the first of a series of six at Jaitapur in western India.
Order Delays
“Areva could see some delays in orders” including Jaitapur, Louis Boujard, an analyst at Aurel-BGC in Paris, wrote in a note today.
China may also weigh the effects of the accident as it completes its energy plans, Xie Zhenhua, vice chairman of the National Development and Reform Commission, said in Beijing yesterday. China plans to triple its number of reactors, according to the World Nuclear Association.
The pace of the country’s nuclear development won’t be affected by events in Japan, China National Nuclear Corp. President Sun Qin said in an interview in Beijing today.
France will continue to rely on nuclear power, Kosciusko- Morizet told Europe 1 radio today.
“We can’t switch to renewables overnight,” Kosciusko- Morizet said. “For the foreseeable future, we will need nuclear.” EDF is building its 59th reactor and plans a 60th in coming years.
The U.S., where Areva is building a nuclear-fuel recycling plant and has a joint venture to build reactor parts, should slow construction of new plants until officials can assess whether the Japan situation signals a need for more safety measures, said Senator Joseph Lieberman of Connecticut, an independent who heads the Homeland Security Committee.
To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net.
To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net
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