- Areva, CNNC sign memorandum to cooperate on mining, recycling
- France says recycling cooperation accord may be worth $22B
China National Nuclear Corp. may buy a minority stake in Areva SA as part of a wide-ranging nuclear cooperation accord signed Monday just as the loss-making French reactor builder is seeking billions of euros to stay afloat.
“The partnership planned between AREVA and CNNC involves a possible minority stake acquisition by CNNC,” Courbevoie, France-based Areva said in a statement. Nuclear fuel businesses falling within the agreement include uranium mining, recycling, decommissioning and dismantling.
The French President’s office said in a separate statement another memorandum may lead to “industrial cooperation” on nuclear waste recycling worth 20 billion euros ($22.1 billion), with potentially half for Areva.
Areva rose as much as 6.1 percent to trade at 6.895 euros at 2:13 p.m. in Paris. The shares have dropped by about a quarter since the start of the year amid mounting losses.
The memorandum of understanding between Areva and CNNC was signed during President Francois Hollande’s two-day visit to China that began Monday. It comes as state-controlled Areva is selling a majority stake in its nuclear reaction division to
Electricite de France SA. The company said in July it will need to raise 3.4 billion euros ($3.75 billion), mostly through a capital increase, to reduce debt.
“This project offers numerous opportunities for both Areva and CNNC,” Areva Chairman Philippe Varin said in the statement. “Strengthening the cooperation with our Chinese partners is an integral factor for Areva’s future success.”
China is the biggest market for new nuclear reactors. Areva and EDF are building two so-called EPR models at Taishan while EDF reached an accord with another Chinese company, China General Nuclear Power Corp., to develop a plant in the U.K. at Hinkley Point.
Areva reported last week it will book a “significant amount of provisions” in the fourth quarter as it cuts 2,700 jobs in France. The company, which plans to refocus on uranium mining and enrichment and nuclear waste recycling, needs to fund 7 billion euros in expenditure and debt repayment by 2017.