The economics is the driver back in 2006 the annual enrichment market was worth around $5.4billion dollars, with the PGDP gone now at Paducah which was artificially keeping the enrichment price high at $135 per SWU, the thinking now is that price may now drop to a price of $80 per SWU and when you look at the cost of a particular plant the number of employees and their wages the costs of goods etc, it may mean that certain types of new plants may not be viable, and some will be perhaps, especially if they serve two purposes, which I believe Paducah may?
As I said the market for Uranium Enrichment was worth $5.4 Billion annually
I don't know what the market today is for Nuclear Medicine but they reckon by 2030 it will be worth around $ 24 Billion annually, so at a guess halve that and it would be around $12 Billion now.
We know the US is going to force the use of LEU for the supply of Mo99, I believe GEH has found a way now to use Laser technology to strip out the Mo99 from the rods taken from the reactor, that would have to equate to around half of the cost at least for supply of Moly99, that would have to be just as big an earner for GEH/GLE as what Uranium enrichment would be, and there are also other Isotopes they will collect during this process adding to the bottom line
GE spokesman Christopher White said the company has developed and tested a new, more efficient laser based technology that has not yet been commercially used to enrich uranium. But he said it would be used at Paducah. “If we were ultimately able to build a facility in Paducah that would certainly make Paducah one of the centers of excellence for laser based technology around the world,” White said. White said French-based AREVA’s portion is much smaller than GLE’s. He also said it’s important to know what was announced today and what wasn’t. “What we did announce was entering negotiations with the DOE. We have not made a firm commitment to build a plant,” White said. “So if the negotiations are ultimately successful we would then enter a multiyear licensing phase with the Nuclear Regulatory Commission. Once we had a site license at that point we would decide whether to build a plant or not.” White said if GLE does put a plant in Paducah it could bring hundreds of jobs to the community in addition to the thousands of construction jobs it would take to build the facility.
Mr White seems to contradict himself there doesn't he? in one breath he says But he said it would be used at Paducah. and in the next he goes on to say "If we were ultimately able to build a facility in Paducah" and then he says "that would certainly make Paducah one of the centers of excellence for laser based technology around the world,"
Why would he say it would make Paducah and not Wilmington one of the centers of excellence for laser based technology around the world?
Back in 2006 the annual market for Uranium enrichment was $5.4 Billion
Conclusions With the retirement of diffusion technology during the next decade, the artificially highprice of enrichment services could fall. (It is “artificially” high due to en try barriers: had a free market developed in enrichment, new cheaper capacity would have forced the retirement of the diffusion technology much earlier). The enrichment industry is now being more closely watched with the discovery of a Pakistani enrichment smuggling network, Braun and Chyba (2004). Thus,entry of new participants into the enrichment market is constrained by nonproliferation considerations, as well as by commercial interests. The enrichment industry response could bethe formation of a cartel to maintain artificially high prices. Unfortunately, high prices could encourage entry by countries like Argentina, Australia, Brazil, Iran, South Africa, and others. Without market intervention, prices could fall to competitive levels. This implies there would be no economic profits inthis industry for new entrants. For this reason, the financial outlook of uranium enrichers has been bleak, promp ting a Standard and Poor’s analyst to write: “On 29 September 2006, Standard & Poor’s Ratings Services affirmed its ‘A-/A-2’ long- and short-term corporate credit ratings on Europe-based uranium enrichment company Urenco Ltd . .. The enrichment market is undergoing very drastic changes, as TENEX (Rosatom)—which controls roughly 50% of global enrichment capacity but only 24% market share among end-customers—is looking to increase its share of direct sales to end-customers. The extent to which this will affect Western enrichment suppliers—USEC Inc. (B-/Negative/--), Areva (not rated),and Urenco—over the medium term remains to be seen, but will be strongly influenced by ongoing political and trade negotiations . . . The other major industry change is an expected phase-out of the non-economical gaseous diffusi on plants used by USEC and Areva, both of whom are expected to build centrifuge plants in the medium to long term.”
have a look on page 19 of that document and look for Rosatom Zelenogorsk because that would have to be the closest to what a GLE plant would cost only GLE's would be cheaper again, less cost to build, 6MSWU, about half the staff at tice the cost so more than likely the same there, but I reckon a GLE laser enrichment plant of 6MSWU would have a cheaper operating cost overall, the Levelized SWU Cost (AC)$/SWU for Zelenogorsk was $37 if you take that away from the $80 dollars they mention (instead of the $135 for Paducah), that equals 43 dollars $43 per SWU, I believe the GLE laser enrichment plant levelised cost would come in under the Zelenogorsk figure, by how much is the question, the other question is how much will be the actual sale price per SWU, I believe it is between $120 to $99 now?
SLX Price at posting:
96.0¢ Sentiment: Buy Disclosure: Held
(20min delay)