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"The isotope produced ...is used to conduct medical procedures, including tests for cancer and heart disease."



GE May Be Interested Should Canada Opt to Sell Atomic Energy

By Theophilos Argitis and Alexandre Deslongchamps

Dec. 21 (Bloomberg) -- General Electric Co. might be a suitor if Canada decides to sell a stake in state-owned Atomic Energy of Canada Ltd., as Prime Minister Stephen Harper hinted this week, a company spokeswoman said.

``If and when the federal government indicates it would like to change its model for AECL, we would be interested in talking,'' said Kim Warburton, a spokeswoman for GE Canada, reiterating comments in September by General Electric Chief Executive Officer Jeffrey Immelt.

Areva SA, one of the world's biggest builders of nuclear power plants along with GE, may also be among the bidders if the government decided to sell, analysts said. Atomic Energy's commercial reactor and nuclear services businesses alone may fetch more than C$1 billion ($1 billion), said Catharina Saponar, head of European utilities and energy equity research at Nomura International Plc in London.

Harper said in a Dec. 18 interview that his government won't rule out any possibilities for AECL, after a shutdown at the nuclear plant operator led to delays in cancer treatments around the world. The plant generates medical radioisotopes used in surgeries and other procedures.

``AECL has some pretty big challenges to be addressed, and I can honestly tell you that the government is not sure today on the best ways to address them,'' Harper said in an interview at his official residence in Ottawa. ``We are not taking any options off the table,'' he said, when asked whether a sale will be considered.

World demand for nuclear power is growing, and utilities will probably add as many as 107 reactors by 2020, the World Nuclear Association said in its annual report in September. The Canadian province of Ontario plans to spend C$60 billion over 20 years on nuclear plants and renewable energy supplies.

Nuclear Growth

``The evidence is that the nuclear industry will probably be bigger in the future,'' Harper said. ``And Canada, as an historic player and the world's largest uranium producer, we want to make sure we are not left out of that.''

Officials at Fairfield, Connecticut-based GE ``are definitely focused on how to better position themselves,'' in the reactor industry, said Nicholas Heymann, an analyst with Sterne, Agee & Leach Inc. in New York.

The sale of a stake to GE or another rival is more likely than a sale of the whole company, said Matthew Collins, an analyst at Edward Jones & Co. in Des Peres, Missouri. It would allow the government to retain control of the Mississauga-based company, while relying on partners for technology, financing and operating skills.

``The story in nuclear engineering and construction is a risk-sharing story,'' Collins said.

Plant Closure

Atomic Energy had to keep its Chalk River, Ontario, reactor shut down longer than planned this month after the nuclear regulator asked for safety upgrades, causing shortages of medical radioisotopes and delaying surgeries and treatments. Parliament last week enacted an emergency law that allowed the reactor to resume operations.

Harper said the company faces financial and management challenges. The government said last month that it was reviewing Atomic Energy's ``structure'' and announced Dec. 14 that Chairman Michael Burns, who was appointed by Harper, was resigning effective Dec. 31.

The isotope produced at Chalk River, west of Ottawa, is used to conduct medical procedures, including tests for cancer and heart disease. Atomic Energy, which says it supplies more than half of the global market, said the reactor returned to service on Dec. 16 and that delivery of medical isotopes will resume today.

To contact the reporters on this story: Theophilos Argitis in Ottawa at [email protected] ; Alexandre Deslongchamps in Ottawa at [email protected] .

Last Updated: December 21, 2007 00:10 EST

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