Nicolas Maes succeeded Philippe Knoche as CEO of Orano on Nov. 15 at a pivotal moment for France's state-owned fuel cycle company: Orano recently greenlita €1.7 billion ($1.8 billion) plan to expand capacity at its Georges Besse II uranium enrichment plant, even as it has had tohalt production at its decades-old mine in Niger thanks to a closure of regional borders following this summer's military coup. During last week's World Nuclear Exhibition, Maes sat down with Energy Intelligence's Grace Symes to discuss these challenges, as well as some of the back-end issues that have limited Orano's production of mixed oxide (Mox) fuel assemblies over the past decade. The first part of the resulting interview, edited for brevity and clarity, appears below. The second part, focusing on Orano's back end challenges, will be published next week.
Q: Do you think the nuclear fuel market has entered a new normal following Russia's invasion of Ukraine? Or do you think it's still a little bit precarious?
A: For the nuclear fuel market there are two positive things. One of them is the fact that most of the countries have decided to restart or relaunch nuclear, or extend the life of existing power plants. As a result, all those plants need fuel. That’s a good opportunity for Orano. We see the volumes available, we see the requests from the customers increasing both to serve the current fleet that is being extended, as well as in anticipation for the coming fleet. It’s not normal business as usual. It's a turn in our industry, probably similar to what happened back in 2007 and 2008.
The crisis with Ukraine didn't change the volume on the markets. The number of reactors operating is still the same. But it tends to create a divide or polarization. As a result, we see that customers in what we call the Western world, say Europe and the Americas, are focused a bit more on where is their sourcing coming from, and willing to make sure that there are in the Western world enough capacities to supply them. That’s a big change.
Q: What would you say is Orano’s biggest priority right now?
A: I would say we've got two priorities. One of them is to continue to develop and improve on the mastery of our current operations. Our customers are expecting from us that we deliver today for their existing plants. The second one is of course to implement and deliver properly the development opportunities that we've identified.
Q: Given new security of supply concerns, particularly in Europe, do European buyers get priority when it comes to Orano’s contracting?
A: I wouldn't put it as a matter of priority. We are investing at the moment in capacity to be able to supply all the customers that are willing to trust us and are ready to contract with us. When you look at our sales, France of course is a big market for us, it's making up a bit less than 50% of our sales. But that also means that the rest of the world is more than 50% of our sales, with significant markets in Asia and the United States. And we've got customers in the Middle East and central Europe as well.
Q: How close is Orano’s working relationship with Russia? Does Orano have any remaining contracts or partnerships with Rosatom?
A: No, we don't. Not directly with Rosatom. Our contractual relationship with Rosatom was very limited before the crisis. Some of them [contracts] were related to engineering for example in the fuel cycle or transport contracts. Today we don't have any active contracts with them.
Q: I also want to ask you about Niger. It's been four months since the coup in Niger and my understanding is that the Somair processing plant has shut down and the mine has shut down or will soon due to a lack of supplies. Is there a plan to restart imports of mining supplies or exports of uranium from Niger?
A: Yes, the plan is to resume activities in the medium term. However, we operate in Niger with conditions and limits at the moment. The main logistics corridor is closed, not because of the mining business, it's closed for political reasons that have nothing to do with Orano.
When you say we've shut down, what we've done is we've put it [Somair] into maintenance. With the plant first being in maintenance, the mine was kept active, which allowed us to build inventory in between the mine and the plant. So when things reopen, we'll be able to catch up and produce again fairly quickly. We're trying to source reagents for the mine or spare parts for the plants. But we're doing it within the boundaries of what the political context is. At the moment we have not been successful to source in the proper way materials to restart.
Q: But even though nothing is specifically targeted at Orano, my understanding is that you won't be able to restart the processing plant until you're able to find another way of importing reagents. Is that correct?
A: Yes. That’s correct because we need that reagent to operate the plant. In fact, we'll be able to restart very quickly — it will be a matter of weeks when the main logistics corridor reopens.
Q: But that's up to the Economic Community of West African States.
A: It is.
Q: Do you have any indication that will reopen? Or is it just optimism?
A: No. At the moment, we don't have line of sight. To put things in perspective, Niger production on the market is 3% of the worldwide production. So this is not a major impact on the market. From an Orano perspective, this is about 15% of our supply. This is not significantly affecting our ability to supply our customers; we can source somewhere else.
Q: That replacement supply of the material that would normally be coming from Niger. Where is that sourced from?
A: I'm not going to disclose where we source all of our materials but you know that we've got mines in Canada and the mines in Canada are ramping up. The restart of McArthur at the end of 2022 is bringing new materials on the market. We have our operations in Kazakhstan. And we can draw from our inventories as well. So at the moment, we’ve not missed one customer delivery.
Q: The junior Global Atomic has said they've successfully implemented a supply route into Niger through Togo and Burkina Faso. Is that not an option for Orano?
A: They're not at the same stage as us. The things that they need to bring in are in small quantities, not high tonnage, so possibly they managed to get something. I don't know the reality of what they truly imported.
Q: Does Orano have any plans to expand its Malvesi and Philippe Coste conversion facilities?
A: Not in the short term. At the moment, we're focusing on expanding our enrichment facility, we've announced a €1.7 billion investment in Tricastin to increase our capacity by more than 30%. We are also preparing significant investments in mining with new projects in new countries. At the moment in the nuclear fuel cycle this is our focus, along with the new scheme for the back-end and performance excellence.
Q: I believe the Philippe Coste plant is not yet operating at full capacity. Is that due to any operational issues?
A: It’s still a ramp-up issue. 2023 will be the highest production since we restarted those plants: Philippe Coste and [the] Malvesi plant. The last few months have been extremely encouraging on our ability to go one further step next year. We've been operating complex sites for a while.
What we're experiencing is that when you restart a complex site the ramp-up takes sometimes a bit longer than what you expect. Our belief is that this is due to the time it takes to get the proper competencies, and this puts in perspective the promises that some people may be making sometimes on their capacity to ramp up extremely quickly.
Q: When it comes to enrichment, you have this traditional enrichment expansion. What would it take for Orano to fund a Haleu [high-assay low-enriched uranium, which is uranium enriched up to 20% U-235) plant or a Haleu enrichment line? Is that just contracts? Or would that require something beyond contracts?
A: The main goal at the moment would be contracts and a market, what is difficult is that the market is to come but doesn't exist. So nobody places contracts for Haleu at the moment and if you're not backed by a contract, you cannot invest in a plant. Then the financing would have to be analyzed, whether subsidies or governments could support that. The final one is the technical ability to do it. We believe that with our engineers and experts, we've got the knowledge to be able to develop that. But at the moment, it's difficult to invest without the market.
Q: Do you see Haleu as a potential international market? Or do you see it potentially because of the higher security concerns being separated by country?
A: This is something where there could be room for international cooperation. Definitely. There is international cooperation on Mox, which also has its specificities. There is no reason why we couldn't cooperate on Haleu. It will have to be done properly, but it can be done. Similarly, if you put it on the technology side, enrichment is a sensitive technology as well. And there is international cooperation with the proper safeguards. I'm a great believer in international cooperation. I think for Haleu this will be necessary.
Q: Orano has been quite active on the transport side as well, when it comes to normal enrichment and also Haleu. Do you see that as a way to get into the Haleu sector early without committing tons of money to building a plant?
A: We’re not transporting our own material, because we don't own material. What we’re transporting is the material of our customers. As soon as customers would have materials to transport we will develop and propose a solution. I don't think you could say entering in transport of Haleu is a step in the market of Haleu. Transport is a different market. But I believe we’re the only company on the worldwide scale that is doing both the materials and the transport. Our competitors in transport are companies that have not involved themselves in enrichment activities. What is true is that having a deep understanding of those materials and the regulations is an advantage for transport.
We are working on it. For instance, last September, we have signed with Urenco a consortium agreement for testing and development of the new 30B-X cylinder designed to transport uranium enriched up to 20%
