This giant contract already had many adventures

The iron arm continues between Areva and EDF on the famous multiannual contract treatment and recycling of nuclear fuel. After three years of negotiations, the situation became so tense that the State was called by the CGT and local elected representatives to mediate between the two spearheads of the French nuclear, who still cannot agree.

Agency of interests of the State (EPA), who sits on the boards of Directors of two public companies, and the Directorate General of raw materials and energy (DGMPE), had to whistle the end of the re-creation and "express their wish" to see an agreement reach before the end of the year. Many meetings were held at the Summit.

The two are sentenced to agree. In the enhancement of the fuels, EDF is the main client of Areva, which is almost unavoidable in this market. At EDF, it is hoped to lead "in the next few weeks." "Discussions are continuing," said we soberly in Areva.

The contract is for the endorsement of the cycle: the transport, treatment and recycling of EDF power plants from fuel. Each year, Areva retreat approximately 850 tonnes of fuels of the electrician in its plant in La Hague, in the English channel. A part is then recycled as Mox fuel by its subsidiary Melox, Marcoule in the Gard.

Massive issues

The industrial and financial stakes are massive. On the basis of a cost of reprocessing of approximately 1,000 euros per kilogram price assumption not too far from reality, according to professionals, the annual contract could reach 850 million euros. Originally, he had to wear over seventeen years, but its initial duration may be limited to five years.

Things get complicated with the endorsement of the cycle, projects that are also part of the negotiations. Specifically, it is built on the site of the Hague, a new pool of 4,000 tonnes to store the fuel before recycling (read below) and a new plant in the Hague or Marcoule reprocessing from uranium.

Each of these projects represent investments of hundreds of millions of euros. The first appears to be decided by the two companies, but the second is a problem. Who pays Which is the risk Who gets the profits "We must be creative in the negotiations," concedes a protagonist.

At EDF, it favours a scenario in which investment would be worn by Areva in exchange for a mode of compensation of type regulated, whose principles would be fixed in advance for 30 years. The company would be paid based on the costs of exploitation and capital, somewhat like RTE in electricity transmission networks. But such schema seems difficult to accept by Areva, which is probably not want to tie the hands without hope of remuneration progress through the course of the uranium.

Many adventures

Even if everyone wants to lead, but the positions of each and the other to remote date. According to some sources, Areva had entered negotiations with the idea of increase of 30 the price of its benefits to cover rising costs. Conversely, EDF hoped to extract a discount of 30 from the current price...

This giant contract already had many adventures. The previous version (2001-2007) had been signed in 2003 alone. This year, the two companies are working on the basis of a rider to 31 December. End of 2007, an audit by PricewaterhouseCoopers for EDF had triggered the war between the two groups. A point that the electrician had threatened in March last to interrupt its deliveries of plutonium to Areva.

According to the CGT of the nuclear group, "employees do not include this deadlock between two public companies". They fear that the terms of the future contract is unfavourable and have a social impact. "We cannot endorse a nuclear discount, defending an elected official. "In an industry like ours, serenity is the pillar of security".

Complex ingredients is apparently grafted other thorny issues, such as participation or non-EDF to the consortium of the future Georges Besse II uranium enrichment plant. Anne Lauvergeon group has already invited GDF Suez to take part in the draft, irritating its historic partner EDF.