Areva picks Idaho for uranium enrichment plant

LOS ANGELES, May 6 (Reuters) - Areva Inc, the U.S. unit of France's Areva Group (CEPFi.PA) on Tuesday announced a site in Idaho for a $2 billion uranium enrichment plant to open in 2014.

Lucrative tax incentives of about $400 million offered by Idaho for the new plant helped Areva decide on Idaho rather than a proposed site in New Mexico, an Areva spokesman said.

The plant will be known as the Idaho Falls plant and is 18 miles from Idaho Falls, Idaho, near the Idaho National Laboratory, a federally run lab where nuclear energy work has been done for more than 50 years.

An Areva spokesman said about 1,000 workers will be hired during construction that is to start in 2011 and once the plant is running, the plant will employ about 250 engineers and technicians.

Areva Inc, based in Maryland in the suburbs of Washington, D.C., will apply for local and federal permits, including a license from the U.S. Nuclear Regulatory Commission to operate a uranium enrichment plant.

The plant will use advanced proven centrifuge technology developed by the Enrichment Technology Company, an Areva subsidiary.

Two other companies are already building centrifuge technology uranium enrichment plants in the United States -- European consortium Urenco's Louisiana Energy Services at a site in southeastern New Mexico and USEC Inc (USU.N), which is building a plant in Piketon, Ohio.

USEC already operates the only working U.S.-based uranium enrichment plant, which uses gaseous diffusion technology, in Paducah, Kentucky.

Areva Inc said the United States imports about 90 percent of the enriched uranium used in nuclear power plants, and more than half of that comes from Russia in a pact to expire in 2013.

Areva said in a press statement that even if new U.S. nuclear power plants are not built in about a decade as expected, the existing 104 U.S. nuclear reactors will need to increase its supply of enriched uranium.

Areva owns and operates the Georges Besse enrichment plant in France which uses the gaseous diffusion method, passing uranium gas through porous barriers to separate the uranium-235 needed to power nuclear power plants. The centrifuge method uses 50 times less electricity and much less water than the gaseous diffusion method, AREVA said.

Areva plans to open in 2009 in France a new gas centrifuge enrichment plant, George Besse II.

The centrifuge process uses uranium gas separated by high-speed rotation in a vacuum-sealed cylinder. The force created pushes the heaver particles of the gas toward the cylinder wall, where they fall. The lighter uranium-235 particles go to the center, where they are transported upward and are captured.

Once enough U-235 is captured, it is cooled to form a crystalline solid which is shipped to a fuel fabrication plant to be processed into fuel assemblies used at nuclear power plants.

Areva Group is owned more than 80 percent by the French government. (Reporting by Bernard Woodall; Editing by Christian Wiessner)