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UPDATE 1-Outokumpu increases stake in Fennovoima reactor project
February 19, 2014 / 8:47 AM / in 4 years

UPDATE 1-Outokumpu increases stake in Fennovoima reactor project

(Adds CEO comment, background on Fennovoima project)

HELSINKI, Feb 19 (Reuters) - Finnish stainless steelmaker Outokumpu has raised its stake in the planned Fennovoima nuclear reactor to 12.5 percent from an original goal of 10 percent and confirmed its commitment to a project whose viability has been questioned by some analysts.

Fennovoima is aimed at securing cheap energy for its investors including Finnish industrial firms such as Outokumpu and municipal utilities. But analysts have warned some members may withdraw due to weak finances and low energy prices.

Germany’s E.ON, originally a top investor, left the consortium in 2012 as part of a broader strategic review. Russian nuclear firm Rosatom stepped in to take its place, but some 20 smaller owners including Atria, Boliden and Componenta have also dropped out.

Outokumpu said its investment in Fennovoima, to be paid over the next decade, would be around 210 million euros, compared with its earlier estimate of around 150 to 200 million euros.

The company’s plants in Tornio are the single largest consumer of electricity in Finland.

“We want to ensure a stable, predictable and low-carbon energy source at production cost to our operations in Finland,” Chief Executive Mika Seitovirta said in a statement on Wednesday.

It was not clear whether Outokumpu’s move would persuade others to stay. Members are expected to declare a commitment to the project, estimated to cost up to 6 billion euros ($8 billion), at the end of this month.

Outokumpu said the increased stake did not come from a specific company.

$1 = 0.7272 euros Reporting by Ritsuko Ando; Editing by Tom Pfeiffer and Mark Potter

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