June 25, 2018 / 3:33 PM / a month ago

France's Orano, China's CNNC prepare nuclear fuel plant deal

PARIS (Reuters) - French state-owned nuclear fuel group Orano has agreed with China’s CNNC to do preparatory work for the sale of a nuclear fuel reprocessing plant to the Chinese company, in the latest attempt to seal a deal that has been 10 years in the making.

FILE PHOTO: The logo with the new company name "Orano" of the French nuclear fuel group Areva is seen on the Areva Tower in La Defense near Paris, France, January 23, 2018. REUTERS/Philippe Wojazer/File Photo

Orano said on Monday the agreement - which runs until the end of 2018 and covers work to be carried out by Orano to prepare the sale of the recycling plant - was confirmed during a visit by French Prime Minister Edouard Philippe to China.

An Orano spokeswoman said the work would cost the French company about 20 million euros ($23.4 million) and cover in particular project management and quality control paperwork.

She added talks about the plant were continuing, with the price being one of the remaining issues to be agreed.

Negotiations about the 800 ton capacity plant have been going on for a decade, with new agreements signed regularly, usually during Franco-Chinese diplomatic meetings. But so far the two parties have not been able to agree on a price for transferring the technology.

Following a visit to China by French President Emmanuel Macron in January, Finance Minister Bruno Le Maire said the deal would be worth 10 billion euros ($12 billion) and that France had been given assurances a contract would be signed this spring. That deadline passed last week without a contract.

Ten years ago, Orano - formerly called Areva - had hoped for 15 billion euros.

Leading civil nuclear nations such as the United States, Britain and Japan have ended or are phasing out spent-fuel processing. France and Russia are the only two nations recycling spent fuel from nuclear reactors, but France no longer operates the breeder reactors which are suitable to use this fuel.

Critics say that recycling increases the risk of nuclear proliferation, as it separates out plutonium, and is not cost effective because uranium is trading near decade lows.

Reporting by Michel Rose; Writing by Geert De Clercq; Rditing by John Irish and Mark Potter

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