KEPCO/Urenco in talks for stake in U.S. uranium plant

Sources close to the deal say South Korea’s KEPCO is in talks to buy a stake in a U.S. uranium enrichment plant from Urenco.

South Korea’s Korea Electric Power Corp (KEPCO) is in talks with UK-based uranium-enrichment company Urenco to buy a stake in a U.S. uranium enrichment plant from Urenco, government and industry sources said on Wednesday.

The size of the planned investment was not disclosed, the sources who had direct knowledge of the planned deal said.

The aim is to build a stable uranium supply for South Korea, which, under a treaty with the United States, cannot reprocess spent nuclear fuel for fear of exacerbating tensions with North Korea.

South Korea, Asia’s fourth-largest economy, depends heavily on oil and gas imports, but has 23 nuclear reactors that supply a third of its power. The country plans to add 11 more by 2024.

“Based upon commercial considerations, KEPCO is in talks with Urenco to invest in one of the uranium-enrichment plants which could be the most advantageous to KEPCO,” a senior source at the country’s Ministry of Knowledge Economy told Reuters by phone. The ministry is in charge of energy policy.

South Korea’s nuclear programme has been involved in a series of minor incidents and a scandal over forged quality certificates for parts used in what the government insists are non-essential operations, events that have caused two reactors to be shut.

State-run utility KEPCO transmits and distributes power across the country. It is the parent of Korea Hydro and Nuclear Power (KHNP) which runs the reactors.

“Securing uranium stably is important as KHNP imports enriched uranium under long-term contracts so as to be able to run its reactors,” the ministry source said, declining to be identified as he was not authorised to speak to media.

A KEPCO spokesman declined to comment.

KEPCO owns stakes in five overseas uranium exploration and mining projects – three in Canada, one in Niger and one in the United States, according to company data. KHNP owns a 2.5 percent stake in France’s nuclear giant, Areva.

South Korea is not allowed to reprocess spent fuel or transfer nuclear waste to a third country under a bilateral agreement with the United States that expires in March 2014.

South Korea has produced 12,340 tonnes of nuclear waste as of June 2012, or 71 percent of its storage capacity at nuclear plants. With storage capacity running out, Seoul has said it will hold public consultations on where to build additional storage facilities.

(Reporting by Meeyoung Cho; Editing by Matt Driskill)

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