News / Europe

Planned Urenco Sale Divides Secretive Nuclear Fuel Club

View to the entrance of the Uranium enrichment plant of German company Urenco in Gronau, Germany, Jan. 22, 2010.
View to the entrance of the Uranium enrichment plant of German company Urenco in Gronau, Germany, Jan. 22, 2010.
 The planned sale of Urenco poses a quandary for the three European governments who own it. They want a good price for the world's second-largest nuclear fuel vendor, yet are suspicious of every buyer's motives.

Germany, Britain and the Netherlands, which set up Urenco more than 40 years ago, have a duty to ensure secret technology that could be used to make an atomic bomb does not fall into the wrong hands.

U.S.-Japanese reactor builder Westinghouse, French nuclear group Areva and a consortium led by a former industry insider have been reported to be eager to buy a stake in Urenco, estimated to be worth up to 10 billion euros ($13.53 billion).

Other bidders for the company, which enriches uranium into nuclear fuel sold to power stations in Europe, the U.S. and Asia, could include uranium miners, infrastructure funds or even China.

Talks are likely to be complicated by disagreement among the governments about how much of the company to sell and who to sell it to. Germany wants to dispose of its one third share, Britain is considering an exit, while the Dutch prefer the status quo.

The nationality of potential buyers is also a tricky issue.

The Dutch want Urenco to remain European-owned, but London and Berlin seem open to bids from further afield. Any of the three governments can veto a deal.

Bankers involved in the talks do not expect a deal before the end of this year.

"There are a lot of thorny issues we are working through with our partner governments. We need to sell at the right value, while safeguarding the technology,'' a government official from one of the Urenco consortium countries told Reuters.

Urenco was complicated from the start. Not many companies are set up and governed by an intergovernmental treaty, but Urenco is ruled by three.

The 1970 Treaty of Almelo, which created the company, requires each country to protect Urenco's enrichment technology. That protection did not work so well initially.

In 1975, Abdul Qadeer Khan, a Pakistani scientist who worked for a Dutch nuclear research lab and had access to the Dutch Urenco plant in Almelo, was accused of espionage and fled to his native country, where he set up an enrichment facility and later became known as the father of Pakistan's nuclear bomb.

Three decades later, in 2004, Khan confessed he had sold nuclear secrets to Iran, Libya and North Korea.

Time to sell

 Following Japan's Fukushima disaster in 2011, Germany decided to move out of nuclear power. Last month, Berlin said that German utilities E.ON and RWE, which own its 33 percent Urenco stake, want to sell.

Britain has nine nuclear plants and plans more by 2025. But the government does not see utilities services as part of its role and wants to privatise as much as possible.

Britain is talking to Urenco's other shareholders but says that no formal position has been taken yet.

Dutch authorities are more cautious and say they want to keep the company in safe hands.

One banker said a possible scenario could be for Germany to sell 33 percent and Britain 16 percent, so that only a 49 percent minority stake is put on the block.

Urenco is the second-largest of four major nuclear fuel producers, behind Russian firm Tenex, and ahead of U.S. company USEC Inc and Areva, according to the World Nuclear Association.

Technology firewall

Even though buying a stake in Urenco would not grant access to Urenco's top-secret centrifuge technology, the governments worry that a new owner could attempt to breach the firewall they have erected to protect it.

A decade ago the governments agreed to put centrifuge research and production into a separate unit, the Enrichment Technology Company (ETC). This separated the business of selling nuclear fuel from the business of making the centrifuges that enrich it.

 "Technology development is now in the hands of ETC. It is holding assets which in both the Netherlands and in Germany are considered the deepest industrial secrets those countries have,'' Carnegie Endowment non-proliferation expert Mark Hibbs said.

The firewall allowed French state-owned nuclear group Areva in 2006 to buy a 50 percent stake in ETC from Urenco, giving it the right to buy ETC's centrifuges for its enrichment factories without gaining access to the technology.

The terms of cooperation with France were laid out in the 2005 Treaty of Cardiff. The U.S. also joined the Urenco group when it signed the 1992 Treaty of Washington as a prerequisite for the construction of a Urenco plant on U.S. soil.

Whether a sale requires another treaty depends on the buyer, but if the purchaser was non-European, a new treaty seems inevitable.

For Areva, a Urenco stake would be a defensive move. The firm is the West's only reactor builder which is also able to sell nuclear fuel, and might want to buy a Urenco stake to prevent competitors from acquiring a nuclear fuel business.

Westinghouse, owned by Japan's Toshiba, does not have that ability and a Urenco stake could strengthen its hand.

 "Countries like France, Japan and the U.S. already have nuclear know-how, signed the non-proliferation treaty and pose no proliferation risk,'' an Almelo Treaty country official said.

A Urenco bid by one of the Western uranium miners, notably from Australia or Canada, would also make business sense.

"It would be attractive to a company that has uranium assets and wants to add value downstream ,'' Carnegie's Hibbs said.

Firms like Cameco, the largest listed uranium producer, would have to consider a bid if the opportunity arose.

The wild card among potential buyers is a consortium led by former ETC chief Patrick Upson. The group is ready to bid for 66 percent of Urenco but refuses to name its partners, which probably include industrial and financial firms.

An even bigger wild card would be an approach by China, which has the world's biggest nuclear new-build program and little enrichment capacity of its own.

An industry source said he'd heard nothing about a possible Chinese bid. "But it certainly would make waves,'' he said.

You May Like

Germany Celebrates 25 Years of Unity

October 3 is a public holiday, marking the day in 1990 when East Germany and West Germany reunited More

Analysts: Russia's Syria Strikes Shake Regional Powers

If Moscow bolsters Assad, Saudi Arabia, other Gulf countries may feel obliged to step in More

Video Innovative Nano-Tech Water Filter Prevents Disease

It can absorb contaminants like copper, bacteria, viruses and pesticides, says Askwar Hilonga, who has been successfully trying out his product in Arusha More

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Russia’s Syria Involvement Raising Concerns in Europei
Luis Ramirez
October 02, 2015 4:45 PM
European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video Russia’s Syria Involvement Raising Concerns in Europe

European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video First Self-Driving Truck Debuts on European Highways

The first automated semi-trailer truck started its maiden voyage Friday, Oct. 2, on a European highway. The Daimler truck called 'Actros' is the first potentially mass-produced truck whose driver will be required only to monitor the situation, similar to the role of an airline captain while the plane is in autopilot mode. VOA’s George Putic reports.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Migrant Influx Costs Europe, But Economy Could Benefit

The influx of hundreds of thousands of refugees and migrants is testing Europe’s ability to respond – especially in the poorer Balkan states. But some analysts argue that Europe will benefit by welcoming the huge numbers of young people – many of them well educated and willing to work. Henry Ridgwell reports from London.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

Video New Fabric Helps Fight Dust-Related Allergies

Many people around the world suffer from dust-related allergies, caused mainly by tiny mites that live in bed linen. Polish scientists report they have successfully tested a fabric that is impenetrable to the microscopic creatures. VOA’s George Putic has more.

Video Burkina Faso's Economy Deeply Affected by Political Turmoil

Political turmoil in Burkina Faso over the past year has taken a toll on the economy. The transitional government is reporting nearly $70 million in losses in the ten days that followed a short-lived coup by members of the presidential guard earlier this month. The crisis shut businesses and workers went on strike. With elections on the horizon, Emilie Iob reports on what a return to political stability can do for the country's economic recovery.

Video Fleeing Violence, Some Syrians Find Refuge in Irbil

As Syrians continue to flee their country’s unrest to seek new lives in safer places, VOA Persian Service reporter Shepol Abbassi visited Irbil, where a number Syrians have taken refuge. During the religious holidy of Eid al-Adha, the city largely shut down, as temperatures soared. Amy Katz narrates his report.

Video Nigeria’s Wecyclers Work for Reusable Future in Lagos

The streets and lagoons of Africa's largest city - Lagos, Nigeria - are often clogged with trash, almost none of which gets recycled. One company is trying to change that. Chris Stein reports for VOA from Lagos.

Video Sketch Artist Helps Catch Criminals, Gives a Face to Deceased

Police often face the problem of trying to find a crime suspect based on general descriptions that could fit hundreds of people in the vicinity of the crime. In these cases, an artist can use information from witnesses to sketch a likeness that police can show the public via newspapers and television. But, as VOA’s Greg Flakus reports from Houston, such sketches can also help bring back faces of the dead.

Video Thailand Set to Build China-like Internet Firewall

Thai authorities are planning to tighten control over the Internet, creating a single international access point so they can better monitor content. VOA Correspondent Steve Herman reports from Bangkok on what is being called Thailand’s own "Great Firewall."

Video Croatian Town’s War History Evokes Empathy for Migrants

As thousands of Afghanistan, Iraqi and Syrian migrants pass through Croatia, locals are reminded of their own experiences with war and refugees in the 1990s. VOA's Daniel Schearf reports from the town of Vukovar, where wartime scars still are visible today.

Video Long Drought Affecting California’s Sequoias

California is suffering under a historic four-year drought and scientists say even the state's famed sequoia trees are feeling the pain. The National Park Service has started detailed research to see how it can help the oldest living things on earth survive. VOA’s George Putic reports.

VOA Blogs