USEC, Korea sign new fuel supply contract

USEC Inc. recently signed a contract valued at approximately $400 million with Korea Hydro & Nuclear Power Co., Ltd. (KHNP) to sell separative work units (SWU) of enriched uranium for the utilityÂ’s operating and planned light-water nuclear power reactors.

The new contract with the Seoul-based utility runs through 2013 and covers new deliveries of enriched uranium as well as improved terms on existing commitments.

“Our new contract with Korea Hydro & Nuclear Power underscores the commitment of this world-class utility to the reliable and competitive source of enriched uranium that USEC offers,” said John M.A. Donelson, USEC vice president, marketing and sales.

“The new agreement with KHNP, which is one of the world’s largest nuclear utilities, represents the nuclear industry’s support for USEC’s transition to the next generation American Centrifuge Plant in Piketon, Ohio.”

“Enriched uranium from USEC is important to Korea Hydro & Nuclear Power because our 20 nuclear power plants supply more than 40 percent of Korea’s electric power generation,” said Jong-shin Kim, president & CEO of KHNP.

“KHNP eagerly anticipates the deployment of the American Centrifuge Plant and wishes USEC great success in the endeavor.”

USEC is in the process of demonstrating and deploying the American Centrifuge technology, which will replace its existing gaseous diffusion technology and is expected to be the worldÂ’s most efficient uranium enrichment technology. The American Centrifuge Plant will use modular architecture that allows capacity to be added incrementally, thus allowing USEC to meet the worldÂ’s growing demand for nuclear fuel.

USEC is working toward beginning commercial plant operations in late 2009 and having approximately 11,500 machines deployed in 2012, which would provide about 3.8 million SWU of production based on current estimates of machine output and plant availability. Enrichment is the process by which the concentration of the fissionable uranium isotope is increased in order to make fuel for nuclear power plants.