Saskatchewan keen to partner with AECL

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Saskatchewan Premier Brad Wall says he is keen to forge a partnership with Atomic Energy of Canada Ltd. to develop reactor technology and other business from the province's vast uranium deposits.

"It's a natural fit. We are the Saudi Arabia of uranium for the world," he said in an interview at his Saskatoon office.

"We'd be open to different partnerships or dynamics with other levels of government or companies to make sure Saskatchewan is a leader in this regard."

His comments come as Ottawa is considering selling off a majority stake in AECL's commercial business, but holding onto the problem-plagued Chalk River research facility.

Industry sources say Ottawa's list of potential investors includes private-sector companies and also Saskatchewan and Ontario, home of AECL's largest fleet of reactors.

The Harper government, which kicked off a review of AECL's future in 2007, is eager to reduce the company's ongoing reliance on the federal treasury. But it is reluctant to shut down the 60-year-old company, or sell its reactor business to foreign competitors.

"They're open to provincial participation" in AECL, said one industry insider.

No decisions will be made until after Ontario completes the bidding process for the purchase of two nuclear reactors. The winner - either AECL or its main rival, France's Areva Group- will be announced by June 20.

If AECL wins, the federal government will have a stronger hand in seeking partners. If AECL loses to Areva, options are more limited, but industry insiders expect the government would restructure the company to focus on its profitable maintenance business.

Since his election in November 2007, Mr. Wall has become a staunch advocate for Canada's nuclear industry. Last fall, Bruce Power - partly owned by Saskatoon-based uranium producer Cameco Corp. - completed a provincially financed feasibility study which recommended the addition of 1,000-megawatts of nuclear power. Areva, which has mining and milling operations in the province, has also shown an interest in selling reactors there.

Mr. Wall said the province has for too long exported uranium without getting the economic benefits of processing, research or other nuclear-related activity. He said he is particularly keen to work with AECL, or other companies, on developing smaller reactors.

"The vision of our government is that that has been a lost opportunity for Saskatchewan for a very long time. We need to be leaders in value-added opportunities," he said.

At a Canadian Nuclear Association meeting, Natural Resources Minister Lisa Raitt refused to comment on the government's plans for AECL, but said she was pleased to see widespread provincial support for the industry.

Ms. Raitt said Ottawa is positioning AECL to thrive, regardless of the outcome of the ownership review.

But that enthusiasm will be tested once Ontario begins negotiations with AECL and Areva to determine which company will provide the best package of reactor price, industrial benefits and guarantees against cost overruns.

Energy Minister George Smitherman acknowledged for the first time that Ontario's project will end up costing more than the initial estimate of $5.2-billion.

Sources say Ottawa is looking for Ontario to share the risk on any cost overruns, perhaps by taking an ownership stake in AECL.

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