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Areva: layoffs and restructuring

Nuclear Monitor Issue: 
WISE Amsterdam

Unions at nuclear reactor maker Areva fear up to 4,000 staff, or 10 percent, will lose their jobs as part of a massive restructuring program that is to be set up in reaction to a drop in demand caused by the German nuclear phase-out and the Fukushima disaster. Areva is "world leader in nuclear power", active in 45 countries, but 38% of it's revenues and 63% of workforce is in France. Areva is expected to present a plan in December on a rethink of its corporate strategies in the wake of the Japanese disaster.

On October 25, after weeks of rumors Areva announced its intention to close its subsidiary  FBFC (Franco-Belge de Fabrication du Combustible) Dessel MOX-fuel plant in Belgium due to “a decrease of demand in Western Europe and an over-capacity on the market”. FBFC operates plants in Dessel (with a capacity of 500 mt a year) and in Romans, France (1,400 mt/y). Total demand supports production of only 1,000 mt/y, Areva said. That is more than Dessel can support alone; in addition, the Belgian plant does not make uranium oxide powder, which it has to import from the Romans facility. Management of FBFC International had informed the labor-management committee at Dessel that it intended to gradually phase out activities there, Areva said. This phase-out, if it is confirmed, would begin by halting fuel assembly fabrication, which supports 120 jobs, in early 2012. Rod assembly and dismantling activities could continue until 2015, Areva said, preserving 30 jobs.

In another move, Areva suspended work on developing the Bakouma mine, which is estimated to hold about 32,000 tons of uranium, in the Central African Republique “until the market value of the commodity rises again”, an Areva spokesman. The price of uranium subsequently dropped by about 30 per cent, at a time when Areva was hoping for a global nuclear power renaissance.

Areva began development works at the mine under a deal signed in 2007 and to date has spent 106 million euros (US$146 million) on developing the site. The 2007 deal ended friction between Areva and the country's authorities, who had handed mining rights to British-Canadian firm UraMin in 2006. Areva bought out UraMin in July 2007 to the displeasure of the government, which said the "irregular" sale showed "disregard for the rights and interests" of the Central African people.....

Areva shares
The price of Areva shares decreased extremely after Fukushima. The highest price in the last year was on February 14 (37.90 euro), the price of one Areva ordinary share on November 7, was 20.15 euro, so it had lost 40% of its value.

Sources: RTBF & Platts, 25 October 2011 / Reuters, 21 October 2011 / SMH, 3 November 2011 / Dow Jones, 4 November 2011 /, 10 November 2011
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