French industry conglomerate Areva, world leader in the atomic energy industry, faces an uncertain future following the nuclear accident in Japan.
PARIS Areva, the worlds No. 1 atomic energy conglomerate, has seen its share price plummet in the midst of the ever-worsening nuclear disaster in Japan, where it derives roughly seven percent of its turnover. Share prices continued downward in early trading Tuesday, after closing down 9.61 percent at the end of trading Monday.
Areva supplies Japan with nuclear fuel in the form of uranium as well as MOX, a mixture of uranium and plutonium. The Asian country currently accounts for 4.5 percent of its order book.
But on the global front, the disaster could also seriously erode future sales of new reactors. So far Areva, which had been confident of a revival of nuclear power, prefers not to countenance a sudden halt, as was the case following the Chernobyl disaster in 1986. Are we on the verge of another nuclear freeze? asks a company source. We dont know.
"Whether a revival will take place or not, depends on the outcome of the accident in Japan, which is impossible to predict, says one expert. One thing is certain: while China and South Africa continue to defend their nuclear projects, other countries have had the opposite response. On Monday, Switzerland suspended plans to renew its nuclear plants, while Germany announced a three-month moratorium on extending the lifetime of its reactors.
At the very least, experts predict that placed orders will be delayed and security requirements reinforced. The Nuclear Power Corporation of India Limited (NPCIL), which was in negotiations with Areva to acquire two reactors, has indicated that the accident in Japan would slow down its program.
Still, if nuclear power ultimately remains a future energy source, Areva is well-placed to profit. The group, headed by Anne Lauvergeon, is banking on its third generation plants, which have been designed to resist plane crashes, and also limit environmental damage in the case of a meltdown.
Another hope for Areva is the future investments by utilities into their existing reactors. As has been the case after every major nuclear accident, current nuclear power operations will analyze what happened and modify their plants on the basis of the lessons learned. The more safety requirements are raised, the more work there will be for suppliers like Areva.
Read the original article in French