The USEC Inc. board of directors has voted to continue the company’s investment in the American Centrifuge Plant for the month of October, but at a reduced spending rate.
BETHESDA, Md. – The USEC Inc. board of directors has voted to continue the company’s investment in the American Centrifuge Plant for the month of October, but at a reduced spending rate as the company continues working with the Department of Energy (DOE) to achieve a conditional loan guarantee commitment for the project by November 1. The company is directing suppliers to suspend certain work and notifying workers of possible future layoffs.
“We have made significant progress on the project and believe the American Centrifuge is ready for commercial deployment,” said John Welch, president and CEO. “While challenges remain, we are working toward a conditional commitment that will meet DOE’s requirements and enhance shareholder value while protecting the U.S. taxpayer.”
“Working with our strategic investors, we expect October to be a month of intense interaction with the DOE so we can continue to deploy this innovative American technology – one that is critical to the nuclear fuel cycle and to our energy and national security,” Welch added. “Absent a conditional commitment by the end of October, layoffs of employees and further actions with suppliers are likely to occur.”
USEC’s two strategic investors, Toshiba Corporation and The Babcock & Wilcox Company (B&W), remain supportive. USEC entered into an amendment to extend its standstill agreement with both companies through October 31, providing additional time to achieve a conditional commitment and close the $50 million second phase of their $200 million investment in USEC.
During the past two months USEC and its strategic investors have developed a plan to strengthen project execution. The process of providing additional financial depth to the project continues. USEC remains actively engaged in an evaluation of its strategic alternatives as well as various project structures in order to strengthen the project, protect shareholder value, and address DOE’s concerns.
In the past two years, USEC has achieved significant progress in the operation and performance of the American Centrifuge technology, including the following:
- Operated production-ready centrifuges in a commercial plant configuration;
- Accumulated total operating run time of more than 800,000 machine hours;
- Validated uranium enrichment production in excess of our target production level of 350 SWU per machine per year;
- Launched American Centrifuge Manufacturing, a joint company with B&W to manufacture centrifuge machines;
- Demonstrated capability to manufacture machine components at a sufficient rate to support commercial plant deployment;
- Revised its project plan to directly involve B&W and Toshiba expertise in managing 90 percent of the “go-forward” project costs, and
- Worked to incorporate lessons learned and modifications derived from the operating experience of the lead cascade test program.
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Source: USEC, Inc.
Image: USEC, Inc.