October 29, 2012 / 4:08 PM / 5 years ago

Nordion terminates Russian supply deal, begins new talks

* Nordion looking for new suppliers for moly-99

* Chalk River reactor licensed to operate until 2016

* Nordion lost bid to have aging supply facility replaced

Oct 29 (Reuters) - Canada’s Nordion Inc, struggling to find a fresh source of the raw material for its medical isotopes, said on Monday it had terminated a supply agreement with a Russian provider and would begin talks with a related Russian source.

Even if the negotiations result in a new deal, Nordion would obtain less of the raw material for the isotope molybdenum-99, used in medical imaging, than previously thought, the Canadian company said in a statement.

Nordion said it terminated an agreement with a subsidiary of Russia’s State Atomic Energy Corp, which was to provide an alternative to supplies from an aging Canadian reactor that is currently Nordion’s primary moly-99 source.

The Russian deal, announced in 2010, would have provided less material than Nordion currently uses, though the company never said how much the Russian supplier would deliver.

Nordion did not say why it was terminating the deal. It said it would now negotiate with the Research Institute of Atomic Reactors, which operates reactors in Dimtrovgrad, Russia. It described the institute as an entity of State Atomic Energy Corp.

Nordion is one of the world’s leading suppliers of moly-99, but all of the raw material it uses to produce the isotope comes from the aging National Research Universal reactor in Chalk River, Ontario.

The facility, operating since 1957, is one of the few reactors in the world that can supply the needed material at scale. It is licensed to stay open until 2016, but its future beyond that is unclear.

Canada closed the facility because of safety concerns in the autumn of 2007 and again from May 2009 to August 2010, causing a worldwide shortage of moly-99 and encouraging many of Nordion’s customers to look for other suppliers.

In September, Nordion suspended its dividend after an arbitration panel rejected its claim against state-owned Atomic Energy of Canada Ltd, which operates Chalk River. Nordion had aimed to compel the agency to finish building two new reactors or pay damages.

Nordion’s shares rose 2.0 percent to C$6.61 early on Monday in very light trading on the Toronto Stock Exchange. The stock has fallen more than 30 percent in the last three months.

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