May 19, 2009 / 1:00 PM / in 9 years

Isotope output at Canada reactor halted after leak

TORONTO (Reuters) - Canadian energy authorities have closed a nuclear reactor that produces a third of the world’s medical isotopes after a small leak and warned that there could be a shortage of isotopes by as early as Saturday.

<p>A sign is seen outside the reactor at the Atomic Energy Canada Limited (AECL) Chalk River nuclear facility during a media tour in Chalk River, Ontario, December 19, 2007. REUETRS/Chris Wattie</p>

Atomic Energy of Canada Ltd said it shut down the 50-year-old reactor at Chalk River, Ontario, late last week after it discovered a small leak of heavy water, used as part of the nuclear reaction process.

It expects the reactor to remain out of operation for more than a month.

Meantime, major isotope producing countries and companies are working co-operatively to address the issue of a possible supply shortage, the Canadian government said.

“A secure supply of medical isotopes is not only an issue for Canada, it is an international issue that is being addressed co-operatively by all isotope-producing countries,” Natural Resources Minister Lisa Raitt said.

Raitt said Ottawa was engaging international isotope producers as well as companies such as MDS Nordion, Covidien Ltd, and privately held Lantheus, which she said play key roles in securing medical isotope supply for North America.

The isotopes are used in medical research and in some cancer treatments. When injected into the body, they give off radiation that can be imaged with a camera to diagnose cancer, heart disease and other medical conditions.

Shares of MDS Inc, whose MDS Nordion division has an exclusive agreement to distribute Chalk River’s medical isotopes, were unchanged at C$6.19 after dropping to C$5.94 earlier in the session.

MDS said it expects the financial impact of the shutdown to reduce its adjusted earnings before interest, taxes, depreciation and amortization by about $4 million a month.

The shutdown marks the second time in less than two years the Chalk River reactor has been taken offline. A 2007 production halt resulted in a $9 million drop in profit at MDS.

“In our view, this event will significantly impact MDS’s third-quarter, as Nordion currently provides the majority of MDS profits,” Maher Yaghi, an analyst at Desjardins Securities in Montreal, wrote in a note to investors.

“It will be difficult to calculate the bottom line impact until the precise date of the site’s re-initiation is known,” Yaghi added.

AECL spokesman Dale Coffin said it would take most of the week to assess the situation before providing a definitive timetable for the reactor’s restart.

($1=$1.16 Canadian)

Reporting by Scott Anderson and Randall Palmer; ;editing by Rob Wilson

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