OTTAWA (Reuters) - Canada said Thursday it plans to sell part of its government-owned nuclear technology business to big international companies or forge some kind of alliance with them to gain global reach.
Natural Resources Minister Lisa Raitt said she accepted the conclusions of an official review that said Atomic Energy of Canada Ltd (AECL) could not succeed in its current form.
The government will turn to big corporate players for alliances, such as taking an equity stake in the AECL’s Candu nuclear reactor division, merging with the division, or forming joint ventures on specific projects.
“We think that we can compete on a global scale but we need help getting to the globe in order to sell our reactors,” Raitt told a news conference.
The review by her department listed France’s Areva, Toshiba Corp’s Westinghouse and the U.S.-Japanese joint venture GE-Hitachi as the three vendors referred to most often.
It also named Japan’s Mitsubishi Heavy Industries and Russian state-owned Rosatom as significant industry players.
GE said the government was right to try to strengthen AECL’s competitiveness. “GE has supported Candu technology since the 1950s and we continue to see a solid future for the technology,” said company spokesman Dan Nelson.
Areva said partnerships have long been at the heart of its strategy. “We believe that this can be the beginning of a new stage in Canada’s long and successful nuclear history,” said Areva Canada President Armand Laferrere.
Raitt has engaged N.M. Rothschild & Sons to develop a restructuring plan to be presented to her in the autumn. David Leith, formerly of CIBC World Markets, will also advise the minister and work with Rothschild.
It was not decided if Canada would retain a minority or a majority stake in AECL’s reactor operations, and officials would not disclose how much such a sale might raise.
The Candu heavy-water technology represents almost 10 percent of reactor capacity around the globe, including all of Canada’s installed capacity, but 60-year-old AECL has struggled of late.
In particular it has got a black eye for problems at its Chalk River Nuclear Laboratories, which normally supplies about a third of the world’s medical isotopes, used to perform imaging tests.
It had to shut down briefly in 2007 and halted production of isotopes again in mid-May for at least three months because of a small leak of heavy water, used in the reaction process.
On a commercial basis, the shutdown is hurting Canada’s MDS Inc, which has an exclusive agreement to distribute Chalk River’s medical isotopes.
The departmental review, accepted by Raitt, recommended splitting off the research and technology division, which includes Chalk River. The government would continue to own that facility though a private company would operate it.
The government also announced Thursday the creation of an expert panel to review proposals from the private and public sectors for new sources of medical isotopes.
Opposition Liberal Member of Parliament David McGuinty said the Conservative government was trying to sell assets at a time when markets were down, but Raitt said the AECL plan was less about money from any sale than about trying to win new business during a period of nuclear resurgence.
Additional reporting by David Ljunggren in Ottawa, Scott Malone in Boston and Scott Haggett in Calgary; editing by Rob Wilson