August 13, 2009 / 2:30 PM / in 8 years

Restart of Canada isotope reactor delayed to 2010

OTTAWA (Reuters) - Atomic Energy of Canada Ltd has hit more problems with an aging nuclear reactor that produces a third of the world’s medical isotope supply and now says it will not be working again until early 2010, months later than initially estimated.

The announcement -- made after markets closed on Wednesday -- prompted an angry reaction from the Canadian government, which critics say has hopelessly bungled the affair.

One leading Canadian nuclear medical expert said he feared the reactor would stay shut forever and predicted serious shortages of the isotopes, which are used in medical tests and cancer treatments.

The Chalk River National Research Universal (NRU) reactor in eastern Ontario was taken out of service in May after it was discovered to be leaking a small amount of heavy water.

Government-owned AECL initially said the reactor would be back in service in three months but has now pushed back that date twice. Last month it predicted the reactor would be operating by late this year.

Chalk River produces most of the isotopes distributed by MDS Nordion, a subsidiary of Canadian health sciences company MDS Inc.

MDS Nordion predicted major shortages and said supplies would become even tighter when a similar reactor in the Netherlands -- the only other one in the world that can make large amounts of isotopes -- is shut down for six months early next year for maintenance.

AECL said closer inspection has identified nine different sites at the reactor that need to be fixed, more than had been discovered initially. One solution might be to fix the problem with a series of welds, it said.

“The application of the band weld build-up technique, and the increased number of sites, indicates the NRU will return to service during the first quarter of 2010,” AECL said.

The federal health and natural resources ministers said they were “very disappointed” with the announcement.

“We have asked AECL to provide a firm return-to-service plan as soon as possible, and we have underscored to them that their first priority is to return the NRU reactor to service, consistent with maintaining the highest standards of safety and security,” the two ministers said in a joint statement.

Critics say Ottawa reacted far too slowly to secure alternative supplies of isotopes when it became clear the 52-year-old NRU was running into big problems.

Dr Kevin Tracey, head of the Ontario Association of Nuclear Medicine, said the repair process was incredibly complex.

“We’re not sure that this thing is ever going to get up and function reliably,” he told the Canadian Broadcasting Corp, saying he was worried by the Dutch reactor shutdown.

“Looking at a six-month potential scenario of both reactors down ... we want to prepare for the worst -- that would definitely be the worst,” he said on Thursday.

The only other reactors that could supply isotopes are smaller models in South Africa and Belgium, he added.

Shares in MDS slipped on Wall Street after the AECL announcement and by 12:45 (1645 GMT) were down 13 cents, or 2.1 pct, at $5.94. Desjardins analyst Maher Yaghi said the announcement was bad news for the company.

“We expect MDS’s stock to remain under pressure, and we continue to advise investors to be cautious on the name,” he wrote in a note to clients.

Additional reporting by Scott Anderson; editing by Peter Galloway

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